Manufacturers utilize minimum advertised value (MAP) approaches to set the standard lowest publicly available pricing where retailers can advertise their items.

MAP policies are frequently essential for organizations, as customers by and large search for the most cost-effective estimated merchandise, including e-retail deals. Furthermore, numerous web-based business sites show items from least-to-most elevated cost.  That is, you can do a search that will show the lowest to highest priced retailers online.

Obviously, MAP strategies are not adhered to by unapproved retailers.  Truth be told, an ongoing report uncovered 53% of unapproved retailers disregard MAP strategies altogether. This is as opposed to 15% of approved retailers.

Ayelet Israeli- Harvard Business School colleague teacher of business organization- and Eric Anderson and Anne Coughlan, educators from the Kellogg School of Management, likewise noticed that approved retailers are less inclined to disregard MAP arrangements as they have the most advantage in conforming to manufacturers’ pricing policies.

Enforcement- What to Do!

In instances where a MAP policy violation exists there should be a policy framework for punishing or rebuffing their approved retailers, as well as controlling supply so that excess supply isn’t disposed of via “clearance” sales, etc. and end up in uncontrolled channels.

For instance, a brand may initially provide a MAP violator with a notice – but a stern cautioning that continued violations may jeopardize the relationship going forward.  Start with small penalties, and increase seriousness with repeated or continued breaches of MAP pricing.  This can be summarized as follows:

  • 1st: Written warning with immediate corrective action required.
  • 2nd: Manufacturers may suspend approved retailers for 60 days on their second infringement, for instance.
  • 3rd: Third infringement could bring about six-month or one year suspension.
  • 4th: After a fourth infringement, the manufacturers ought to revoke the accreditation of errant retailers.

It is important that manufacturers endeavor to make an impediment impact and remove the wrongdoers totally if necessary. Else, they will battle to stop the approved wholesalers and, thus, lose control of their pricing and brands.

Obviously, unapproved retailers have a higher penchant for violating MAP arrangements and their pricing infringement puts weight on approved retailers to contend on cost. At the end of the day, they represent a more noteworthy danger to organizations.

Hence, while it is imperative to make a move against approved retailers, it is apparently more basic to address unapproved retailers.

Here is an area where we can assist, as there are definite methods up to and including legal recourse to gain back control of your brand.  Jim’s Whims can assist you in this.

 

We Can Help!

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with Amazon.

Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims

Does your company sell to retailers? Are your company’s products also for sale on Amazon – often at prices that are below the MAP? If you’re a brand selling to retailers and struggling to enforce MAP pricing on Amazon, then you should be aware of two major issues:
• When your products are available on Amazon below MAP, your retailers tend to get worried
• Controlling MAP is a huge challenge on Amazon

 

The Ultimate Challenge of Managing MAP on Amazon

If your brand is depending on MAP pricing on Amazon then it will be a big challenge for you to deal with.
If you don’t actively manage it, you are essentially surrendering control of your product(s) on Amazon – which over the long term, will negatively impact both your relationships with your retail partners, as well as your brand equity overall.
While there is no ‘silver bullet’ for MAP management, there are definitely a number of steps you can take to keep control of your product listings on Amazon.

Managing MAP Pricing in Onine Channels

First, is to sign an exclusive/semi-exclusive agreement with a third party seller and then work with them and Amazon, to systematically remove all of the other 3rd party sellers on a given product listing that are not authorized to sell on the platform. This will reduce the price erosion that has been affecting you up until now.
Once you have decided to work with a single 3rd party seller, ensure any distributor selling your products know that in order for any retailer to get an approved wholesale account, these retailers must have a verified physical location, and they aren’t going to sell the product on Amazon. That is, update seller contracts to exclude online channels altogether.
Next will be to contact each of the other sellers on your product’s listing to discover where product was procured if not an authorized seller. As part of this process, you should also inform them they are in violation of your MAP policy and aren’t authorized to sell your products on Amazon. If they don’t agree to remove their listing, you should check how much inventory they have, and then if necessary, have your attorney send out notice of possible legal implications.
On Amazon.com, one method to check the quantity of inventory they have to try to add 999 items to cart and Amazon will tell you how many they have left in the warehouse. If they have sufficient quantity to justify the effort, then have your attorney send the letter. In addition to notifying the seller, you should also inform Amazon that you owe an exclusive agreement with just one seller, have a MAP policy, and that this seller is in violation of both.

 

How to Keep Control of Your Amazon Presence

The easiest way to keep control of your product’s presence on Amazon is to work with only one seller in an exclusive relationship. That way, you will have more control over things like:
• MAP Enforcement
• Promotions
• Inventory Levels
• Customer Service Levels
• Sponsored Products (PPC advertising)
• Product Listing Quality

 

We Can Help!

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with Amazon.
Additionally, we can bring value to our brand partners by improving Amazon listing optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims

The unauthorized sale of products on third-party websites such as Amazon, Jet and eBay is significantly impacting many businesses and shifting the economics of supply and demand.  More importantly, as a brand owner, it is causing you to have daily phone calls with your B&M partners, and you’d like a break from it.

