Brand Protection for E-Commerce: MAP Violations and Gray Market Threats

Episode #006

30 min listen

Episode #006

30 min listen
“Before posting any information online, it is important to consider the potential consequences. Ask yourself if the information will be accessible to everyone and what impact it may have on you. This is a good approach for individuals and companies alike who are concerned about safeguarding their brand.”
Adolfo Hoyos, LinkedIn

In this episode, Henry Ng is joined by Adolfo Hoyos, Head of Technology at Brand Guard, a startup that helps companies protect their intellectual property on e-commerce marketplaces, namely Amazon and Walmart, by providing software and services focused on getting rid of unauthorized and counterfeit resellers. 

They discuss the manufacturer-reseller relationship and threats that one's brand can encounter on e-commerce marketplaces. Adolfo discusses the data collection practices that Brand Guard performs in their work, as well as how they handle their own data or data produced by their clients. We will also dive into some advice on how to protect one's brand from MAP violations (i.e., a reseller advertising a product below the appointed price which was set in a MAP policy agreement between a manufacturer and its retailers).


Henry - 00:00:00 Welcome to Ethical Data, Explained. Join us as we discuss data-related obstacles and opportunities with entrepreneurs, cybersecurity specialists, lawmakers, and even hackers to get a better understanding of how to handle data ethically and legally. Here to keep you informed in this data-saturated world is your host, Henry Ng.


Henry - 00:00:21 Good afternoon, everyone, and welcome back to Ethical Data, Explained. I'm your host today, Henry Ng, as always. Today we have a special guest, not only a project manager, tech lead solutions, architect, long list of different roles under his name but currently the Head of Technology at Brand Guarde. We have Adolfo Hoyos, and he'll definitely correct me if I've messed up his name there. But welcome today, Adolfo. How are you?


Adolfo - 00:00:48 I'm really fine. Thank you for your introduction. My last name is really easy to mess up. It's pronounced Ojos. 


Henry - 00:00:56 Ojos. I think I think I've actually previously had this conversation and I've still messed up, but I apologize. So Ojos. Perfect.


Adolfo - 00:01:03 Very well enough.


Henry - 00:01:05 That's great. So, yeah. Thanks for coming on today. As always, we would love to start a little bit about you and your background. Like I said, you have a very long list of great achievements from being a teacher all the way through to being a head of tech. So it'd be great to know a little bit more about your background and your career journey.


Adolfo - 00:01:23 Uh, yeah, thank you for having me. And basically, my childhood dream was to be a university teacher. Like I was a little kid. And I saw the campus of one of the universities here in the city. And my father, described all the things. And I was kind of a history buff when I was a little kid and a science buff. So I was like, okay, I will be a teacher there. So my whole journey went like focusing on that. And when I achieved that, it was a really nice thing for me. And then I started working outside the academia, like more in project management and that. And at one point I was really burnt out because I had lots of tasks in the different things. And I just decided, okay, will I continue my childhood dream of being a professor or will I continue doing this thing that is really exciting? It's really rewarding for me at least. And yeah, I decided to just go outside academia and continue this in software development, which is what I currently do.


Henry - 00:02:43 Brilliant. So would you say that like a multitude of tasks and feeling burnt out is the reason you went from kind of the teaching and academia sector into the private sector, or were there any other like contributing factors at all that made you make the move?


Adolfo - 00:02:59 Yeah, actually, I mean, the burnout was the reason I had to make a decision. The burnout. The burnout I suffered was the reason I had to make a decision. But the reason I went to the private sector was, I don't know, it was more rewarding for me to just talk to people, like be outside selling things. Like designing systems, giving solutions, talking to people, gathering requirements. Making compromises, so that stuff was really like I thought was really like, taking advantage of like, communication skills I was building along the road. So I don't know, it was more, it felt more suited for me. 


Henry - 00:03:55 That makes sense. Kind of going from the teacher to being the builder, obviously it's kind of always going to be exciting. And obviously, one of the things you're building at the moment is Brand Guarde, and helping Brand Guarde really kind of sell. So why don't you tell us a little bit more about Brand Guarde and what you guys have in the pipeline for this year?


