CEO’s Top 5 Pain Points of Selling on Amazon

Rebecca Brown

October 27, 2022

At Pattern, we hear the struggles of selling on Amazon from thousands of global CEOs, and the struggles are remarkably similar. 

Learn the five top pain points of selling on Amazon CEOs are facing and how to strategically solve each to continue to grow your brand on marketplaces.

1. Owning the Amazon Buy Box

One of the biggest challenges of selling on Amazon is winning the Buy Box. All is going well, when suddenly Amazon has suppressed the Buy Box on your product and the “buy now” and “add to cart” buttons have disappeared–now what? The fateful result is Buy Box suppression kills sales. When customers are forced to take extra steps to purchase a product, our data shows the chances of them buying your product plummets dramatically.

Owning the Buy Box is essential to a brand’s success on Amazon. At Pattern, we put the brands back in control on Amazon so they have a high success rate of winning the Buy Box. Using data-driven insights and AI, we identify which products are being suppressed because of compliance issues, incomplete listings, or pricing, and execute strategies to keep margins healthy.

2. Dealing With Amazon Unauthorized Sellers

There’s nothing to keep a CEO up at night like dealing with rogue sellers on Amazon. Both unauthorized and authorized sellers who ignore MAP (Minimum Advertised Pricing) can undercut profits and shrink margins nearly overnight. It only takes one seller dropping their price to kick off a domino effect of price erosion and generally, the more sellers who compete for the Buy Box, the more likely price is to erode.

By removing unauthorized sellers on Amazon, you will boost your brand equity across digital marketplaces and protect price across all your brick and mortar channels. Pattern has the necessary relationships with Vory’s eControl to identify and remove unauthorized sellers breaking MAP, get your brand back in control, and maintain your omnichannel retail pricing strategy.

3. Price Erosion

Price consistency is key to success. No matter how good your product is, if you cannot get a consistent price on Amazon it will hurt your brand on other marketplaces and channels, even brick-and-mortar retail. Keeping up with sellers who ignore your MAP policies can be costly and difficult, and sellers who ignore MAP can shrink margins overnight.

If your prices are falling on Amazon, it’s time to find the resources necessary to stabilize them. At Pattern, we'll help your brand get its distribution strategy back on track so sellers who put your product on marketplaces are authorized distributors, maintain MAP, and stop price erosion

4. Amazon Stock Outs

Product ordering and logistics is too often a guessing game prone to human error that leads to stock-outs on one hand, and overstocks with high holding costs on the other hand. The worst part? When your product listings go out of stock, Amazon can view you as unreliable–dropping your ranking, wasting ad spend, and increasing competition from other sellers, which hurts sales and profitability.

As a Pattern brand partner, you get access to ASIN-level software that provides full visibility into your inventory position so you can maximize your ad dollar potential and avoid driving customers to out of stock listings. We make sure you never lose out on a sale or waste ad spend due to out of stock and inventory issues. 

5. Poor Listings

Poor imagery and lackluster product descriptions hurt conversion rates and lower organic ranking. Even with great products, brands can quickly lose effectiveness from a poor Amazon listing strategy. If left uncorrected, then your listing gets buried in the search results, and our data shows brands are most successful in the top 4 organic rank positions. 

As a Pattern partner, your listings are built and managed by our award-winning creative team–similar to a creative agency, without the costs, we manage strategy, imagery, bullet points and copy, video production, and optimization. Rather than being just another creative agency, we're a technology and services company that has perfected the formula for marketplace ecommerce.

Gain Control on Amazon With Pattern

For most brands, Amazon is a great tool for accelerating their product and gaining more revenue. Unfortunately, sometimes the pain points of selling on Amazon limit brands from achieving the success they deserve on digital platforms. At Pattern, we understand the importance of gaining marketplace control of your product. We have the data and expertise to help CEOs solve their Amazon pain points and get back brand control. 

If you have any of these Amazon pain points, contact us to discuss.

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6 Executive Trading Problems on Amazon and How to Avoid Them - blog header
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6 Executive Trading Problems on Amazon and How to Avoid Them

At Pattern, we are constantly trying to better understand brands' performance and experience on Amazon through our research and marketplace data. Our latest Amazon Seller report uncovered common pain points executives faced throughout 2022 on Amazon in Europe and the Middle East. 

