Exclusive 3P Seller Checklist: What Brands Should Look For in an Exclusive 3P Seller
For some brands, having an exclusive 3P seller is the best option for optimizing their growth and revenue. As more and more companies realize the benefits of the exclusive 3P selling model, more 3P sellers crowd the market. The result is a significant amount of noise, with newcomers and fly-by-nighters vying for brand attention. Oftentimes, 3P seller pitches become indistinguishable, leading to confusion for companies choosing a 3P seller.
Brands evaluating 3P sellers should carefully probe and evaluate the following criteria before selecting an exclusive seller for their products on Amazon:
- What major brands are they already selling? The ideal 3P seller will already represent multiple major brands and be able to quickly provide references.
- What level of sales is the seller generating in marketplace channels on behalf of its partner brands? The most successful 3P sellers are selling in excess of $300 million of their partners’ products annually.
- Do they have the ability to distribute into and sell your products on international marketplace platforms? The best 3P sellers have the ability to help you syndicate your brand presence across major international online marketplaces, providing a global, one-stop marketplace solution.
- What is their average customer annual growth rate? The best 3P sellers will be fully transparent with respect to their average brand partner growth rates, which should significantly out-pace industry average growth rates.
- What is their average brand partner MAP compliance rate? In the US, the best 3P sellers will be similarly transparent regarding the overall MAP compliance rates for the products they sell.
- Will they pay for the legal foundation necessary to achieve control over your online sales and stabilize your channels? Will they pay for the unauthorized seller enforcement truly needed to clean up your channels? The best 3P sellers happily pay these costs because they know that this work is critically important for them to realize the value of channel exclusivity through maximized sales and overall brand control.
- What marketing and advertising support will they provide? The best 3P sellers contribute significantly to these efforts and provide detailed analytics regarding the efficacy of various approaches so that resources can be focused on tactics that will generate real growth.
- What is their relationship with major marketplaces? Are they able to access services available directly from marketplaces on behalf of their customers? A quality 3P seller will enjoy overall positive relationships with Amazon and have meaningful contacts within the organization.
- Does the 3P seller have inherent advantages with respect to Buy Box ownership? This includes: large number of units sold over time, a very high seller rating, high sales volume across multiple product categories, low defect scores, and the ability to purchase and maintain large amounts of inventory. The most successful 3P sellers share this data and clearly explain how it benefits their ability to win the Buy Box over lesser sellers.
- What investments has the 3P seller made in personnel who have deep experience growing brands on marketplaces? What specific marketplace expertise do these individuals or teams bring? The best 3P sellers have retained high level ex-Amazon and other marketplace executives, they have top notch data and technology teams, and they have first in class distribution processes around the world.
- What enhanced quality control measures will the seller implement with respect to your products? The best 3P sellers will go the extra mile to provide enhanced quality controls, inventory auditing procedures, and other testing to ensure the highest quality product in-channel and to best support legal claims against unauthorized sellers.
- What data and analytics can the 3P seller provide? The best 3P sellers provide robust monitoring and data that enhances their ability to drive sales rather than simply report on “vanity” metrics.
- What is the 3P seller’s customer retention rate over time? The best 3P sellers have high customer retention rates across a number of different product categories and will be fully transparent with that information.
- What case studies is the seller able to present? The best 3P sellers will have case studies clearly explaining how their efforts lead to material shifts in business success for their partner brands.
- What top tier references can the seller provide? The best 3P sellers will be able to provide multiple references at diversified businesses for which they have delivered superior results.
Exclusive 3P Seller Red Flags: When to Keep Looking
As the Amazon marketplace continues in its dominance of the US ecommerce landscape, new “professional” 3P sellers pop up all the time. Each has a slick website and makes largely indistinguishable promises concerning increased sales, channel management, and the like. However, in the world of 3P resellers, not all are the same.
When you identify the following issues, consider looking elsewhere:
- The 3P seller represents only a few smaller brands or a series of obscure brands about which you have no knowledge or familiarity.
- The 3P seller is unable to present clear, comprehensive case studies demonstrating their partner brands’ successes over time.
- The 3P seller is unable to commit to regular product purchases at market-appropriate levels.
- The 3P seller lacks true internal thought leadership in terms of marketplace strategy, data and analytics, and fulfillment processes.
- The 3P seller is actually a former diverter or gray market 3P seller and is now simply dabbling with direct buying relationships.
- The 3P seller lacks any distribution or fulfillment capabilities.
- The 3P seller cannot offer services on international marketplaces.
- The 3P seller is unable to provide sophisticated data and analytics around marketing and advertising spend and/or enforcement efforts.
- The 3P seller is unable to provide enhanced quality controls for products sold into the marketplace channel.
- The 3P seller can’t or won’t fund the legal work needed to support this model.
Gain Control of Your Online Channels With Pattern
Many brands can significantly alleviate—if not solve—their biggest pain points on ecommerce marketplaces by moving towards an exclusive 3P strategy. The alternative is to do nothing and turn a blind eye to 3P sellers’ actions and developing brand control issues or keep products solely 1P and face consistent downward pressure on your brand value. By placing your products with a strong 3P seller on Amazon and conducting robust enforcement against remaining unauthorized sellers, brands can stabilize their brands on Amazon and across their other channels while realizing increased growth.
Pattern is a global exclusive 3P seller, data provider, and strategic partner. If your company is considering using an exclusive 3P seller, confused about the best go to market strategy for your products, or has marketplace challenges you want to solve with an E3P solution, get in touch today to learn what Pattern can do for your brand.