At Pattern, we are constantly executing research and data analysis to better understand brand’s performance and experience on Amazon. Our latest research uncovered common pain points faced by brands selling on Amazon in Europe and the Middle East. Through our annual Amazon Vendor survey, we dug into the challenges CEOs face to maintain brand protection on Amazon. The issues transcend borders and challenges for CEOs revolve around two pain points: lack of marketplace control and lack of profitable ecommerce growth.
Here are the top pain points from our research:
Lack of Marketplace Control
Part of protecting your brand on Amazon is making sure you have marketplace control such as determining pricing and eliminating unauthorised sellers. Brand CEOs identified four areas in which they are losing marketplace control:
1. Dealing with Price Erosion
Of the brand CEOs who took the survey, dealing with price erosion was found to be the top common pain point CEOs are facing. Over 80% of respondents found dealing with price erosion to be painful, 37% of which found it to be extremely painful.
Price erosion impacts price and performance in all channels. 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. Ensuring price consistency is key to success.
2. Too Many Competing Third Party Sellers
67% of respondents mentioned having too many competing third party sellers as a pain point to protect their brand on Amazon. This creates issues for a brand because when a third party sells your product on Amazon, the sale isn’t credited to your brand. And usually, a third party has no interest in protecting or preserving your brand.
One way to defeat the competition of third party sellers is to ensure you win the Buy Box on Amazon by stabilising your prices and controlling your inventory.
3. Unfavourable Commercial Terms
67% of respondents said that unfavourable commercial terms are a pain point of protecting their brand on Amazon. Some of the unfavourable commercial terms brand CEOs face on Amazon include AVN negotiations, hidden costs of Amazon, and operational fees such as vendor flex, charge backs, and shortage claims. Payment for various support levels, such as special vendor services, along with the other unfavourable commercial terms, leads to a negative knock-on effect for the rest of the brand’s business–retail, brick and mortar, D2C, etc.
4. Outdated Stock Being Sold by Third Party Sellers
Sometimes third party sellers can get a hold of your outdated stock and sell it on Amazon. Not only are these sales never accredited to your brand, but your brand equity is at stake. The outdated stock being sold may not represent your current brand and theme, leading to brand acknowledgment and trust issues. 7% of respondents said that outdated stock being sold by third party sellers is extremely painful, and 13% said it was quite painful.
Lack of Profitable Ecommerce Growth
According to our ecommerce equation, traffic, conversion, price, and availability are key components to revenue performance and ecommerce growth. Achieving profitable ecommerce growth on Amazon can be difficult to achieve with these pain points in the way:
1. Difficulty Forecasting Sales
Difficulty forecasting sales was mentioned as the second-most pain point CEOs face on Amazon, with 77% of respondents saying it was extremely, quite, or somewhat painful. Without the right data and technology, forecasting sales and inventory demand is a guessing game.
Entering new marketplaces such as Amazon in Europe and the Middle East, or trying to build your brand within those regions, calls for in-depth analysis and data around each: customer preferences, inventory demand, and shipping logistics. Forecasting sales and meeting consumer demand is essential to a successful Amazon marketplace experience.
2. Products Not Realising Profits
68% of respondents found this to be extremely, quite painful, or somewhat painful. A brand should always review their product before listing them on Amazon to make sure they have a good chance of being profitable for both your business and Amazon.
CRaP (Can’t Realise a Profit) items on Amazon aren’t featured on personalised fees, advertisements, or recommended products, leading to a decrease in sales. Over time, Amazon stops ordering these products for their vendor partners.
Pattern Protects Brands
As a 3P partner on Amazon, Pattern helps brands gain control and protect their brand on Amazon worldwide. We take care of every aspect of your Amazon presence, which, as indicated by our survey results, spans everything from brand control to listing optimization and customer support.
Identifying an Amazon business model that generates profitable growth is of increasing importance for brands as the marketplace continues to grow across Europe and the Middle East. As data fanatics at Pattern, we provide all the information necessary for brands selling on Amazon in Europe and Middle East to perfect their Amazon strategy and drive revenue.
Protect your brand with Pattern’s resources and technology. Contact us.
Get more insights by downloading our annual Amazon Vendor Survey EMEA.