Not too surprisingly, there was more than one trading challenge for CEOs selling on Amazon in Europe and the Middle East. There were several top responses such as supply chain issues, advertising, and stock outs–all challenges we hear frequently from 1P Sellers on Amazon no matter the region.  

Here is what we learned about 1P seller trading problems on Amazon:

1. Getting Product into Amazon Warehouses 

Of the brand CEOs who took the survey, 52% mentioned this challenge–making it the most common issue for the second year in a row.  Basically, executives struggle with getting their product into Amazon warehouses, which typically happens because Amazon FBA can be difficult to navigate and comply with. Illegible barcodes, not labeling your products correctly, and a failure to include certain details on barcodes are all reasons your product could be rejected by Amazon FBA works. 

2. Increasing Chargebacks

51% mentioned increasing chargebacks on their products on Amazon, which occurs when brands fail to maintain stock levels or fulfill orders on time. As a 1P seller, if there are any issues with the products you send to Amazon, they will charge you for the time and effort it took for them to resolve those issues. 

Various types of chargebacks could include unauthorized use of credit cards, operational malfunctions (late arrivals, technical issues, etc.), and packaging non-compliance. In a 1P Seller relationship, Amazon will charge vendors with these chargebacks, and disputing them is typically a long, time-intensive, and costly endeavor for any brand.

3. Increasing CPC Costs for Amazon Advertising 

Increasing CPC costs for Amazon Advertising was mentioned by 45% of respondents as a top trading problem. Getting traffic to a product listing helps brands keep their inventory levels stable, so that they never have too much or too little of the product. Increasing CPC costs leads to a possible loss in traffic to a brand’s product, leading to fewer conversions and sales in the long run. 

4. Your Own Supply Chain Being Disrupted 

Sometimes it is not an Amazon issue, but an internal resource and capabilities scenario. 43% of respondents mentioned their own supply chain being disrupted as a common trading problem. Supply chains can be disrupted by a variety of factors, such as inventory order delays, supplier issues, shipping expenses, and problems with existing inventory. 

5. Inadequate Forecasting Methods to Keep Enough Stock in Hand

Many brands lack the resources and expertise to accurately forecast stock levels, according to 38% of the survey respondents. Inadequate forecasting methods can lead to high costs, non-competitive prices, and dissatisfied customers.

6. High Out of Stock Levels Due to Amazon’s Algorithm-driven Price Reductions

High out of stock levels due to Amazon’s algorithm-driven price reductions frustrated 37% of respondents in 2022. Amazon’s dynamic pricing strategy makes sure that the most competitive prices are being offered to shoppers. Low prices are great for shoppers, but sometimes stressful for brand executives. Amazon’s sudden algorithm-driven price reductions can catch a brand off-guard, leading to stockouts. 

Why Most Brand Executives Face the Same Challenges

Being in a 1P relationship with Amazon has its ups and downs—just like any relationship. One of those downsides includes the trading problems mentioned above. In a 1P relationship, Amazon buys your product wholesale and handles most of the selling details, which can be very beneficial in some ways, but may lead to less brand control on your end. Brand executives selling their products through Amazon in Europe and the Middle East face the same challenges that brands are facing world-wide–a lack of brand control and resources to succeed.

Trading problems are just one aspect of the challenges brands face as 1P sellers on Amazon. Learn more about these issues in the full Amazon Vendor Survey from 2022.

How to Avoid These Issues on Amazon

The good news about the trading challenges brand executives are facing as a 1P seller on Amazon is that they are all avoidable. In a 1P relationship, you’re constantly being forced to work around their erratic forecasts, limited communication, and changing priorities. But in a 3P partnership, you dictate inventory management, allowing you to stay in-stock, maintain control of forecasting, and plan for promotions or holidays.

With Pattern as your 3P accelerator, you can simplify forecasting and get inventory to the right place. You ship inventory to one of our warehouses, and we handle the rest—distribution across Amazon’s warehouse network for FBA, repackaging products into bundles, and delivering your orders on time.

