What is partner compliance
Partner compliance means that your business partners comply with their contracts. Unfortunately, not all of them do. Find out how online brand protection can safeguard your brand.
In today’s increasingly interconnected world, partner compliance is becoming more important than ever. Yet there still isn’t enough discussion about this topic, with many brands having only a vague idea about what it actually is.
Let’s take a look at why partner compliance is gaining importance and how it affects your brand.
Strictly speaking, partner compliance means whether your business partners adhere to the terms of your contract. But it’s so much more than a simple legal formality.
In the globalised economy of the 21st century, few brands have the luxury to actually have a branch in every country their products are available in. Similarly, not many brands are able to source all their raw materials from their immediate surroundings.
Instead, most brands have to rely on business partners from other regions, in many cases even other continents to source raw materials and/or distribute products. This gives a lot of power to suppliers and especially vendors. After all, in their region, they are the face of your brand.
Which is why it’s important to have a strong legal agreement in place that describes the rights and responsibilities of your business partners.
However, the term business partner doesn’t only include the companies or sole proprietors your brand directly works with, but any business actor who has your permission to use your IP-protected assets, like patents.
This means that next to suppliers, authorized distributors and vendors, you have to consider your licensees as your business partners as well. Why? Because they are using your assets and thus have an opportunity to elevate or hurt your brand. This is why business licenses and patents are put in place to regulate the usage of your IP assets.
But what happens if your business partners decide to ignore your terms?
There are quite a few losses a non-compliant business partner can cause for your brand, starting from mild to very serious. It’s usually the significance, length and severity of the breach that determines the size of your loss.
The most obvious issue your brand can suffer due to non-compliance is the loss of revenue. Various types of behaviour can result in such a loss. For example, if a vendor decides to sell a larger volume of your products than agreed, keeping the profits of the surplus quantity for themselves.
Similarly, what if a supplier who is supposed to create a certain product part with your IP-protected mold for your brand manufactures more of that product part and sells it to other brands?
Or, a patent user you authorized to use your intellectual property for one product line may use it for other product lines as well.
All these examples, and many more lead to the loss of revenue for your brand. How much you lose depends on the volume and duration of the breach. If undetected, these behaviours can continue for many years, amounting to quite significant losses for your brand.
But money is not the only thing you stand to lose. All the above-mentioned non-compliant behaviours (and lots of others) have a further, just as unwelcome side-effect: sullying your reputation.
For example, if a supplier uses subpar material for your product parts, worsening the quality of your branded goods. Or if an authorized vendor sells your products outside of your agreed distribution channels, creating harmful grey market structures and destroying your flawless marketplace presence in the process.
But even the simplest case of non-compliance can have devastating results on your reputation. Consider this: your authorized vendors in a foreign country represent your brand to customers there.
If they don’t live up to their agreement in any way (e.g. provide inferior customer service, display your products in the wrong way, etc), the resulting fallout will harm your brand in the eyes of your customers.
And in today’s world, where carefully built reputations can be destroyed within an hour, you simply can’t afford to let your business partners represent your brand in a non-compliant way.
But how can you detect their non-compliance? Or better yet, how to make sure your business partners stay compliant?
globaleyez has the perfect answer to that. We developed our versatile partner compliance service, an integral part of our comprehensive online brand protection program, with exactly these issues in mind.
That’s easy: whatever you want it to. Like all our other services, partner compliance is incredibly flexible and we can fit all our actions to the exact needs of your brand.
First of all, we provide background checks for your current and potential business partners, helping you vet who to choose to work with. Our online brand protection experts use cutting-edge software tools and their own intuitive expertise to take a deep dive into the background of suppliers, distributors, vendors, licensees, and more.
Then, we monitor your business partners’ activities on- and offline with marketplace, social media, app, image and domain monitoring to discover suspicious activities in the process. We track their sales on various marketplaces and conduct test purchases to gather tangible proof of any non-compliant behaviour.
As for your patents and business licenses, we collect information on their users both on- and offline and check our findings against your list of authorized persons and organizations, thus discovering who is using them without your permission.
With a test purchase, we can even detect the unauthorized use of product molds, and whether your business licensee is indeed only selling the products they’re licensed to.
But those are just a few examples. Unfortunately, there are countless ways business partners can breach their agreements, which is why we developed just as many methods to find out about it. No two partner compliance cases are the same, and globaleyez’s service adjusts itself perfectly to your brand’s exact needs.
Contact us if you have concerns about your business partners’ behaviour or any other online brand protection issue.