Here’s a three-step program to address unauthorized sellers with more details provided below.

First, a company should revise its policies, procedures, and agreements to

  1. support legal claims against third-party unauthorized sellers, and
  2. differentiate its products from those sold by unauthorized sellers.

Second, a company should implement a tiered enforcement system. The purpose of this system is to eliminate authorized sellers through the integration of monitoring technology, investigation, and enforcement tactics in violation of policies set forth by the brand.

Third, we recommend implementing a communications strategy that:

  1. demonstrates to authorized distributors that the company is protecting them (providing measurable results from the enforcement system), and
  2. demonstrates that products sold by unauthorized sellers are unreliable and often do not come with certain services and benefits, or do not have the quality controls that the company has established.

 

 

Some More Steps to get back Control:

 Is there a formal process of vetting your sellers?

We were up front in our approach that Amazon is one of our primary platforms. Have your other sellers done the same? The reason for asking is that usually, we find brands have many sellers selling below MAP under a different name than originally purchased. Amazon may be one of your customers- but are they too currently violating your MAP price?  Usually, Amazon will not violate MAP first.  That is, until another seller does, they will do so without hesitation. Our response has been to adhere to pricing while reaching out to you for assistance to see how we can help you as well. You can gauge your other authorized sellers accordingly and decide if they are partners wishing to be brand your brand ambassadors, or if they are acting in their sole interests.

Is the actual MAP schema enforced?

If you have a list of approved sellers, we can assist you by providing you the sellers thereby giving you better visibility and enabling you to control by enforcement. Many vendors have had to adopt a hardline approach to this such as one warning and if not immediately corrected, they are then banned from purchasing again with no opportunity to return stock. The challenge here from a sales perspective is that you and the team you are responsible for are ranked on sales volume- you may not want to lose that customer. This, in turn, must be weighed by the potential loss of OTHER customers NOT purchasing as a result, as well as brand perception. Do you really want to have your brand become the low-cost leader in the sphere? No way!

Alternatively, there are some specific things your legal department can do here.

 A suggested Monthly approach is this:

Try the following initially:

  • Use us to obtain a list of MAP violators’ seller names, product, quantities on hand and price being sold.
  • Have your legal department send each an electronic contact C&D (Cease and Desist) as per the agreement, etc. This is easy and cheap via the Contact Seller link on Amazon listing.
  • Purchase products from those vendors who did not remove after the electronic C&D received. This will, in turn, assist in finding real identify (or using Brand Registry).
  • For those sellers who do not comply- Have Legal send physical Cease and Desist letter via registered mail to start the foundation for further enforcement.
  • Once again, obtain a report from us, showing results of efforts, etc. by creating the report.
  • If you don’t want to use your Legal department due to inexperience or workload, a suggested partner that specializes in this can be found at here.

What repurchase agreements do you have with existing B&M locations to control supply?

Usually, if a brand has an abundance of non-authorized sellers, it is a result of over-supply in the typical marketplace with existing sellers deeply discounting product to make shelf space available for other products. These discounted products are then snapped up by online sellers in a practice known as retail or online arbitrage- yes, benefiting from those price inequalities just like Warren Buffet does for undervalued stocks. A suggestion here is to look at your existing customers and look for abnormalities which may indicate a secondary channel of distribution not authorized. Do you see a spike in orders from customers’ average order volume, etc.? This will give you clues where you may have supply chain leaks that end up on Amazon, and elsewhere.

Have you registered with Amazon’s Brand Registry 2.0?

This will provide you with great control over the listing as well as sellers ON the listing. If not, we can help with this as well.

We hope these suggestions provide a solid path for you to take back control of your brand and control the way it is portrayed and those who sell it.

If you’d like additional assistance, we’d love to grow our relationship and would eagerly seek to do so. We will not over commit, as we are realists.

Using Amazon as an example, who is on track to become a trillion-dollar company, they and many other sellers, have infinitely deeper pockets than us. As such, we would not expect an exclusive relationship to distribute your products via the Amazon channel.

We would hope that by increasing our value to you while reducing the number of predatory sellers faced, your sales to us would increase and our partnership would deepen.

Thanks for taking the time to read this, and we hope there are some actionable insights herein.

We can Help

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with eBay.
Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims

 

 

Banding together with an experienced third-party seller on Amazon ought to have boundless upside for reinforcing your brand’s image, visibility, and product listing.  However, as a result of increased competition, how can a brand truly evaluate the ability of a seller to add benefits if a relationship is established?  There is definitely a need to as 51% of Amazon sales come from merchants OTHER than Amazon according to a Buzz channel News article.

With sales figures as staggering as that, obviously, 3P merchants are a capable power in the eComm space and should be engaged to help boost your brand’s sales in the most efficient manner possible- with least amount of engagement from you.

