Can a manufacture legally dictate that you can't sell their products on the Internet?

I am friends with a professional hair stylist. She purchases her products from a distributor (middleman) at their retail stores that sell only to licensed professional stylists. The manufacturers of those products say that she cannot sell their products on the Internet, for fear that they will land in discount stores etc. and dilute the value of the brand.

I say that once she buys the products from the retail store, they become her property, and she can do whatever she will with them. Sure, it’s not the greatest idea to sell them at a discount price, but the idea of getting sued by the manufacturer of a product you buy in a retail store because they don’t like what you do with your property seems very illegal to me.


First: Is there a contract between the distributor and stylist. E.g., “Stylist cannot resell these products, etc.” In which case it is a civil legal manner (and not a criminal).

Second: Is there a license agreement? (Variation of the first.) A lot of software is sold these days. MS in particular gets nasty about reselling “their” products without their approval.

If not, she can do what she likes, and the distributor can stop selling it to her too.

(The stylist should know that this all a bunch of hooey anyway. The stuff from the distributor is no better quality than what they sell at Wal-Mart. Special products like harsh straighteners aside.)

From a basic point of view, I guess she can sell to whomever she wants. But OTOH, so can the distributor. So if they don’t want her getting her hands on any more Hair Foobarnication Gel (with added carrot and turnip extract), that’s up to them too.

I know that there is nothing between the stylist and manufacturer.

AFAIK, there is nothing between the distributor and the stylist either. The process of getting an account involves presenting a license at any of the retail stores.

BTW, some stuff is crap, but some stuff is good. Your everyday shampoo (sodium laurel sulfate, or sodium laureth sulfate, or anything that sounds like the above) will wash out color quickly, and over time, lead to increased hair loss, if you are suceptible (and it’s usually watered down). If you pay $70 for your haircuts, and more for color, paying $15 for a bottle of ultra-concentrated shampoo isn’t that bad.

This is common practice for manufacturers. Because of small businesses trying to compete, the value of the manufacturer’s product can be reduced to almost nothing. Rules like these keep retailers in check, and make sure their products do not lose value.
I know of many companies that do this. They make many restrictions including limiting selling area, target customers, selling prices, etc.
I also know of several companies that wish they had done this.
I’ve seen 300 dollar products reduced to almost nothing because one company tried to make a profit by being super cheap and selling more. He never made the profit he wanted, and now noone else can ever try to charge more, because no one will pay it anymore. All retailers lose, and the manufacturer loses.

I can think of a couple factories and a couple retailers off the top of my head, but I dont want to mention names.