Why Having Multiple 3P Sellers Kills an Ecommerce Advertising Strategy

Tony Morales

January 27, 2021

Advertising is the ticket to making more ecommerce sales, but what many brands don’t realize is that the effectiveness of their advertising can be hampered by the number of sellers they have distributing their product online.

Having more sellers might seem like an easy way to raise awareness of your brand across a myriad of different markets. This may have some truth in brick-and-mortar settings, but online the truth is that the more sellers you have, the more harm it does to your advertising strategy. Multiple 3P sellers aren’t your secret weapon for making sales, at least not for long. They’re one of the biggest obstacles stopping your brand from growing long-term.

Why multiple 3P sellers are bad for ad strategy

Having multiple 3P sellers might make sense from an advertising perspective when you initially think about it—the more sellers you have distributing your product, the more far-reaching your brand and therefore, the higher your revenue, right? Not quite. It’s far less idyllic than that. The reality is that multiple 3P sellers can corrode your brand’s longevity right under your nose, harming your pricing and, more to the point, wrecking your advertising in the process.

Having multiple 3P sellers harms your ad strategy in five primary areas:

  1. Conversion rate
  2. Buy Box ownership
  3. Cohesiveness
  4. Ad bids
  5. Pricing

1. Multiple 3P sellers harm your conversion rate

Your product listings are, in many ways, the face of your brand. How they look directly impacts your conversion rate, and since converting traffic to sales is your goal as a business, it’s really important that your listings look sharp. To keep them looking sharp, you have to stop ceding control to so many 3P sellers.

Multiple 3P sellers don’t have the same incentives you do to make listings for your product look clean and consistent. While you’re concerned about how consumers perceive your brand, many 3P sellers are far more concerned with how they can compete on price to get ahead. This means they may get sloppy and lazy, posting low quality images of your product or providing too few images in the stack to give customers a good idea of what your product is and how to use it. They might post poorly written copy, not provide enough information, or fail to effectively utilize the space on the page to engage customers.

All of these things work against you by making your customers lose confidence and trust in your product, the buying experience and, by extension, your brand. That’s a key thing to remember. How your product is portrayed by one seller reflects on your brand as a whole, and if you have too many sellers doing a shoddy job of their listings, you’re going to tank both your conversion rate and the way consumers view your brand.

2. Multiple sellers affect your Buy Box ownership

The Buy Box on Amazon is prime real estate. It can jet propel your sales and conversion rates and get your brand invaluable exposure. Winning it also unlocks Amazon’s coveted sponsored ads. That means you want to win the Buy Box as often and consistently as possible.

While winning and maintaining the Buy Box isn’t hard to do with one 3P seller and a strong presence on Amazon, having multiple sellers can put a lot of jarring stops and starts into your ad strategy and give you less control, even leading to Buy Box suppression as you lose out on pricing control.

Amazon gives a higher percentage share of the Buy Box to the strongest seller on a listing. That seller might get 80% of the day, for example, while a lower-ranking seller gets the remaining 20%. Without 100% of the Buy Box, you can’t have 100% ownership of the day, which means you can’t decide when your sponsored ads run. They might run at a time that isn’t very conducive for sales as a result.

Another downside of having too many 3P sellers is that you essentially have to round robin winning the Buy Box. It can take a lot of time and work to coordinate everything.

3. More than one 3P seller makes your strategy less cohesive

For an ad strategy to be most effective, it needs to be aligned across targeted keywords, competitors, and content and look the same across all channels. It takes a lot of work to organize it all, and (as you can imagine) this is significantly easier to accomplish with fewer sellers.

The wider your distribution, the more work you have to do for a successful ad campaign, like communicating with all sellers on promotions, calendaring sales, supplying marketing materials, and more. In this scenario, you can’t always count on a wide network of sellers to execute your sales effectively. What typically ends up happening is your ad strategy is inconsistent and incohesive among your sellers, therefore not as strong as it could be.

4. Multiple 3P sellers may increase the cost of your ad bid

Aside from wrecking your conversion rates and requiring a lot of coordination, a wide distribution of sellers can also cost you more in ad spend. Without strong communication between your sellers, it’s very likely they’ll end up competing on the same keywords and drive up the cost of the bid for them on Amazon, resulting in a lower ROI and intrabrand competition. The last thing you want to do is watch ten different sellers waste your advertising dollars to compete with each other and win few sales for you in the process.

5. More than one 3P seller causes price erosion

Selling on ecommerce marketplaces is like juggling: the more balls you have in the air, the harder it is to manage them. When you don’t have control, one or more of them will go rogue and then soon all of them will come toppling down on top of you. In ecommerce, price erosion is when the balls fall.

Price erosion is what happens when a seller drops the price on a product below MAP to get ahead and win the Buy Box, forcing other sellers to lower their prices on that product to compete. These sellers will keep moving on price to beat each other out, and pretty soon, your product will have been stripped of both its value and its margins. This not only harms your brand online, but it damages your relationship with your brick-and-mortar distributors by corroding their margins. Left unchecked, this price erosion will keep happening and it can lead to a profitability death spiral where your products fail to make a profit. Pretty bleak, isn’t it?

The worst bit is that when price erosion is happening, advertising can make it worse. Any attempt you make to advertise a product that isn’t already in the Buy Box will inevitably drive traffic to the listing with the lowest price. Inadvertently, you’ll end up accelerating your own price erosion and the profitability death spiral.

How Pattern can help

One way you can solve your advertising problem is by narrowing your 3P partners down to exactly one: Pattern.

Pattern is like the Swiss army knife of your ecommerce business, because we offer you every tool you need to clean up your channels, enter new marketplaces, and grow your profits long-term. When it comes to multiple 3P sellers, we pinpoint and help you eliminate the bad players eroding your prices, sharpen your listings, help you win the Buy Box, and do the grunt work to make your advertising strategy cohesive across all channels.

We use data science to revitalize your brand presence from top to bottom and help you win big on ecommerce. We can also take your brand into new frontiers like Walmart Marketplace or even further to international marketplaces to help your brand make a global footprint. We aren’t just one of your sellers. We’re a partner that loves your product as much as you do and puts your success first.

To get started or learn more about how a partnership with Pattern can help your business, contact us with the form below.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 26, 2022

Top 5 Ways to Prepare for Peak with Google Ads

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.

1. Go Early

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.

2. Get Ready for Privacy Changes

 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.

3. Ensure Consumers Can Discover your Brand

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)

4. Get Moving with Performance Max

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.

5. Flight Budgets Accordingly

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.

Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

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. 

What is an Ecommerce Consultant?

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.

1. Brand Obsession/Specialization/Passion

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. 

2. Proven Results

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.

3. Wide Range of Marketplace Expertise

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.

4. Network of Resources

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.

Achieve Your Ecommerce Goals With Pattern

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.