So, what to look for in a brand partner?  Here’s some key differentiators between a partner vs a buyer only.

 

Keyword and Feature Rich Product Listing Presenting Goods in Most Favorable Light

Put plainly, a great listing will generate sales.  It does not happen overnight, and there are additional considerations such as reviews, etc.  Experienced brand partners actively improve listings to maximize sales.

This benefits the brand, as marketing is a constantly evolving sequence.  Experience allows us to understand that a decent listing is part workmanship and part science and will work to boost each area of description and bullets/features to turn browsers into purchasers.  One perception of a listing is that it is finite real estate.  Like real estate, you as the brand owner want to put to best use the limited space you must maximize benefit- in this case sales, etc.

Key differentiators that will set your product listing apart from competition that your brand partner will do for you:

  • Keyword research and insertion in title and throughout listings to Increase Visibility
  • Detailed Bullet Points
  • Effective Photos with Selling Points that are not only photogenic, but utilization centered to allow customer to see themselves using the item

 

Traffic Boosting Through Keyword Research

Using relevant keywords will help to drive traffic to you listing.  However, it must be desired traffic in that relevant keywords should be used.  You would not want to drive traffic from customers that will not purchase.  For that matter, the key differentiator between Amazon searches and Google searches is this- Amazon targets BUYERS rather than RESEARCH and RELEVANCE.  This is huge, in that your brand may have an audience heretofore unknown, but keyword research will enable that niche to be found.

Interestingly, this will also benefit your off-Amazon sales, and in turn could become an advantage for you to to stress to your B&M locations when they call with questions.  Why?  Research indicates that approximately 50% of item research begins on Amazon.com.  This is your opportunity to engage potential customers.  These in turn may or may not purchase from Amazon but may choose to go to store local to them to touch feel and buy today there.  It started on Amazon but ended in the local store.

Many sellers do not understand the listing instead simply choosing to piggyback on the existing listing and not improve upon it as they add no value.  If this is the case, then potential buyers on Amazon are then almost by chance “stumbling over” something.  Which would you rather have as a marketing tool- defined action or random chance?  It is imperative to have the correct keywords associated with the product you are marketing.

Numerous sellers attempt to update keywords based on thought or subjective measures, but instead pick the wrong words to use in the title and body of the listing, leaving a ton of cash on the table. Experienced sellers know precisely which keywords to emphasize in a listing and furthermore have tools to measure listings ascend in the rankings while others crash and burn.

An expert 3P Seller will do this on your behalf; though as there is a huge time investment involved, it may be conditional upon reduced sellers for a given channel.

 

Make Product Listings Using Photos

Each Amazon listing allows up to 8 photograhs.  Many sellers utilize these photograph possibilities only to show the item, rather than show the product in the best possible light as well as turning the photo itself into additional ad copy.  This is a major misstep. Make your photographs work twofold in time by transforming them into standalone sales presentations.

Use imagery to emphasize your item’s extraordinary highlights and to enhance factors, for example, visualize measurements, specialized capacities and other purposes of the item can go far to teach your prospective customer and incite purchases.  Good 3P Sellers will have the specialized capacity to overlay photographs with content and will likewise know which bits of detail to show on the offer sheets.

 

Using Bullet Points for Selling Products

Advanced 3P Sellers know how to take full advantage of the space Amazon provides in their listings. This is something most sellers neglect to do while making their listings and their visual cues are only a couple of words long. They likewise tend to list the wrong keywords or feature highlights in this space.

One approach to think about this is to list highlights of your item yet go further and explain to potential purchasers why these highlights matter to them and what potential issues your item could solve for them.

Generating Product Reviews

Having an extensive number of positive reviews for your product raises it’s search rankings as Amazon wants to provide a good customer experience.  Likewise, those same products with poor reviews will be ranked lower.  As such, the higher the positive reviews relative to poor reviews, the greater chances of converting browsers to sales. In this way, it is critical that the 3P Seller you work with has a past filled with requesting item reviews.

By and large, just 2% to 5% of purchasers will leave a review of an item they purchased on Amazon though in reality those reviews have an outsized impact on how customers choose purchases. A 2013 study by Nielsen demonstrated that four out of five Yelp clients said they read client criticism before purchasing something.  Think of that- 80% of the buying decision arises from only 5% of the purchaser’s opinion.  It makes sense to manage that perception and get those with a poor experience to feel you as the brand have done everything to alleviate the problem.

Expert 3P Sellers will likewise react to negative reviews in a manner that is consistent with your, the brand’s owner, expectations.  We are your advocate.

Neglecting to react to negative reviews is a trap numerous merchants fall into, however prepared 3P Sellers realize a prepared and anticipated reaction goes far in eliminating negative perceptions.

Policy for Violators

A viable 3P Seller ought to exclusively be brand-centric in their focus, and act as a guard dog for your sake to ensure there aren’t any terrible sellers on Amazon disregarding your Minimum Advertised Pricing (MAP).