Adolfo - 00:04:16 Well, we continue being a startup. We are a really small company and we are a rather new one. The company was born around 2016 and it was all managed by Excel spreadsheets, basically. It was just like the guys were figuring out the process of protecting brands. And they were all over the place, like doing, they were even dealing with marketing things and with counterfeiting and all that. They were all over the place, figuring out the specific process we would be focused on. And when the process was like providing like lots, like some clients and some good feedback, that's when the guys decided, okay, we need to make this process a software. So that's when the guys contacted me and that's when I started building these systems that automate, automate lots of the things we do. And, yeah, we have been able to like... We have been able to attend to an increasing number of clients of basically the same size as the operations team, which is the idea, right?


Henry - 00:05:48 Yeah, that's what every business wants to be able to achieve. Maximizing customers without having to maximize your cost.


Henry - 00:06:12 I think one of the main things about Brand Guarde is kind of obviously being focused on what the e-commerce world is. For our listeners what would you say are some of like the basic mistakes you've seen from e-commerce sites in terms of storage and handling of data or customer data or everyone's data that access that site?


Adolfo - 00:06:33 Well, I would not point out specific companies.


Henry - 00:06:42 That's fine. 


Adolfo - 00:06:43 Because we are in the same business. So I don't know. But what we try to avoid, from what we have seen in the industry is to take data from users and like private data from users and maybe that... And what we try the most is to not make that information visible to other users in any way. That's one of the key things I police on, like basically, any user-generated data is not visible to people from other teams at all ever, even simple metrics or metadata. We avoid that at all costs. And that's I think that's a common thing nowadays for you to see like overall metrics about your customers and to give, I don't know, maybe to give a glance to other users about what other users are doing. And we avoid that at all costs. So for us, user-generated data should be visible only to them and people that specifically they give permission to it. And we are very explicit about what data is visible to other users. And we don't ever hide that behind like terms of conditions or whatever. You know, we make it very explicit in our front end. So that basically summarizes our work ethic around the data we gather from users and from user-generated data.


Henry - 00:08:39 Of course. So barring kind of hiding it and making sure that only the right people have access to it. For other companies and other e-commerce sites, do you have any kind of tips and tricks to help stop kind of malicious actors from damaging business names by taking that data? Obviously, like the idea of managing together that data in some way, shape, or form. Maybe other start-ups or maybe completely new entries into the e-commerce market. What would you suggest to them to put in place to help minimize the damage to their business when it comes to these malicious actors? 


Adolfo - 00:09:20 Actually. I guess the term malicious is sometimes subjective because what can be malicious to you can be benevolent to others. For example, we are in the business of eliminating undesired sellers from marketplaces. So maybe from their point of view, we are being malicious with their contact information because we use the public information they post in on the web websites to contact them and to say and to maybe send cease and desist letters or to call them and say, "Hey, okay, you are not an authorized seller. Please stop selling". So for us, we are protecting the brand and we are enforcing the brand's policies. But maybe from the point of view of the seller, we are malicious because we are messing up with their way of doing businesses or business. So, what I would suggest to anyone with information online and this would be anyone basically is to be very careful about what you post anywhere. And this seems to be... This is a very broad tip and maybe it's not a real tip because I'm not like providing any specific way of doing that. But basically every time you decide to post information online think about it. Think if that information would be public to anyone. What would be the consequences to you? And I think that's a good approach for people and also for companies. And so at least from our point of view, what we post online or what we post in any of our sites or even inside the app for our, let's say our private uses or within the access levels of our own users. Even even if we do that, we are always assuming that everything we do in our app could be public to anyone. So that's why we are very careful about what we post and what we upload to our own systems.


Henry - 00:11:56 Of course. Of course. So outside of that type of kind of reseller, malicious actors and other issues that always kind of arise. Things like MAP violators and gray market sellers. And if we're taking a look at MAP violators, like in some cases it's big companies like what happened between Birkenstock and Costco. What are your views on kind of map violators and gray market sellers? How big of an issue actually is? 


