In the ever-changing world of e-commerce, navigating the world’s largest online marketplace can be confusing and prone to common mistakes even for experienced Amazon sellers.
In episode two of our YouTube video series, Common Mistakes, we discuss another frustrating problem for Amazon sellers- being unsystematic with your distribution. To avoid distribution leakage you need to have a button-up distribution and partners you can trust. We have recapped our CEO’s top 3 reasons why you should not be flagrant with the distribution.
Battle for the Buy Box and Price Erosion
When a brand experiences distribution leakage, the leaked inventory almost always appears on Amazon. There is an entire industry built on “retail arbitrage”. Sellers regularly buy merchandise from random distributors, liquidation sales, or purchases from discount retailers. These entrepreneurs can cause significant problems for brands. When there is a battle for the buy box, the product’s price often drops below MAP, which can cause a chain reaction and price erosion across other retail partners. In addition, without the buy box, your sponsored product ads are no longer served. As a result, it will slow your brand growth on Amazon.
Risk of Negative Customer Experience
When another seller sells your ASINs, there is no guarantee that the product is new or authentic. Unfortunately, the wrong, expired, and counterfeit products are often sold to unsuspecting customers. This leads to negative customer experiences and reviews, which can massively impact your brand’s sales and reputation. It is nearly impossible to get Amazon to remove negative reviews.
Inconsistent Branding and Conflicting Motives
Bad e-commerce images are a common occurrence on Amazon. When unauthorized and sometimes authorized sellers list products, they frequently copy and paste readily available images to the listing. These images are often of terrible quality, and the listings show little regard for the customer’s user experience and your company’s branding.
As the brand owner putting time and effort into building brand equity, it is frustrating that these third-party sellers can hurt your image. Amazon should be both brand awareness and a sales channel. Even when you authorize a seller to list your products on Amazon, their motives are to move the product, not build your brand. Therefore there will not be as much customer service care.
How to Reel in Bad Distribution
Now that we have discussed the problems associated with bad distribution, let’s review the steps you can take to improve…
- Pick the right partners and be exclusive
- Do not sell to liquidation partners (it almost always appears on Amazon)
- Have unique identifiers for each distributor to identify leakage
- Identify sellers with your products and track if they are replenishing their inventory
- If eligible enroll in premium or professional beauty for a cost
Stay tuned for our next episode and blog recap of Common Mistakes by Envision Horizons.
