Commercial litigation pits Michigan-based Amway vs. Ebay sellers

In a recent commercial litigation case, Michigan-based direct selling company Amway is taking on several Ebay sellers who are hawking Amway products online. The commercial litigation lawsuit alleges that the unauthorized sales, purportedly perpetrated by the three defendants, not only goes against the company’s well-established distribution system, but that it also diminishes Amway’s reputation for their generous 180-day customer satisfaction guarantee.

Michigan-based Amway also claims that the husband-and-wife duo further damaged the company by altering Amway products before selling them. The company alleges the couple sold bulk products in smaller, individual batches.

According to Amway, they have received multiple complaints from consumers alleging poor quality of the items purchased from the husband-and-wife team reportedly engaging in unauthorized sales of the company’s products. Supposedly some customers weren’t even sure whether the products they bought — advertised to be from Amway — were actually authentic or not. Amway also appears to believe that these alleged unauthorized sales damage the exclusive deal between the company and its distributors due to price undercutting.

Many Michigan residents are quite familiar with Amway products. The company is based in Ada. Equally familiar to most people is the Amway distribution system wherein company products are sold to customers via the independent distributors. The lawsuit points out that this is a ‘hallmark’ for how the 53-year-old company does business, and stresses that the unauthorized sales of products online cuts out their distributors in violation of contractual agreements and devalues the company’s brand.

It will be interesting to watch how this commercial litigation case involving Amway and Ebay sellers unfolds. Especially noteworthy is the fact that Amway has not named Ebay in the suit. The company seems to be holding the individual sellers individually liable for contractual violations concerning the claims alleged against them. Yet, depending on the success of the plaintiff’s litigation case, other product manufacturers may also opt to pursue similar lawsuits against the sales of their products online without prior approval.

Source: MLive.com, ” Amway sues 3 eBay sellers for auctioning company’s products online ,” Shandra Martinez, June 21, 2012