Adolfo - 00:12:26 In that case that depends on the brand and they having a strong MAP policy, basically. And to make sure that there aren't leaks in their supply chains basically because when brands have a strong MAP policy in place and enforce that to all of their sellers and all of their resellers, they make sure that everyone is on the same page. And that you won't have this type of problems, where your supply chain has leaks. That makes your products available to people that you are not aware of. And that's when not only MAP is violated, but maybe also your quality standards. Maybe you are providing with your authorized sellers, you are providing with some warranties. Or maybe you have a strong I repeat that because when with your authorized sellers, you can enforce strong MAP policies, but also you can give strong warranties and you have maybe an easy return of products from your clients. So when you have those supply chain leaks, you are out of control of those aspects, and not only your price is affected, but also the quality you are providing to your users. So when you have beforehand a strong MAP policy and strong reseller policy and you make all your resellers, all your distributors adhere to that, you are more likely to be in control of your MAP price everywhere.


Henry - 00:14:30 Okay. And have you obviously working in the market and working with a number of your own customers in this way, can you give any kind of suggestions and processes that you think have helped successfully overcome those violators and grey market threats in the past? Obviously, you don't need to give specific examples of companies, but like just the overall approach that you've taken to beyond what you've just mentioned there.


Adolfo - 00:14:59 This goes a little outside of my expertise because basically, we draft all that with legal teams. Basically, we try to help brands build a strong reseller policy and so, those strategies are crafted to every brand depending on their policies. And that's basically we just draft like some kind of agreement with your resellers and your distributors. So they sign and they have to adhere to it. So that very much depends on any brand. But in general, what you should make sure is as a brand is to make sure you control or you make your distributors and resellers adhere to that policy, but you have to build it first. So my suggestion would be, okay, build that first so you can bring those resellers in control.


Henry - 00:16:21 Of course. Of course. And looking at the growth in things like AI and automation, do you think and do you see those types of tools helping with the issue of map violators and gray market sellers at all?


Adolfo - 00:16:32 Actually, yes. Because, for example, we have some tools, some internal tools that scrape the internet and with some basic rules try to filter out what could be an unauthorized seller to one of our clients. So at least for us, it has been very helpful to have AI tools to scrape the Internet and filter out what information is relevant to us and what resellers should we contact, and which should we not contact.


Henry - 00:17:15 Of course. Of course. So things like MAP violators, obviously, we put them in a very negative basket. Something that we always put in, a kind of a gray area, especially being a proxy company and working with other web scraping tools. Like what is your stance on web scraping and at what point do you think it goes from competitive analysis to something a little bit shadier? And kind of what is your opinion on ever using web scrapers for that competitive analysis?


Adolfo - 00:17:47 You're asking that from the sellers' point of view to lower your prices against other competitors, right?


Henry - 00:17:54 Yeah. Yeah. From any point of view, that kind of makes sense in your world. Just the use of those web scraping tools and how that kind of affects your day-to-day work, really.


Adolfo - 00:18:07 Yeah, we strongly use scraping tools to check on our clients' products. So for us, it's vital to look for possible MAP violators or simply unauthorized sellers.


Henry - 00:18:32 Yeah, ok.


Adolfo - 00:18:33 Because not only MAP violation is the problem, but some. But just being non-authorized from the point of view of the brand is already an issue. Because that undermines the ones that are authorized, right? 


Henry - 00:18:58 Yes, of course. 


Adolfo - 00:18:58 Because you have agreements with the sellers you have authorized. So when you have ones that are not authorized, that affects like the network you have built and with your authorized sellers.


Henry - 00:19:11 Exactly. Exactly.


Adolfo - 00:19:14 So from the point of view of web scraping, I don't see an ethical issue whenever you are taking data that is public and it is not behind like a login or a specific access for a user. So for example, if I were a seller that is trying to lower their prices, maximize that decreasing price, it will be vital for me as a seller to check what is the lowest price because if not, I would not be selling anything. So from that point of view, I don't see an ethical problem if the information I'm gathering is public. 


Henry - 00:20:01 Okay. And in your opinion, how well, your opinion and your experience, the data you're gathering from web scraping, what kind of duty of care do you have in place to manage people's information responsibly when you're gathering it?


Adolfo - 00:20:21 For all of the data that is visible in our systems, we have multiple, like multiple access levels. All of our users are part of teams. We subdivide the access levels of our system into teams. So no one in one team can see any information from people from other teams. If they don't have access to that team. So that's one of the ways we responsibly manage user data because we don't give access from one team to another. And even so, inside teams, we also provide access levels so users can decide what information that they are generating are accessible through other users in their own teams. So those are multiple ways. We are always thinking about what is user-generated data. There's this kind of data we call public. That is the data we gather from the Internet. And that is sometimes visible to our users. But whatever users generate, we are very careful about that. And we say, "Okay, this is user-generated. This shouldn't be visible to anyone else".


