Here’s How We Can Help

As a major Amazon 3P retailer, we recognize the importance of Amazon’s recent decision to restrict shipments on certain categories and prioritize shipments for high-demand products. The US economy and many businesses are experiencing an unprecedented impact, and we feel it is our duty to support brands experiencing the volatile nature of the retail industry, however we can. If your business is impacted, here are three ways to increase efficiencies and revenue during these tumultuous times: 

1. Consider launching or expanding your brand’s presence on the online marketplaces

There is an entirely new market of online shoppers being formed as a result of COVID-19’s influence. If your brand is new to the online marketplaces or looking to capture more of this market, our agency can help you get there, fast. 

Temporary reductions in agency retainer & commission fees

To help brands affected by COVID-19, we are temporarily reducing our agency retainer & commission fees for select companies. The agency approach is ideal for brands that are looking for a hands-on, collaborative approach to selling on Amazon, Walmart, and/or eBay. To get a customized quote, submit our form and we’ll be in touch. 

Request a quote

2. Explore software solutions to maximize efficiencies and effectiveness of Amazon ad campaigns

Most businesses are needing to focus on the day-to-day operations, and implementing an ad software can free up time for higher-level strategy work while ensuring you’re maximizing your ROAS targets and increasing revenue. 

Free Access to AdManager for 45 Days

etailz is providing free access to our self-service Amazon ad management software, etailz AdManager, for 45 days to any brand. No strings attached

Our hope is that you can focus on the day-to-day while AdManager automates your marketing and keeps the revenue coming (Currently only available for Seller Central).

To get free access for your brand, complete this form, and we’ll call you within 2 business days to begin the onboarding process.  

Get free access

3. Leveragsoftware solutions to put more cash in hand

Regardless of if brands are impacted by Amazon’s temporary inbound suspension, leveraging Amazon case management automation tech that recoups dollars from Amazon can have a significant impact on brands’ bottom line during these uncertain and potential volatile times. 

Free FBA Cost Recovery Software

With the coronavirus threatening financial stability, every dollar counts. If you use Amazon’s fulfillment centers, then Amazon likely owes you money for mishandled inventory, overcharged fees, or incorrect reimbursements. We can help you recoup those funds. 

We’re temporarily reducing our commission rate to 20% on our free FBA Cost Recovery software, Channel Auditor, so your brand gets even more money back from reimbursement cases.  

You can see how much Channel Auditor could return to you before you decide to use it. To do so, just complete this form.

Get recovery estimate 

4. Implement alternative shipping methods (DTC)

For brands running out of stock and unable to ship new products into Amazon, this can ensure consumers are still able to purchase your products on Amazon. One way is to consider partnering with a 3P who can accommodate 3PL shipping outside of FBA.  

Partner With etailz to Diversify Shipping Solutions

We have spent years building up an extensive network of third-party logistics (3PL) partners and can help you continue to ship directly to your customers during these times, despite Amazon’s recent restrictions. 

Talk to an ecommerce expert 

Additional Resources

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These are strange and distressing times, but they’ll be better if we help each other. Please let us know if we can assist your brand if any way as we navigate the coming months. 

Thanks and be well,  

The etailz team 

You spend a lot of time creating your brand. After all, your brand tells your company story. Through your logo, website, social media and advertising strategies, you craft the vision for customers and provide added value to your products. A significant component of your branding is product pricing. Your MSRP conveys product value to customers. A high price can indicate quality, exclusivity, and craftsmanship. A low price may indicate a bargain and accessibility. Whatever factors go into determining product price, you expect that price to be honored by retailers.

Often, traditional brick and mortar retailers do honor your pricing. But online, it’s a different story. Many product manufacturers discover that their products are being significantly underpriced on marketplaces like Amazon and eBay. This poses a threat to traditional retailers, whose customers are checking out the product in the store but making the purchase online, a practice called showrooming.

Additionally and perhaps more importantly, the under-pricing of your products online can lead to customers devaluing your products. If the MSRP is $50 but on Amazon, the product is $35, why would the customer pay more? Soon, the customer starts to believe that the product is worth $35, and not the MSRP value assigned.

The product price, which once demonstrated product worth, now devalues your brand.

How does this happen? Usually, this occurs when unauthorized or “rogue” sellers obtain your product, often from distributors. The Amazon marketplace is competitive. To gain sales, sellers will often start a “race to the bottom” with price. One seller drops and the rest soon follow.

To understand why a seller would lower price and decrease their margin, check out our next blog post Demystifying the Buy Box.

 

So, how can a brand protect itself from the race to the bottom?

