Our business sells second hand clothes online, but Paypal keeps saying we need a licence?
gmarie
Posts: 20 Forumite
Long story short, we've had a physical vintage shop for a few years now & recently made the move to have an online presence - we were using Shopify to host our shop & Paypal to process payments. Last week we had both our Paypal & Shopify accounts 'limited' meaning we can't access either and as such we can't trade.
We've spoke to reps from both Shopify & Paypal and the issue seems to stem from the fact that we sell branded goods - everything from Adidas & Nike to Versace & Chanel. These items are all second hand & were legitimately purchased from our second hand clothing suppliers, we have invoices, VAT receipts, a registered business etc. They are genuine items as well, we have years & years of experience working with vintage & second hand clothing so we know how to authenticate items before we list them.
We've been told we need a resellers license...but what on Earth is that?! We've got our team sat desperately trying to work out what it is we need, we've spoken to friends in other businesses and they've never heard of it either! We understand you need permission to distribute new items, for example if we wanted to supply Nike in our shop we'd have to get permission from Nike, but these are all second hand, surely once you buy an item second hand it's yours to do what you want with it - otherwise eBay, Depop & Amazon wouldn't exist! If anyone has any idea where we can go from here it would be hugely appreciated.
We've invested a lot into this so for it to be shut down completely within two months is heartbreaking - we've had a photography studio built, we've spent money on ads, we re-purposed some of our staff to work with the website, we've spent money on web page themes, flyers, posters etc. Thanks!
We've spoke to reps from both Shopify & Paypal and the issue seems to stem from the fact that we sell branded goods - everything from Adidas & Nike to Versace & Chanel. These items are all second hand & were legitimately purchased from our second hand clothing suppliers, we have invoices, VAT receipts, a registered business etc. They are genuine items as well, we have years & years of experience working with vintage & second hand clothing so we know how to authenticate items before we list them.
We've been told we need a resellers license...but what on Earth is that?! We've got our team sat desperately trying to work out what it is we need, we've spoken to friends in other businesses and they've never heard of it either! We understand you need permission to distribute new items, for example if we wanted to supply Nike in our shop we'd have to get permission from Nike, but these are all second hand, surely once you buy an item second hand it's yours to do what you want with it - otherwise eBay, Depop & Amazon wouldn't exist! If anyone has any idea where we can go from here it would be hugely appreciated.
We've invested a lot into this so for it to be shut down completely within two months is heartbreaking - we've had a photography studio built, we've spent money on ads, we re-purposed some of our staff to work with the website, we've spent money on web page themes, flyers, posters etc. Thanks!
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Comments
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Most brands are very protective of their names these days , even eBay pull branded goods for the same reason.Ex forum ambassador
Long term forum member0 -
A reseller's license is usually for brand new goods.... I suspect the real issue here is the time it would take the seller platform to sort out any complaints about your goods. While your business is wholly legal etc, 1000 others might not be - and it can take many hours of staff time trying to sort out complaints and get involved in closing down accounts where illegal/fake/stolen goods are being pumped through.
In short: You're doing nothing wrong, but they don't want your business.
They provide an electronic platform and payment gateway to make it easier for people to exchange goods for money - and experience has shown them that dealing with any "small/individual traders" selling branded goods has attracted a disproportionate number of scammers and cheats.
The reseller license is something a manufacturer will normally agree with a seller that buys their new goods for resale online, not the 2nd hand market.
I think, for your own sanity, this might be one thing you will just have to "drop" as the platform's not for you.... not because you're doing anything wrong, but because 1000 other people are.
As a business, they can't afford to take £1-2/transaction from you, if it could potentially cost them £1000 of staff time in 2 months' time when there's a complaint or issue.0 -
We did think that it was because of the hassle involved for them, but there's just so many other shops selling the exact same things it seems odd that we've been singled out. We have the potential to list thousands of items & generate a lot of profit for both Shopify & Paypal so it's sad that they're simply not interested. We have a great reputation & lots of regular customers, and everything was going swimmingly until last week!
We did consider moving to other platforms and dropping PayPal but our sales massively increased when Paypal checkout was active, without it, we'd see people going to checkout then abandoning their cart. We could start our own website from scratch but that's going to be even more time & money spent, the cost of maintaining your own platform was a lot more expensive than using third parties like Shopify.
We're going to chat with Paypal & Shopify later to see if they'd be willing to let us reopen if we send them some proof we're legit. It happened once before with PayPal for the same reason and they eventually gave us our account back, so hopefully it works a second time.0 -
They mean by a "licence" getting the permission of the particular brands to sell their clothes. It is not a trading licence or some government organised licence.
I did not know that the brands worried too much about selling their clothes second hand, but it appears that they do. I suppose you make money out of their brand as say a branded T-shirt will sell more than an unbranded T-shirt of exactly the same size, colour, quality of material etc.
If you just sold the item without mentioning the brand or displaying the brand in the photo on the listing, then you might not have a problem, but then you are unlikely to get anything near the price you want for the item.0 -
Is it just Shopify being a pain?. I only ask as PayPal are just a payment platform.
If you have your own website that hosts shopify, try looking at the free alternatives. You can create a site that behaves and looks exactly like your shopify one and offer PayPal and another epayment system such as PPPay or Allpay and offer a discount for using them as an alternative.0 -
This could work for a short while but I presume that Versace, Chanel, etc are trawling the web and then asking hosts and payment providers to try to shut down sites unless they have authorised them to sell their products. I doubt that Paypal and Shopify are instigating this.Is it just Shopify being a pain?. I only ask as PayPal are just a payment platform.
If you have your own website that hosts shopify, try looking at the free alternatives. You can create a site that behaves and looks exactly like your shopify one and offer PayPal and another epayment system such as PPPay or Allpay and offer a discount for using them as an alternative.0 -
If the likes of Versace, D&G etc. tried that with me, I'd get the media involved and embarass them.
Unless they also stop charity shops selling brands 2nd hand, then they could be seen to be acting in a very bad light indeed by targeting individuals in such an aggressive manner.Never Knowingly Understood.
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3-6 month EF £0/£3600 (that's 0 days worth)0 -
Designers can't stop you selling their brands because they have no control over second hand or even brand new goods legally purchased. The designers aren't involved here.
The only control they have is when their authorised distributors (their action would be closing the distributors account) sell to unauthorised clients and when the goods are counterfeit.
None of this impacts the OP but Paypal and Shopify are running scared of the OP selling counterfeit goods and the charge backs this may cause.
It's not about a licence, it's about avoiding potential problems.0 -
Designers can't stop you selling their brands because they have no control over second hand or even brand new goods legally purchased. The designers aren't involved here.
The only control they have is when their authorised distributors (their action would be closing the distributors account) sell to unauthorised clients and when the goods are counterfeit.
None of this impacts the OP but Paypal and Shopify are running scared of the OP selling counterfeit goods and the charge backs this may cause.
It's not about a licence, it's about avoiding potential problems.
^^^^^ this0
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