Can Handshake Demand Faire Terms to Merchants?

In Shopify world, I wonder what happened to Handshake, other than Faire just got too big too fast, and Shopify did not add enough value.

Is it used? It's Shopify's B2B wholesale marketplace in case you didn't know.

I found a little nugget in Handshake's terms of service that I didn't expect to see. Any product a retailer buys on Handshake cannot be resold on online marketplaces. "one of the criteria for retailers buying on Handshake is that they don't resell your products on third-party marketplaces, including Amazon, eBay, Etsy or others."

First, if you own the merchandise, can they even demand that as a venue?

Second, what do you think about that?

Stanisław Heropolitański shared some thoughts on the pros and cons of this policy: “Good - it creates fewer opportunities for a product to be discovered and copied by potential competitors. Gives brands more control over the whole distribution and experience associated with their products. Bad - at the same time, it creates fewer opportunities for potential customers to discover the brand. It also probably violates the principles of a free market economy.”

Mark D. asked some additional questions “Sounds semi controversial? Seems ridiculous to marginalize any customer who would want to do that. They have already made their money from the transaction. Is it some sort of exclusivity they are going for with this?”

Peter Javidi had a slightly more cynical take “Is it possible it's a "CYA" term that they don't enforce, but show their network that they are doing their best to warn retailers? Do terms of service with no potential enforcement work?”

Dov Altman brought Peter’s questions to their logical conclusion: “It’s probably there because brands that sell to them required it. Legally they can't stop you from selling but they can stop selling to you because of that.”