Stout was engaged by counsel for the plaintiff in a breach of contract matter seeking lost profits involving an e-commerce distributor of over 100 premium retail brands through e-commerce channels such as Amazon. In addition to providing selling-related services (e.g., product listing, customer service, etc.), the plaintiff offered an extensive number of other e-commerce-related services to brands looking to expand their presence online, including marketing services (e.g., social media campaigns and search engine optimization), creative services (e.g. online storefront design and custom graphics), and distribution services (e.g., inventory and quality control), among others.
The plaintiff alleged that the defendant breached an exclusive distribution agreement by refusing to supply products to the plaintiff (except under terms that were commercially impractical and were not part of the agreement), thereby preventing the plaintiff from making the required minimum purchases. In developing our lost profits opinion, we reviewed and analyzed contemporaneous forecasts developed by the plaintiff prior to the signing of the agreement. We corroborated these forecasts by using various sales tools made available for Amazon resellers, such as sales ranking reports by Amazon Product Identification Number (“ASIN”). More specifically, we reviewed historical sales reports for the products at issue in this case (previously sold on Amazon by other Amazon resellers), which provided the “sales rank” by product. This analysis allowed us to estimate the historical unit volume being sold by other resellers (i.e., prior to the non-exclusive agreement being put in place). This analysis assisted in demonstrating the minimum purchases specified in the agreement were not only reasonable, but likely, given the historical sales volume for the same or similar products.