Avoid the trading problems on Amazon by partnering with Pattern. Contact us. 

Discover more insights by downloading our annual Amazon Vendor Survey EMEA.

MAP Pricing vs MSRP: What's the Difference? (blog header)
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MAP Pricing vs. MSRP: What's the Difference?

“MAP” and “MSRP” are two of hundreds of acronyms floating around in the world of ecommerce, and they’re two of the easiest to confuse and misunderstand. While MAP and MSRP do play similar roles, they also have key differences that can work in tandem to support and protect your brand on marketplaces.

So what are MAP and MSRP and why do they matter? Here’s what you should know: 

What is MAP?

MAP (or minimum advertised price) is the minimum amount that a manufacturer or wholesaler recommends resellers advertise their products for. MAP pricing policy is essentially a one-way boundary you set to protect your brand, protect the margins of your resellers, and maintain fair competition across all of your distribution channels.

When setting a MAP policy strategy, remember the important things you’ll want your MAP policy to do are:

  1. Protect the interests of your brick-and-mortar resellers, giving them the margins they need to display and carry your product as well as sell it.

  2. Stay small enough that it discourages resellers from heavily discounting your products and keeps competition fair.

  3. Accurately reflects on the brand image and value you want to reflect.

“Advertising” and “recommends” are the key terms here. MAP policies should only recommend the price that is advertised online or in-store for a product, not attempt to fix the actual selling price of the product—that’s illegal—or recommend the actual selling price. That’s MSRP’s job.

Benefits of MAP

MAP not only keeps competition fair, but allows you to control your brand identity and promote consumer trust of your product and brand. Here are some of the benefits of having MAP policies:

  • Better brand protection and control

  • Creates a level playing field for retailers

  • Reduces bad customer experiences

  • Provides an accurate performance analysis

How Can Brands Effectively Enforce MAP?

It’s critical that MAP policies are structured in such a way that a brand avoids violating anti-trust laws. One way brands can effectively enforce MAP is by simply monitoring online product prices across digital channels to identify fluctuations in the market. 

At Pattern, we help brands not only develop a MAP policy, but also enforce it. Enforcing MAP policies and gaining marketplace control includes finding unauthorized sellers, which Pattern’s data finds. Once Pattern finds the unauthorized sellers, Vorys eControls (Pattern’s legal partner) steps in and handles the takedowns of unauthorized sellers, continuous enforcement of brand management, and reseller policy enforcements.

What is MSRP?

MSRP (or manufacturer’s suggested retail price) is how manufacturers standardize pricing across their resale channel and determine what price is fair for their product. The key difference between MSRP and MAP is that MSRP is the actual price manufacturers set and recommend retailers charge for their goods while MAP is the advertised price. 

MSRP doesn’t necessarily have to be the final price of a product—it’s most often a starting price—but it is determined by taking into account all of the costs associated with the distribution and manufacturing process for a product and the margin amount resellers need in order to make a profit. MSRP also establishes value. For example, if a brand wants to build a premium brand, the MSRP can reflect the actual or perceived value of their product.

Benefits of MSRP

Setting up an MSRP for your product includes the following benefits:

  • Maintains brand equity

  • Establishes brand and product value

  • Standardizes costs across marketplaces

How Can Brands Effectively Enforce MSRP?

Like MAP pricing, MSRP has to be set up as a one-way policy and not an agreement between a manufacturer and a reseller to avoid landing a manufacturer on the wrong side of the law. It’s a recommendation, not a contractual bind. As mentioned for MAP policy, Pattern helps brands effectively enforce MSRP with our proprietary data and expertise to protect their brand. 

How Do MAP and MSRP Work Together?

MAP and MSRP have different applications that may prove useful in different scenarios. For example, MAP policies are typically more useful in marketplaces where competition is fierce and price erosion happens easily if sellers are left unchecked. Ideally, however, MAP and MSRP are a dynamic duo that work together to serve the interests of your brand, support your resale channels, and protect your resellers.

Setting an MSRP establishes value for your product and lets your resellers know you’re serious about controlling channel conflict, maintaining pricing equity, and protecting their margins so they’re more confident setting pricing at the MSRP level.

