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Private labels confusion continues

Online players are struggling to deal with the issue of private labels.
They are barred from having exclusive arrangements with suppliers or seller entities. They also cannot influence the pricing of company-owned brands.

Given these, selling private labels looks like a violation of the law.

These companies are now said to be considering licensing their private labels to other sellers so that they can sell their products under the brand on certain conditions. But this too will need final clarity.

Private labels contribute about ten per cent of the total sales for Amazon and Flipkart. And it is one of their fastest growing businesses. They are complaining of discrimination since brick-and-mortar sellers are allowed to sell their own brands.

Companies have to comply with all rules by the end of January. Companies believe this is far too short a period. Not only would they have to restructure several entities, but massive amounts of work need to be done across several states.

Both Amazon and Flipkart had planned to make private labels a significant part of their business, and had created a number of these labels for different product categories.

The policy does not impose any restriction on the nature of products which can be sold on the marketplace.

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