Neglecting to stop vendors who are offering your item underneath MAP could have an entire host of negative impacts. A decent 3P Seller ought to carefully be scanning the online channels for vendors undermining your value, know how to report them and have the legitimate capacity to prevent them from proceeding to offer that item.

Proficient 3P Sellers will likewise react to negative reviews in a convenient and faithful form that will indicate potential purchasers that you consider client benefit important and are committed to settling any issues that may emerge with a request.

Neglecting to react to negative reviews is a trap that numerous merchants fall into, however prepared 3P Sellers realize that an all around created reaction goes far.

 

Drive Sales by Pay-Per-Click Advertising

Previously, listing optimization was discussed with respect to keywords and terms used in the listing.  However, there is still more research and traffic to be driven by Pay Per Click (PPC) advertising.

The initial seeding of words found using tools is what is used to improve your listing in the listing itself and in the “backend” of the listing for additional keywords not visible, but relevant.  PPC advertising is driving traffic to a given listing utilizing a bidding system on Amazon’s site for keywords.  These keywords use different methods to be found- broad, phrase and exact matches all with different bid amounts which can become quite expsnsive if not managed correctly.

A good brand partner will utilize PPC on your brand’s behalf.  Does yours?  We do.

 

We can Help

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with Amazon.

Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221.

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims

The 3P marketplace made Amazon the giant in retail, which resulted to Walmart acquiring Jet.Com and eBay following close at Amazon’s heels to share in its market success.

Consumers are actively using Amazon and other marketplaces to find their desired products, and sellers will continue to find ways to meet that demand.

But making your presence felt in the marketplace requires strategy and not just leaving it all to chance – a free-for-all arena.

Greater chances of losing in a free-for-all market

If brands can’t take an active role in managing their value on 3P marketplaces, the unavoidable outcome is that sellers will aggressively compete for the largest share of the buy boxes.

Sellers will “race to the bottom” on prices to secure a deal, which creates a negative impact on the brand’s equity in the long run.

To avoid this, there are brands taking aggressive action to regain control by setting up their own 3P seller accounts, or working with a 3P seller partners who will manage their product lisitngs on the different channel’s platforms while adhering to MAP policies and ensuring products are kept in stock.

Let’s examine the key issues, risks, and trade-offs of managing 3rd party sales internally versus selling through a dedicated 3P marketplace specialist.

How to Manage Multiple Marketplaces

Walmart, Jet, and eBay are all gunning for Amazon and hope to increase their market share. As a result of Walmart’s recent acquisition of Jet, it will continue to capture a share of the growing eCommerce pie. eBay – originally an auction site – now sells over 80% of its items in a non-auction format using their 150 million active buyers to gain market share.

The presence of these new market players complicates things for 3rd party sellers, simply because each market is different and requires a special approach to achieve maximum performance.

3P sellers need to focus on the following to succeed in the market:

  • Invest in quality software that will allow them to manage product feeds, fulfill orders, handle returns, and inventory sync.
  • Attend conferences for each of these marketplaces to stay updated on the latest developments
  • Hire dedicated staff to understand and study the changes on each marketplace

 

Brands that handle 3P sales should expect to invest in software and staff to manage multiple marketplaces. If they choose to sell via a dedicated 3P specialist, these expenses will be paid by the 3P marketplace specialist.

Therefore, brands get a significant advantage to sell via a 3P specialist because they don’t need to invest, manage, and maintain the software and staff.

 

How to manage multiple marketplaces

Pricing Control

Brand owners often receive complaints from 3P sellers about vendors racing to clinch a sale by dropping prices.

When prices drop, market value is impacted, and bricks and mortar retail partners get to suffer the brunt.

Regulating and upholding MAP arrangements is critical for brands.  Brand owners need to find ways and means to take legal action on unapproved vendors from selling their items, while at the same time lessening the number of merchants to only a couple – or in a perfect world- only one expert 3P authority.

On one hand, when brands are sold distributors, control over inventory or estimates can be quite a challenge, and on the other, when there’s no movement, without distributors there are less chances of losing control.

 

The advantages of selling with a 3P Specialist

 

How to Monitor Unauthorized Seller

If a brand’s items are sold through distributors, their items will inevitably fall under the control of 3P merchants who don’t have any association with the brand and could care less about any existing MAP strategies.

Rather, these vendors either work on a plan of action that rely on large volumes with slim margins, or a small one-man business out of a garage for minimal overhead to factor into their cost estimates.

Regularly checking for unapproved sellers can be daunting and tiresome, for which brand owners handling 3P sellers need to invest in resources dedicated to monitoring the market for unapproved vendors.

How to Manage Product Reviews

Managing product reviews and making it a prominent part of your eCommerce strategy can in fact be beneficial. Reviews engage more customers and further demonstrate confidence in the brand.

An integrated product review system can also have positive SEO implications. With schema markup product reviews can be displayed on search engine results pages, increasing click-through and helping products stand out in organic searches. Links to product reviews also strengthen your site’s overall and “review”-related SEO.