Many brands have implemented a Minimum Advertised Pricing (MAP) policy. This policy requests that retailers do not advertise prices lower than a designated threshold. A MAP policy is not price fixing. It still allows for retailers to offer coupons and specials for products that are in the cart. The major benefit of MAP pricing is that the product value and brand identify are maintained.

However, simply having a MAP policy doesn’t protect your brand if sellers don’t honor it.

It’s important to ensure that sellers are abiding by your policy, even when you aren’t looking. MAP monitoring software can help brands monitor pricing and identify MAP violators. This kind of price monitoring tool can provide insight into sellers, both authorized and unauthorized, and help to influence your competitive pricing strategy. Perispect is a minimum advertised price monitoring tool that provides these insights through an easy-to-use interface and email alerts. Perispect empowers manufacturers to take control of their brands’ online presence by identifying which sellers are selling your product and alerting you when your price policy has been violated.

Learn more about how Perispect can help you control your brand here.

 

So, how does a seller snag a sale? They try to get in the buy box. The buy box is the coveted real estate of the product listing that shows which seller is benefiting when a customer clicks “Add to Cart.”

Many Amazon customers are unaware that there are usually multiple sellers for products. When they decide to purchase a product, they click the yellow “Add to Cart” button, instead of viewing all purchasing options. The seller in the buy box gets the most sales.

So, how does a seller get in the buy box?

Each seller gets in the buy box a certain percentage of the time. Amazon has a proprietary formula that determines this based on these factors:

  1. Number of Sellers – The buy box formula is like a pie where each seller gets a portion. The more sellers that there are, the smaller piece of the pie each seller gets. But all sellers are not equal.
  2. Amazon Retail – Amazon is a marketplace, which means that there are many sellers. Amazon Retail is Amazon’s own seller. When Amazon Retail is in the listing, they always get priority and will dominate the buy box.
  3. FBA vs. Drop ship – Many sellers fulfill their product sales using Amazon’s warehouses and distribution system. This is referred to as Fulfilled by Amazon (FBA). Sellers use this service to provide the Prime 2-day shipping that many Amazon shoppers expect, and in turn, pay Amazon a fee. Sellers who ship their products directly to the consumer themselves are referred to as drop ship sellers. Since Amazon benefits from FBA, those sellers receive priority over drop ship sellers in the buy box.
  4. Product Price – Amazon prides itself on offering the lowest prices to customers. So, the seller offering the lowest product price will earn more of the buy box. This is the strategy for most sellers. 

 

Sellers attempt to earn more of the buy box by having lower prices than their competitors. This price dropping significantly harms brand perception by lowering the perceived product value, in addition to hurting traditional brick and mortar retailers who are honoring the product MSRP.

Next time, we will discuss how enforcing a Minimum Advertised Pricing (MAP) policy can level the playing field for your authorized sellers.

One of the most frustrating things for a brand is to find their product listed on Amazon or eBay by an unknown seller. Sometimes, this is a result of distributors selling to shady third-party resellers. Other times, it could be an authorized brick-and-mortar retailer who is just trying to stay competitive. But more and more often, brands are finding that the rogue seller is not a company with high inventory levels but an elusive individual, unloading a few units with no long-term plans to stay in the listing.

This individual in engaging in retail arbitrage, a practice where someone buys a product at a discounted price and sells it for a profit. To buy low and sell high is the goal. Increasingly popular and profitable, there are many blogs giving instructions and encouragement to those interested in making some money on the side. Those that are dedicated can even turn retail arbitrage into a lucrative, full-time career. We refer to this seller as Joe in his basement, a nickname that sounds friendly but can be very damaging to your brand.

How could retail arbitrage negatively impact your brand? Here are 3 ways:

1.      Pricing

2.      Damage to authorized sellers

3.      Listing content

Joe in his basement wants to make a profit, so he won’t want to price lower than he paid for the product. But if he bought the product at a steep enough discount, he still might be able to sell at a lower price than your authorized sellers. This devalues your product and makes other sellers less competitive. When authorized sellers don’t make sales, they place fewer purchase orders. Finally, Joe might think that he has some better ideas for your listing content and make changes. The changes could be minor or they could be seller-specific, for example a bullet point that reads “Buy from discountstoredave for the lowest prices on the internet” or perhaps they change the listing brand name to reflect their seller name. While these examples are against Amazon policy, they still happen.

But here’s some good news: you can take action to reduce retail arbitrage for your products.

The most important step you can take is to limit your sales to a small handful of trusted retailers. These retailers will agree to your partnerships terms and respect your pricing because it’s in their best interest – we recommend a MAP policy. Once you have limited the number of authorized sellers, you can monitor your listings to see who is selling your products and how much inventory they have by using monitoring software, like Perispect.

