January 12, 2021

All the Cost Savings of a Pattern Partnership

By John LeBaron / Brand Protection, Brand Growth

Growing an ecommerce business can get pricey. When you’re selling on Amazon as a 1P seller, you have to cover damage and freight allowance fees as well as base accrual fees. Then you have to pay personnel or an agency for advertising and marketing. Even more costs get tacked on when you start expanding into new markets or channels. Soon, you’re spending more money than you have to.

A better solution is a partnership with an exclusive third party seller like Pattern. Pattern provides you with almost every service you need to grow on ecommerce—this includes marketing, SEO, shipping, customer experience, and marketplace expertise to name a few. Rather than make several different payments, the cost of these services are consolidated into one affordable fee (a lower margin when we buy your product), helping you save money and grow your business more quickly in the process.

Here are some important cost savings to consider as you consider a partnership with Pattern.

Immediate savings

Amazon Fees

Selling in a 1P relationship with Amazon can get spendy, because there are lots of different allowances and fees you have to cover. Amazon charges 3-10% of your Amazon sales for damage allowances and returns, and your base fees alone will cost 12-30%. Even in an insourced 3P relationship, where those fees don’t apply, you’ll end up paying 3-30% for FBA.

When you work with Pattern, you pay nothing to Amazon and your FBA fees are included in your partnership fee. We also cover logistical costs you’ll need to address, like inbound shipping, labeling, customer service, and Amazon error reimbursement.

Agency Costs

Most businesses will hire a variety of agencies to grow their business and improve their branding, but for every different agency you work with comes a separate cost you’re having to make upfront for their services. Pattern cuts those costs down or out completely by giving you one source to pay rather than two to five. We also help you save on agency costs because your contractual agreement with us will be for a shorter time period: most Pattern contracts have a sixty day minimum.

Ad Spend

Advertising is a key component of ecommerce success. Most brands either pay a third-party service for advertising support at a high cost, or they hire internal staff to manage ads. A Pattern partnership can eliminate the need and cost for both, as we offer campaign management, proprietary optimization technology (Predict), and robust metrics reporting far beyond what Amazon shows in Seller Central. We also give our partners access to a digital shelf for their products and Laddered Destiny keywords. All of this is included in our partnership at no charge. 

Our partners are responsible for contributing the marketing spend for advertising efforts.

Indirect/long-term savings

Pattern doesn’t just save you on Amazon fees. We also help you grow your profits long-term with data analytics, price control, omni-channel growth, and a team of experts who can help you extend your reach internationally when you’re ready to make that step.

Data Analytics

Amazon doesn’t provide their 1P sellers with data about their conversion rates, which makes it tricky for brands to grow in that space. At Pattern, we eat, sleep, and breathe data, and we use it to help our brands achieve long-term growth.

A partnership with Pattern gets you data about things like what keywords increase your conversion rates and organic ranking and what how your customers feel about your product. We leverage predictive modeling and A/B testing to show you what works for your listings and what doesn’t. That’s all included in your Pattern bundle through our Predict software.

Price Control

Wide distribution of your product can lead to unauthorized sellers in the ecommerce space violating your MAP and eroding your pricing online and offline. This can eat away your margins and long-term profits as well as harm your relationship with your authorized distributors.

Pattern gives you the tools to eliminate bad players, get your pricing under control, and enables you to better enforce your policies so that your long-term growth is both sustainable and protected from bad players. That helps you save both online and in your brick-and-mortar channel, because distributors can sell your product without worrying about their margins being cut.

Omni-channel & International Growth

When the time comes to expand your business, Pattern can help you tackle both domestic fronts and international fronts. While a single agency may only have expertise in one marketplace, Pattern has the ability to help you replicate all categories in multiple marketplaces and countries.

These kinds of services get spendy when you outsource them in a 1P or 3P limited relationship, because you’re paying for a variety of specialized services and personnel. At Pattern, we have feet on the ground in the most lucrative international markets as well as experts familiar with marketplaces across all channels where you can grow your business, like Amazon, Walmart, Amazon.UK, Alibaba, and JD.com.

Opportunity costs

A partnership with Pattern isn’t right for every brand—having more distributors to mitigate risk might be in your best interest, for example—but 97% of the brands we work with continue to work with us beyond their contract date because of what we can do for their business. The opportunity costs of going with a different kind of partnership are simply too great.

Pattern helps brands get additional revenue by cleaning up their channels and increasing their conversion rates by up to 40%. We also get our brands additional margin by helping them gain control on ecommerce.

The resources we offer brands aren’t just designed to clear up space for them on ecommerce. They help our brands become standouts in crowded channels and give them the brand presence customers love and trust.

To learn more about the cost savings you might experience in a partnership with Pattern, contact us using the form below.