For brands that sell and build one that customers can trust, embracing product reviews will ultimately work to your advantage. Managing negative feedback tells customers that you stand by your brand and products. Reviews are becoming more important than ever to driving conversions, and by simply including them on your store, it increases your credibility and leads to more purchases.

 

How to Manage Customer Service

Overseeing client benefit is vital to safeguarding brand value.

Effectively managing customer service is vital to preserving brand equity.

Failure to consistently respond timely to inquiries can result in a decreasing share of the buy box, or suspension of your 3P seller account entirely.

When selling on Amazon and using FBA, Amazon assists with many of the customer service issues. However, the 3P seller should expect to deal with customers (or competitors posting as customers) making false claims such as damaged when delivered or getting a fake product.

Brands that handle 3P sales themselves should invest in software and staff to handle customer service, whereas if they choose to sell via a dedicated 3P specialist, this cost will be shouldered by the 3P marketplace specialist.

Yet, what are the advantages of outsourcing this function as compared to just doing it yourself?

Moderate Advantage: Selling via 3P Specialist

 

Optimize Product Listings

Optimizing product listings across multiple 3P marketplaces can significantly drain resources for brands with multiple products.

For every product listing, adequate research should be performed to determine which search terms consumers use to find that product, as well as how best to describe the product in a way that will result in maximum conversions.

High quality images should also be created and included with each product listing.

Once listings are optimized, key attributes could be A/B tested to further improve performance.

Listing optimization requires expertise and/or software investments for:

  • Photography
  • Copywriting
  • Keyword research
  • Split testing

Brands with 3P sellers should expect to invest in software and staff to handle this.

Significant Advantage: Selling via 3P Specialist

 

Create and Manage Advertising Campaigns

Creating and managing advertising campaigns is a key component of your eCommerce strategy.

Listing optimization will help increase your market share, but without effective advertising, expect to see slow market saturation for your new products or worse, get beaten by brands that advertise more.

Creating and managing profitable advertising campaigns across multiple channels requires a very high level of expertise, as well as powerful software. In the absence of either, your advertising campaigns are highly likely to fall far short of expectations.

Companies who are dedicated 3P sellers invest significant time, energy, and resources into improving their ability to create and manage profitable advertising campaigns. Brands can save significant amounts of time and money by working with 3P partners who already posses these skills versus attempting to hire staff to develop those capabilities internally.

Significant Advantage: Selling via 3P Specialist

 

Create and Manage Product Promotions

Promotions are powerful tool for increasing sales on 3P marketplaces. Promotions can be used for:

  • Launching new products
  • Holiday specials (Black Friday, Prime Day, etc…)
  • Quantity discounts

In Amazon, Lightning Deals are among the most powerful ones because unlike regular promotions where special offers might not be seen without a corresponding advertising campaign, a Lightning Deal simultaneously offers the promotion a very high level of visibility that translate to more sales.

Moderate Advantage: Selling via 3P Specialist

 

Multi-Channel Fulfillment

With the Amazon FBA program, fulfillment for orders placed on Amazon is handled by Amazon; however, if you sell your products on Walmart, Jet, and eBay, a fulfillment solution is required as none of these other 3P marketplaces offer fulfillment services.

Fulfillment is a very complex business process that requires an extremely high level of expertise to manage at scale. To succeed, brands should invest significant resources in software and staffing in order to succeed. Alternatively, brands could choose to outsource fulfillment to a 3P fulfillment partner. If outsourcing is the preferred method, brands should still expect to devote a portion of someone’s time to manage that relationship.

Professional 3P sellers who already sell on multiple 3P marketplaces will already have systems and/or a partner in place to effectively manage multi-channel fulfillment. Brands that choose to partner with 3P sellers can avoid the time consuming process of either selecting a 3P fulfillment partner, or of handling marketplace fulfillment internally.

Moderate Advantage: Selling via 3P Specialist

 

Keep Inventory in Sync

When selling across multiple 3P marketplaces, inventory management can become a significant issue because your inventory is going to be located in numerous warehouses. In most cases, this will boil down to inventory in Amazon’s warehouse, inventory in your warehouse(s), and if you use a 3P fulfillment partner, inventory in their warehouse as well.

With products spread across multiple warehouses, keeping inventory in sync is critical and will require investments in software and staff in order to succeed.

Moderate Advantage: Selling via 3P Specialist

 

Reporting & Analytics

Amazon Seller Central provides a large number of reports, though the presentation of the data is not overly user-friendly.

To make reporting more user-friendly generally requires an investment in additional software to parse and present the data in a way that makes it much easier to analyze.

Moderate Advantage: Selling via 3P Specialist

 

Managing Shipments to Amazon

Of all of today’s 3P marketplaces, Amazon is by far the largest and brands should expect the lion’s share of revenue to come from sales on Amazon. As a result, ensuring that products are in stock in Amazon’s warehouse(s) is critical.