MAP is the second half of setting a pricing policy. Setting a MAP price for your product, in addition to an MSRP, further standardizes pricing across your resale channel and gives legitimate resellers a fair environment to compete in while setting boundaries against unauthorized sellers harming your brand.

MAP combined with MSRP creates a stronger level of brand protection, giving your brand more sustainable, profitable growth.

Maintain Brand Control With Pattern

MAP policies can be tricky to draft, because there are so many legal lines to tiptoe around and so much nuance that goes into pricing. They can also be tricky to enforce without the right tools. At Pattern, partnered with Vorys, we have the tools and resources to help you maintain brand control on all marketplaces. 

As an ecommerce accelerator, Pattern can help you identify MAP violators and regain control of your brand online so that your image and your resellers are protected. To learn more, contact us today.

Athlon Optics Walmart.com Launch Has Record Setting Sales within 3 Days
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Athlon Optics Walmart.com Launch Has Record Setting Sales within 3 Days

Athlon Optics sells scopes and other optical accessories like binoculars for anyone who may be hunting, shooting recreationally, or competing.  After achieving significant success on Amazon, the brand wanted to launch on Walmart. As a growing marketplace with huge growth forecasts, Athlon saw their competitors already staking claim on walmart.com and saw opportunities for increasing their sales.

As a prestigious brand in its category, with loyal consumers, Athlon does so much with very few resources. With less than twenty employees in the entire company, managing everything from customer service to product development, their ecommerce team needed support to scale to a new marketplace.  And, they needed a partner who had a relationship with and deep understanding of walmart.com to accelerate their growth. Pattern is a one-stop shop for Athlon, providing the resources and expertise, so Athlon could also save budget and stop outsourcing so many different aspects of their marketplace business.

Athlon Optics Prepares for a Seamless Launch

Sometimes brands who transition from 1P to 3P with Pattern have no proprietary sales, marketplace data or content such as product images, video, or optimized copy. These circumstances create a more hands on transition for Pattern and may interfere with launch expectations. 

But Athlon was the consummate partner and overly prepared to transition to 3P– buttoned up, organized, and ready to take on walmart.com’s list of launch needs. Athlon provided all the required assets on time and was very organized.  The images were shot, formatted, and categorized as A+ content that Pattern ported over.  This process dramatically reduced wait times and lag times within the platform.  Plus, since the content was optimized for marketplaces, all images, copy, and listing information uploaded in the first pass. 

Pattern’s Walmart Expertise Leads to Success

But the content worked because of Pattern’s resources and marketplace expertise.  Pattern provided Athlon with a very clear outline of needs and expectations for seamless launch and this process has become a playbook for other brands on walmart.com.  The team’s mutual partnership and Pattern’s diligent follow up with and detailed attention to Walmart processes and logistics prevented Athlon from getting lost in the weeds. 

Three Days is All it Takes

The successful, thorough, and quick transition to 3P with Pattern secured Athlon most likely the fastest ramp-up periods for any brand on Walmart.com.  

Together we achieved success such as:

  • 'Best in class' turnaround–98% faster onboarding than average brand on Walmart.

  • First sale within the first week of landing at Walmart. 

    • Unprecedented turnaround considering the ramp up usually needed to gain momentum and traction with reviews on Walmart. 

  • Exceeded initial first month growth projection by 34%.

Athlon was so impressed by the ease and simplicity of its launch and execution on Walmart that the brand wants to grow our 3P relationship with other marketplaces such as Amazon Canada and Target+.

And, in the meantime, look out for Athlon Optics in Walmart Deal Days in 2022.  A huge win for any brand tied to organic advertising and new traffic opportunities across all media.

Pattern Helps Brands Expand Marketplaces 

Pattern has the 3P partner experience and deep expertise on Walmart and other global marketplaces to help a brand expand their footprint to maintain sales momentum and a competitive edge. Pattern, an ecommerce accelerator, takes on the responsibility of your stock and provides the expert resources needed to successfully launch and continue to grow your revenue on global marketplaces. 

Learn more about Pattern’s expertise and partnership on Walmart.  Contact us today.