Another option is to allow buy backs from retailers who are having difficulty moving your product. This could prevent your products from being sold at clearance level prices. If products aren’t available at low prices, Joe in his basement will be out of luck.

 

The numbers are in: a 2016 Pew Research Center study confirmed that almost 80% of Americans shop online, with 43% shopping online “weekly” or at least “a few times a month.” More and more Americans are making purchases in the convenience of their own homes.

While this presents challenges to brick-and-mortar stores, it also provides incredible opportunity for manufacturers willing to venture into the world of online marketplaces. Marketplaces operate as their name suggests: they allow multiple sellers to sell products on one website. Three of the top marketplaces are Amazon, eBay and Google Shopping.

Amazon – The most popular marketplace with the largest product selection and the most sellers. Customers love Amazon Prime’s 2 day free shipping and the helpful product reviews.

Google Shopping – The search engine turned verb has turned its sights to capturing sales. Google’s algorithms identify product matches with search results and place shoppable links above the search results, making it that much easier for consumers to make a purchase.

eBay – Known for its vintage treasures, eBay is trying to reinvent itself as a marketplace for old and new. Curated collections give the marketplace a high-class vibe while daily deals still appeal to bargain hunters.

Selling on marketplaces expands brand’s product reach significantly and provides additional branding opportunities. Realistically, most products are already on Amazon, even if not listed by the brand owner or manufacturer.

For retailers who want to sell on marketplaces but don’t want to deal with the complexities and challenges of navigating marketplaces, a successful strategy can be to limit sales to a small number of authorized resellers. Ideally, these resellers should be experts on the marketplaces, bringing additional value to the brand. When unauthorized sellers get hold of product, they often engage in price wars as a method to gain sales, which can really damage brand perception. That’s why the best practice is to monitor producing pricing across all marketplaces. Sound time-consuming? We have a tool to help manage price monitoring. Perispect monitors Amazon (US, UK, DE, FR, JP), eBay, Google Shopping and Yahoo Shopping so you don’t have to.

Capitalize on the omni-channel approach by developing an e-commerce strategy for entering online marketplaces, selecting trusted marketplace resellers and monitoring pricing and sellers.

 

Even with a vibrant U.S. ecommerce market, brands would benefit from looking at expanding their product reach into international marketplaces. Ecommerce worldwide is growing at a rate of 20% year over year, and 2017 projects to be the first year where it reaches 10% of total retail sales. Amazon’s focus on global marketplace expansion has made it relatively easy for retailers to enter these growing markets:

United Kingdom

  • Possibly the most sophisticated customers in the world
  • $99B in e-commerce in 2015
  • Marketplace ecommerce accounts for 33% of ecommerce
  • Amazon UK sales – 10% of UK ecommmerce

Germany

  • 5th largest ecommerce country in the world
  • $67B in ecommerce in 2015
  • Amazon.de – 20% of ecommerce revenue
  • Popular shopping destination for other EU countries

Canada

  • $27B in ecommerce sales in 2015
  • Ecommerce growing at 17%
  • FBA launch in 2013
  • Amazon.ca recently passed amazon.com in visits by Canadian consumers
  • Focused on product selection

Pan EU

  • Furthering Amazon’s “Global Marketplace”
  • UK, Germany, France, Italy & Spain
  • No additional cost – to you or the customer
  • ASIN eligibility and enrollment

So why should brands expand internationally sooner rather than later? The answer is simple: saturation. Most of these marketplaces have significantly lower product offerings, so the products that are featured have a better chance of being discovered. For example, search “baby sunscreen” on:

Amazon US – 15k+ results (2.3k Prime Eligible)

Amazon UK – 3.4k results (629 Prime Eligible)

Amazon CA – 3.4k results (40 Prime Eligible)

You have a much higher chance of your product being discovered when there are fewer products competing. These marketplaces also tend to have lower marketing costs for Amazon services, like cost per click (CPC) campaigns, also known as sponsored products.

Though there is a lot of opportunity, there are a few challenges to brands expanding into the global marketplace. Products that are sold in countries where English is not the main language should be listed in the native language for a positive customer experience. Not having an established physical presence in a country makes it impossible to facilitate returns or product exchanges. It can also be hard to estimate product demand when customers aren’t familiar with a product – marketing can help with this! And there are logistical and compliance demands that brands will need to meet. To overcome these obstacles, brands could have a dedicated team for international marketplace expansion, or they could work with an experienced third party seller who knows how to successfully navigate these channels.