Keeping stock in Amazon’s warehouses requires the 3P seller to invest in staff to monitor inventory levels and regularly create shipments to be sent to Amazon.

Depending on the number of SKUs in a brand’s product line, the demands for managing shipments to Amazon can vary from relatively little, to significant. For example, if a brand is going to handle 3P selling internally, they should expect to have to ship every order to at least three of Amazon’s warehouses. If products are sold in multipacks, brands should aslo expect to create any product bundles that are needed.

Alternatively, if brands elect to work with a 3P marketplace specialist, all they need to do is send pallets to the warehouse operated by their 3P partner.

Significant Advantage: Selling via 3P Specialist

 

Tracking Down Lost Items

Amazon is notorious for losing inventory that is shipped to their warehouses, and whenever inventory is lost, you need to provide Amazon with an invoice from your supplier to open a support case.

But what if you are the supplier? There’s less likelihood that Amazon will accept an invoice you issue to yourself. Given how particular Amazon is about documentation submitted, this could be a very significant issue for brands that choose to manage their own 3P selling.

Assuming Amazon will accept your brand’s invoice-to-self, there is still the ongoing time-suck that will inevitably result from having to communicate with Amazon to chase down lost inventory and get a reimbursement.

Significant Advantage: Selling via 3P Specialist

 

Accounting

If a brand decides to handle 3P sales internally, they should expect a significant increase on the burden placed on their accounting department because, instead of only having to deal with a smaller number of large orders as they do now, they are going to have to accurately account for thousands of small orders every month.

Significant Advantage: Selling via 3P Specialist

 

Tax Nexus

Selling on 3P marketplaces may create tax nexus, especially if the brand is storing inventory in Amazon’s (or other’s) warehouses.

Additional tax nexus requires additional tax collection and remittance, which in turn requires an investment in software and staffing to manage the process.

Moderate Advantage: Selling via 3P Specialist

 

Day to Day Involvement

 

Brands that are handling their own 3P marketplace sales should expect to manage a LOT more moving parts than they might think. To succeed, will require investing in software and staffing to manage the following:

  • Product feeds on multiple eCommerce marketplaces
  • Controlling pricing
  • Monitoring listing for unauthorized sellers
  • Generating product reviews and responding to negative ones
  • Customer service
  • Product listing optimization
  • Advertising campaigns
  • Product promotions
  • Multi-channel fulfillment
  • Inventory sync
  • Shipments to Amazon
  • Reporting & analytics
  • Tax nexus
  • Accounting

Significant Advantage: Selling via 3P Specialist

 

Financial Comparison

Would insourcing make economic sense for some brands?

The answer is, “it depends”.

To help you think through the math, let’s consider a few assumptions and examine a few different scenarios for sales on Amazon. Other marketplaces will have similar expenses.

Scenario #1: Brand with $30,000/mo in Amazon sales

If your total sales on Amazon are $30,000 per month, the “additional” gross profit you could hope to earn by handling 3P sales internally would be approximately $3,000/mo; not nearly enough to cover all the software expenses and payroll needed.

Scenario #2: Brand with $80,000/mo in Amazon sales

If your total sales on Amazon are $80,000 per month, the “additional” gross profit you could hope to earn by handling 3P sales internally would be approximately $8,000/mo; just barely enough to cover all the software expenses and payroll needed – especially when you factor in the costs for recruitment, training, and traveling to conferences.

Scenario #3: Brand with $150,000/mo in Amazon sales

If your total sales on Amazon are $150,000 per month, the “additional” gross profit you could hope to earn by handling 3P sales internally would be approximately $15,000/mo; enough to cover all the software expenses, payroll, recruitment, training, and travel expenses needed for one employee – assuming you can get by with just one person handling it all.

Advantage: Varies on Sales Volume and Headcount

 

Conclusion

As you can see, for a brand that wishes to manage their 3P marketplace sales internally, there are a lot of moving parts to manage.

For brands that are considering going the internal route, our hope is that this article has brought some additional insight to your decision making process.

With respect to hiring a dedicated employee, some additional questions you should ask yourself include:

  • How will we find someone for this?
  • As we aren’t eCommerce experts, how will we know if the person we find is any good until many months have passed?
  • What is the cost of a bad hire?
  • Are we willing to accept the risk that the person we hire could leave at any time?
  • Have we adequately considered the costs associated with payroll burden (20-30% of salary) and the expenses associated with traveling to all the conferences that they will need to attend to keep abreast of changes to any of the major 3P marketplaces?

We can Help

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with Amazon.

Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims

Understanding the dynamics of selling on Amazon is very important and understanding how the number of 3P sellers for your brand can impact sales, brand equity, customer service and pricing.

The more number of sellers, the less control you have over your brand in terms of pricing, content, promotions, advertising, and customer service.

