If you’ve already decided that, as a brand, you do not want a 1P relationship with a marketplace, you are faced with a number of different options for how you might want to have your brand represented online. The bottom line is that your products will find their way into ecommerce whether you want them to or not. Here we will run through 5 different ways you may or may not want to have your brand represented online by marketplace sellers.
The idea behind arbitrage is simple—buy a product somewhere, then sell it somewhere else at a higher price to make your profit.
Have you ever heard someone talk about goods they acquired that “fell off of the back of a truck”? While it wouldn’t be fair to say that all goods sold by arbitrage sellers are acquired illegally (though it’s not outside of the realm of possibility), they are not acquired by typical wholesale methods and the sellers are not authorized by the brands.
This includes, but is not limited to, methods such as liquidation events, holiday sales, or price matching schemes. Sellers will buy products in bulk at a steep discount, then list them for sale online.
Arbitrage sellers are most concerned with selling as many products as possible at the best price, regardless of the impact it has on your brand. Methods brands can use to fight against arbitrage sellers acquiring their products include limiting discounts, limiting purchase quantities, looking for leaks in their supply chain, creating online-only product lines, and creating and enforcing a MAP policy for online sellers.
Dropshippers are actually just another type of arbitrage seller. Imagine you order something on Amazon, and a Sam’s Club box shows up at your door. It’s far more likely that you’ve encountered a Dropshipper than Amazon starting to use Sam’s Club boxes.
If something can be found cheaper on one marketplace than another, you can be sure there will be dropshippers. Using the previous example, if something can be found cheaper on Sam’s Club, it’s simple to create an Amazon listing for it, wait for you to order it, then order it themselves on Sam’s Club and ship to your address.
Similar examples are seen on MercadoLibre in Mexico. A U.S. based product might be listed for sale for $7000 pesos (around $344 USD), when in reality it only costs $150 USD. The seller hopes someone will buy it at that price, then order it and have it shipped to their location in Mexico.
Most marketplaces prohibit this kind of selling, and when they are encountered, they can be reported.
Brands sometimes represent themselves on marketplaces if they don’t have or want a 1P relationship. Successful brands that run their own 3P seller account include brands such as Anker, Fintie, and Spigen. This can be advantageous for a brand as they would have control over their pricing and their content.
The problem most often encountered here is that a brand will assign a single person or small group of people to run their entire ecommerce operation. That person or small team suddenly becomes tasked with running Amazon, Shopify, Walmart.com, and maybe other channels like eBay, Newegg, Wayfair, with the list getting longer and longer.
And that’s without listing international ecommerce opportunities. They will need to coordinate logistics, inventory management, advertising, content creation and updates, account health, new product launches, holiday promos and sales events, etc.
Running ecommerce for a brand and doing it well is a huge undertaking, which leads us to our last two types of 3P sellers.
These 3P sellers are ecommerce experts and work with brands to sell their products all over the internet. The relationship may work much like a brick and mortar retail partnership and their goal is simple—sell as many of the brand’s products as possible and keep making purchase orders to the brand to keep them happy. Lather, rinse, repeat.
It should be cautioned though that these sellers may not make commitments to maintain pricing for brands or for sharing the brand’s concern for their brand image and messaging. They’ve already bought the product from the brand, and if the market is demanding a lower price, they will follow in order to make sure they keep products moving off of their warehouse shelves. This reduces their margin, and often leads to the seller asking for lower wholesale prices from the brand in order to be competitive.
Ignoring price policies and brand quality checks can ultimately lead to a Profitability Death Spiral for ecommerce where profits are cut out for the brand.
3P sellers that create truly mutually beneficial partnerships with brands are few and far between. Much like an authorized retail partner, they buy products from the brand at wholesale and are authorized to sell those products on marketplaces approved by the brand.
A mutually beneficial partnership with a 3P seller should include terms such as:
The goal of this type of partnership should be that when the brand grows, so does the business of the seller.
Enter Pattern, the premier partner for global ecommerce. Pattern is by far the top ranked 3P seller within this brand partnership seller model and a top 5 seller on Amazon overall. And we do it all while growing and protecting our brand partners. If you’re interested in seeing how a Pattern 3P partnership can help you find success, schedule a demo of our services here.
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Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.
In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.
From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.
According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.
From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.
It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.
A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.
Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.
The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)
Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.
Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.
Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.
Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.