Henry - 00:21:50 Okay. That's great. So it looks like you have robust policies in place to definitely manage not only the data you're collecting but the data you're gathering firsthand from customers as well. From the outside that's actually the core of all of the technical questions. We have three questions we ask all of our guests before we close off our podcast. The first one is who in the world of data would you most like to take out for lunch? If you can't think of someone from the world of data, who in the world of technology would you like to take for lunch? That's a tough question.


Adolfo - 00:22:30 First question. Who in the world of data? What is the world of data?


Henry - 00:22:37 Data or tech? Let's go with that. I feel like the world of data is very limited sometimes because everyone in tech technically works with data on a regular basis.


Adolfo - 00:22:47 Yeah, actually, actually, there's this person. There's an academic. Let me... I just forgot her name. She works gathering data from nano-like systems, simulated nanosystems and uses, uh, like AI to check for trends and to basically make analysis of simulations but using AI. It's kind of, it's like crazy.


Henry - 00:23:17 That sounds really interesting. Our next question is what piece of software or what application could you not live without on a daily basis?


Adolfo  - 00:23:24 Easy. Git.


Henry - 00:23:27 Yeah.


Adolfo - 00:23:27 Yeah.


Henry - 00:23:28 I did think that would be the go-to for someone who works in development.


Adolfo - 00:23:32 Yeah because Git, I mean, you could do anything with that if nothing else existed. You could manage like lots of things with it. I mean, at least if only the things that make Git function existed. You could manage everything with Git, like even communications, even writing papers, even writing a script for a podcast. Whatever. You could do anything and build anything using just Git.


Henry - 00:24:04 So it's definitely like the I feel like it's the Holy Grail for any developer or any creative is GitHub. It's just everything all-encompassed in one. I feel like a lot of listeners will agree with you on that. And then the final question we have is when have you used data to solve a real-world problem you've had? It doesn't have to be a professional problem. It could be a personal problem or even helping you decide on breakfast. When you've used data to help solve a real-world problem?


Adolfo - 00:24:31 Yeah, actually, there was this time I needed to find where the sons of the brother of my grandfather were.


Henry - 00:24:47 Yeah


Adolfo - 00:24:47 Because that brother was, like, missing.


Henry - 00:24:50 Oh, right. Okay. So what type of data gathering did you employ for that?


Adolfo - 00:24:56 Yeah, I just grade for people with the same last names and I interviewed my relatives so they "Okay. This person was called like that I think and he someone's like that". So I started gathering information and I found the people, actually. And that helped me a lot with some legal thing my family had going on. So.


Henry - 00:25:21 Yeah, fair enough. That sounds like a very good use case for data in the real world. Hoping that all got resolved. But that is literally all the time we have today for this podcast. Firstly, I want to thank you, Adolfo, for joining us. I want to thank the listeners for tuning in this week and hopefully, at some point, we'll be able to get Adolfo back and you find out Susan's surname and just to see if we can connect them for a lunch someday. But it was great to know more about Brand Guarde, great to know more about MAP violators, and your view on the e-commerce data market. And we are very excited to see what Brand Guarde has to offer for 2023. So thank you very much.


Adolfo - 00:26:01 Yeah, I'm really excited to be here. Thank you for having me and yeah, goodbye.


Henry - 00:26:06 Perfect. Thank you, everyone.


Henry - 00:26:08 Ethical data explained is brought to you by Soax, a reputable provider of premium residential and mobile proxies. The gateway to data worldwide at scale. Make sure to search for ethical data explained in Apple Podcasts, Spotify, and Google Podcasts, or anywhere else podcasts are found, and hit subscribe so you never miss an episode. On behalf of the team here at Soax, thanks for listening.

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Adolfo Hoyos

With extensive research and teaching experience in Data Structures, Electronic Instrumentation, Microprocessors, Automation and Control Systems, Adolfo now works as the Head of Technology at Brand Guarde - an industry leader in the removal of unauthorized resellers from major marketplaces such as Amazon and Wal-Mart. They help companies protect their intellectual property on eCommerce marketplaces by getting rid of rogue resellers and restoring pricing control.

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