The Downside of Having Multiple Sellers

Spreading your brand too thinly in the Amazon Marketplace with a lot of sellers can be dangerous. You get to have your hands full monitoring your 3P sellers instead of focusing more on the growth of your brand.

More sellers mean more exposure? Not really, here are some reasons why.

Consumer Demand is not dictated by the Number of Sellers

Amazon is nothing more than a consumer product search engine, and the number of sellers of your brand has no impact on the number of times a given search term(s) is typed into Amazon’s search box.

Instead, demand is driven entirely by consumer’s search actions.

This is what actually happens…the demand is spread amongst all of the sellers, with no one winner.  However, in an attempt to capture more sales, the different sellers acting in their own interest start to compete aggressively.

Racing to the Bottom on Pricing

The more sellers competing for the buy box, the faster these sellers start racing to the bottom on price, violating MAP policies and negatively affecting your offline retailer partners in the process.

With one or two sellers, there is no need to compete for the buy box, and therefore, no reason to deviate from MAP pricing, which means bigger profit margins because they won’t be asking for wholesale discounts to compete in a price-lowering chase.

Fewer Sellers Means More Focus on Ad Spend

If you want to increase your product’s market share, ensure you have as few sellers as possible and ensure that the ones you do have are committed to investing a portion of their profits into advertising your product.

Having too many sellers guarantee that each seller will not have enough profit to justify creating ad campaigns – and your product’s market share will stagnate, or possibly even decrease.

No Listing Ownership / Optimization

The quality of your Amazon product listings influence how well your products rank in Amazon’s search results and determine how potential buyers are converted to customers once they reach your product pages.

With multiple sellers on any of your product listings, not one seller has the responsibility to take ‘ownership’ of optimizing your product listings or invest in time and resources to optimize product listings to its fullest.

In other words, by having just one seller who owns the buy box, that one seller is every bit as motivated as you are to do everything possible to maximize sales.

No Control of Brand Promotions

If you have multiple sellers on each product listing, it would be daunting to manage and monitor your promotions during holidays or special occasions, such as New Year, Black Friday, Valentine’s Day, etc.

With multiple sellers, it’s becomes more difficult to control what sellers are going to do and are less likely to coordinate with each other, resulting in a complete lack of any cohesive promotional strategy.

With just one seller on each of your products listings, product promotions can be strategically planned. Then when it comes time to run the promotion, the mutually created plan is executed and results are measured; thereby giving you the much-needed data to make better decisions about future promotions.

 

Customer Experience is At Risk

When consumers purchase your products on Amazon and they have a problem or a question, they are going to contact the seller via email.

It is critical to remember is that these consumers won’t necessarily realize they aren’t communicating with your brand, so if the customer service they receive is below expectations, they are going to blame the brand, not the seller.

With multiple sellers on a product listing, it will be nearly impossible to ensure a consistently positive customer experience. Instead, brand reputation will be the result of the collective experience that thousands of customers have with companies. You have very little control over this experience, and will not be able to build the trusted relationship you would expect to have with just one or two authorized sellers.

With a single trusted seller on each product listing, customer service levels are going to be exactly where they need to be to build the brand equity to maximize the growth of your brand.

Conclusion

The more sellers on your product listings, the less control you are going to have that can negatively impact your brand in the long term, cause price wars, affect customer service, and aggravate brick & mortar retail partners.

It’s better to find a preferred 3rd party seller, grant them exclusivity – once they are proven worthy then work with them to systematically remove all the unauthorized sellers that are currently on your product listings.

We Can Help!

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with Amazon and eBay.

Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims

 

 

Amazon accounts for a large portion of online sales. In fact, Bloomreach reports that 50% of United States shoppers start their online product search on the Amazon platform. With that volume of shoppers, there is fierce competition on Amazon.

 

One way you can make your products stand out is through paid advertising and Amazon offers advertising through two different merchant channels:

  • Sponsored Products, through Seller Central, and
  • Amazon Marketing Services (AMS), available through Vendor Central and Vendor Express.

As shown, shoppers tend to click on sponsored ads even more than they click on organic search results.

Here’s how to best advertise on the Amazon marketplace.

An Overview of PPC

The primary advertising on Amazon is using Pay Per Click (PPC). With a PPC advertising campaign, your products are shown to shoppers who enter specified keywords, and you pay each time one of your product ads is clicked.

PPC campaigns provide metrics to show how well your advertising campaigns are working and allow you to find your high performing keywords.

To help you get the most from your advertising budget, you can adjust your campaigns as they are running. If you run PPC ads incorrectly you can pay for a lot of clicks and make very few sales.

PPC Causes Organic Sales to Increase

When using PPC advertising you’ll start to see sales increase in two ways – direct and indirect.

You’ll immediately see sales that result directly from someone who clicks on your ads.

However, a significant factor in Amazon’s algorithm for organic search results is sales volume.

So, if your products begin to sell more (even if those sales are happening through paid advertising), they’ll show up higher in organic search results. In some instances, it is possible to use PPC to get your product to rank organically on page one, and organic sales may be enough to keep it there.

