If you’ve lost control of unauthorized retailers selling your products on Amazon, you’ve probably had a few, “Oh, crap!” moments—although, “Oh, CRaP!” would probably be more accurate.
CRaP isn’t just the snarky Amazon acronym for “Can’t Realize a Profit.” CRaP has real implications for manufacturers who do business on the ecommerce giant’s platform. So, how do you sell an unsellable product? How do you avoid products CRaPping out?
Pattern’s here to walk you through your ecommerce strategy when your unsellable products have CRaPped Out.
What’s CRaP, really?
Essentially, CRaP products don’t make Amazon enough money and are therefore deemed as unsellable products. They’re usually low-cost, high-weight products that don’t ship well (shipping is one of Amazon’s largest costs).
CRaP products also tend to have prices that are in constant flux because of deal-matching across ecommerce sites. Amazon will match the low price, other ecommerce sites will lower it again, Amazon matches it again, and suddenly the product is unprofitable (to Amazon and to the brand), said Whitney Gibson, Pattern’s Lead Enforcement Partner at Vorys.
“Amazon declares, ‘It’s not even worth going to further price concessions. We’re in a state where we can’t even make a profit off this, we don’t even want to sell it for you.’ And so it stops purchasing the product from the manufacturer and now the manufacturer is stuck with not being able to achieve the sales it wants on Amazon,” Gibson said.
When CRaPp happens, Amazon reacts in a number of ways to save its own margin (much to the manufacturer’s chagrin).
Amazon won’t help CRaPped out products sell.
Normally, Amazon wants to help brands sell their stuff; they win when brands win. But when a product is CRaPped out, Amazon doesn’t want to lose any more money on it by continuing to sell and promote the product.
The listing still stays active on Amazon (being sold by third-party sellers), but Amazon no longer sources that product and loses money, said Garrett Bluhm, Pattern’s former VP of eCommerce.
“Oftentimes the prices will go up on that product, and if that happens, oftentimes Amazon suppresses those Buy Boxes so it becomes a little bit more challenging to actually purchase those products,” Bluhm said.
Eventually, Amazon drops CRaP products. (!)
Yep. It really could be as bad as that sounds—if you have CRaPped out, unsellable products and don’t take action, that is. When a product stops making sense for Amazon to sell, they’ll drop it completely, thereby destroying your ecommerce strategy.
“In summary, a CRaPped out product is when Amazon comes to the brand and says, ‘We can’t make a profit from selling this product anymore and so we’re not going to carry it for you anymore,’” Gibson said.
Yikes. However, not all is lost. There’s quite a bit you can do to prevent “Oh, CRaP” moments, (although that’s a blog post for another time).
One of the best things you can do is to enforce MAP (Minimum Advertised Pricing). Through our partnership with Vorys, you can get your sellers MAP compliant and avoid the dynamic pricing that eventually leads to CRaP. Talk with us by filling out the form below to learn more.