Yakima told its authorized dealers last week that it was working with an international distributor to cut off sales to Costco Wholesale Corp. after learning the warehouse club was selling two of its SKUs at some U.S. retail locations.


 

“Costco is not an authorized Yakima dealer, and the company sourced our products through an international distributor,” said Yakima Senior Director of Sales Jason McGibbon in a statement released to trade publications serving the specialty bike, snow and outdoor markets. “Yakima has made significant gains into global markets with our brand portfolio in recent years, and with this growth come more opportunities for unscrupulous purchasing activities. We have identified Costco’s unauthorized distribution source and we are now taking all actions within our means to cease any further sales of these products.”

 

 

“As a member of the outdoor industry community, Yakima is fully committed to our partnership with authorized dealers, and to working diligently toward cleaning up marketplace distribution, managing MAP pricing and eliminating opportunistic gray market sellers,” McGibbon continued.

 

 

Several high-end cosmetic and sporting goods brands have sued Costco over the years, alleging its sourcing tactics infringed on their trademark rights, but courts have generally upheld the first sale doctrine, which holds that manufacturers cannot control the resale of trademarked product beyond the first sale. Yakima and many other sporting goods companies have implemented or beefed up enforcement of Minimum Advertised Price (MAP) and other aspects of their dealer agreements to ensure authorized dealers focus promotions on product innovation, brand-building and high levels of service, rather than discounting. Such policies, however, have no influence over unauthorized dealers like Costco.