A successful PPC campaign should spend as much as possible on advertising that offers a positive ROI. You may also decide to sell at a loss in order to move your product up higher in the organic search results.

Here’s how it all happens.

Phase 1: Detail Page Optimization

In order to set up a Sponsored Products ad in Amazon, you must make sure your detail page is fully optimized. This means that every part of your product detail page must be effective and relevant, including the back-end of your listing.

On your detail page:

  • include relevant keywords
  • enter your target audience
  • select intended use for your product
  • enter subject matter

 

Keywords are a critical part of your optimization. Throughout the process of running your Amazon PPC campaign, you will determine which keywords are the most effective. Properly selected keywords will help make your advertising profitable.

Phase 2: Let Amazon Do the Work

Start your PPC endeavors with an automatic “broad match” campaign. These campaigns allow Amazon to select keywords and bid for you.

After a grace period to get some data (usually around 3 weeks) Amazon then allows you to download the search term report to show you which keywords were profitable and which were unprofitable.

At this point, you can begin to tweak your auto campaign to exclude unprofitable keywords. Amazon’s auto campaign will be forced to look for new keywords that are not included in your list of negative keywords.

Depending on search volume for your product, you can add negative keywords approximately every 10 days for the first month, and then less frequently. This will take longer if your product has a low search volume.

Phase 3: Bid on Popular Keywords

In order to determine how much you’ll need to pay for highly competitive keywords, we recommend you start with a $10 bid and let the campaign run for two days.

The goal of this approach is to rapidly uncover ALL the potential keywords that consumers are using to find your product. Keep in mind that just because you set your bid maximum at $10/click doesn’t mean you are going to pay $10 for every click. The goal is simply to ensure that you don’t miss out on any potential keywords because your bid was too low to get impressions for that keyword.

Phase 4: Leverage Profitable Keywords

After 3 – 4 weeks, you will hopefully have a handful of profitable keywords. Now it is time to set up manual campaigns using “exact match” keywords.

You will create these using:

  • any profitable keywords uncovered from your auto campaign
  • keywords you suspect will work that Amazon’s algorithm didn’t uncover

At the same time, you still want to run your auto campaign. However, you should remove any keywords that were profitable and you have added to a manual campaign.

Again, depending on product search volume, you might do this every month (more often for very high volume products).

The longtail keywords you uncover in your product research will be lower volume searches, but will be less competitive and therefore a lower bid.

The goal of this ‘long tail’ approach is to find as many low-competition keywords as possible that, in aggregate, generate a large number of sales.

Phase 5: Update Product Detail Keywords

You should use the results of your auto campaign not only to create and modify your manual campaign but also to modify the keywords on your product’s detail page.

Sellers should target different types of keywords in order to have success. This idea goes past the typical broad, phrase, and exact keyword types for your listing (see image below).

You must also focus on competitor branded keywords, branded product keywords, and negative keywords. Each type of keyword has their own benefits and will either boost or restrict the amount your ad is shown and for which search terms it is shown for.

 

Phase 6: Using Amazon Marketing Services

Up to this point, we have been talking about advertising that is available through Sponsored Products and a Seller Central account. PPC advertising is also available with Vendor Express’ Amazon Marketing Services (AMS) in addition to Sponsored Products.

Vendor accounts are free, but typically more difficult to get – which is why the cost per click with AMS is generally lower than with Sponsored Products.

In addition to potentially lower cost advertising, AMS allows for additional advertising opportunities, some of which offer significant advantages.

Headline Search Ads

Headline Search Ads (or banner ads) show up in the top banner & link directly to your chosen URL. This can be your Amazon-branded page, or it can be an off-Amazon URL. Either way, you won’t have competitors shown on this page, which is a huge advantage.

Product Placement

Amazon Product Display Ads allow you to advertise individual products and drive traffic to the product’s detail page. With AMS, your options for placement of your product ads include the slot right below the Add to Cart button, meaning that shoppers will see your product at the moment they are making their buying decision.

This type of ad also allows you to target a specific competitor.

What Results Should I Expect?

The results you’ll see from your Amazon advertising campaigns will vary widely depending on the search volume and level of competition.

You can find detailed analysis of a product launch here.

 We can Help

At Jim’s Whims, we have demonstrated experience spanning years assisting brands with Amazon.

Additionally, we can bring value to our brand partners by improving Amazon listings optimizations and Pay Per Click (PPC) Advertising campaigns at a very reasonable cost while building your brand with your image. We’re upbeat about the future, and would love to talk further, call us at (469) 487 8221.

About Jim’s Whims

We’ve built relationships on trust, results, and a long-term vision for growth and sustainability. Ultimately, we are passionate about creating a business of quality endeavor and connectivity. This is how we seek out partnerships with brands and distributors; a genuine, personal investment in the lives of customers. We will get to know you. You will get to know us. Let’s get to mixing!

By: The Team @ Jim’s Whims