Why Having a Pricing Policy Matters & How You Can Create One

John LeBaron

May 6, 2020

According to a study by CNBC, nine out of ten consumers check the price of a product on Amazon as part of their product research. Consumers are constantly on the hunt for the lowest price they can find online, and while finding that low price may be a win for the consumer’s wallet, prices that are too low can have drastically negative effects on brands who don’t have effective pricing policies in place as part of their ecommerce growth strategy to protect themselves.

Why are pricing policies important?

They prevent price erosion

Price erosion happens when a brand is forced to lower their pricing in order to compete with unauthorized sellers listing products at low prices or sellers violating pricing policies.

Say, for example, that a small retailer lowers the price of a product they’re selling online and big sellers like Walmart or Amazon match that price in order to compete. Eventually, the small retailer may run out of inventory, and Walmart and Amazon will be left to compete with each other, each refusing to budge on price because they’re matching each other and thereby diminishing the price of the product. This is price erosion. See an example of price erosion below.

price policy ecommerce, price erosion, Pattern

Price erosion not only decreases the perceived value of your product, but it cuts into other re-sellers’ margins (many who have lots of overhead costs already, like paid staff, advertising, etc.) and therefore your own profits.

“What happens is if your resellers, the retailers you sell to, aren’t profitable, they’re just going to stop buying your products,” said Newel Cobb, Senior Brand Manager at Pattern.

Ben Craven, Corporate Counsel for Pattern, said that without a good pricing policy in place, resellers in a brand’s supply chain can “price at whatever level they want, and if the manufacturer doesn’t like that, there’s not really anything they can do.”

The best way to stop this, Craven and Cobb said, is having an effective pricing policy to ensure brand control.

“It protects all channels of distribution . . . and keeps brick and mortar retailers happy,” Craven said.

How do you create a pricing policy?

There are a few basic steps and things to consider when you’re beginning to draft an effective pricing policy for your brand.

Consult a lawyer

According to Cobb and Craven, the most important thing you’ll want to do before setting up a policy is to consult with a lawyer who has experience drafting pricing policies in the face of emerging ecommerce trends. This is a critical first step because you want your pricing policy to stay on the right side of antitrust laws, and that requires appropriate language that doesn’t create unfair competition or indicate any kind of collusion between your brand and a reseller.

One way collusion could be indicated is if your pricing policy reads like an agreement or negotiation between two parties instead of an announcement with suggested selling prices, according to Harvard Business Review.

“If a manufacturer is agreeing with its reseller what the MAP price will be, then that could look like price fixing,” Craven said.

Consulting with a legal expert can help you draft a comprehensive and unilateral pricing policy that includes clear guidance on what your brand permits or does not permit (such as free shipping, product bundling, etc.), who it applies to, what products it covers, and the consequences for resellers who violate your policy, all presented in such a way that your brand doesn’t run afoul of antitrust laws.

Set up a MAP policy

A MAP (Minimum Advertising Pricing) policy is a pricing policy set by a manufacturer that tells resellers and brands the lowest cost they can advertise or print for that manufacturer’s products. According to Cobb, brands creating a pricing policy should create a MAP policy to ensure their ecommerce growth.

MAP policies don’t limit the price at which products can be sold, but they do allow any retailer to have a fair chance at selling a manufacturer’s product in the market. When effectively enforced across the entire market, MAP prevents authorized ecommerce re-sellers from undercutting other sellers with unauthorized markdowns.

Aside from incorporating recommendations made by a legal counsel, there are a few things Cobb said MAP policies should do. One is to retain competitive pricing.

“You can lower MAP, you can raise MAP, etcetera, but if all of your competitors are selling their product at a significantly lower price, it doesn’t matter that your MAP is much higher. No customers are going to end up purchasing it to begin with,” Cobb said.

Brands may conduct analysis on similar products across the market to figure out what MAP pricing makes the most sense for them.

Another thing Cobb said MAP policies should include is specific guidance on warranties.

“If you have some kind of warranty, make it very clear that the warranty only exists with MAP,” Cobb said. “Somebody might buy a product and they might decide to sell it below MAP, but when they’re breaking MAP, they’re essentially going off-brand, which means they’re not an authorized reseller anymore, and if they’re not an authorized reseller anymore, any warranty that you would have had is no longer valid.”

Once your MAP policy has been created, it’s important to inform your resellers so they’re aware.

One thing to note is MAP pricing laws are only recognized in the U.S. and Canada, said Craven. MAP policies are still viewed as price fixing in the European Union, even if they’re unilateral.

Consult the data

One thing Craven says is beneficial for brands creating a pricing policy is knowing where their prices are being degraded, whether that’s Amazon, eBay, or elsewhere.

Pattern’s multi-channel ecommerce software Predict can provide that data to brand partners so they know exactly where the issues are at and who the culprits are.

ecommerce pricing software | Pattern

Make consequences clear and unilateral

According to Craven, brands should be “explicit” about what their MAP pricing is and that they have the right to terminate their relationships with resellers if MAP pricing is violated and decreasing brand control. The consequences of violations should be made clear to resellers and serious enough that they want to avoid violation.

It’s also important to enforce your pricing policy equally across all channels for all vendors, even if one of those vendors (like Amazon) is pulling in a majority of your sales. Differential treatment can not only violate antitrust laws but accelerate price erosion, making the cost of not enforcing your policy consistently far greater than the cost of cutting off a reseller.

“If you’re not willing to cut somebody off as a reseller, you have no power whatsoever. If they call your bluff and you say no, you’ve essentially just destroyed your MAP policy,” Cobb said.

One way brands might enforce their MAP policies is by setting up a non-appealable strike system that ends in termination for sellers who repeatedly violate pricing policies. This way resellers are given notice that continuing their behavior will lead to termination.

Be proactive in enforcement

“Once you have a pricing policy in place, it’s not enough to just have a policy in place. You have to be proactive in monitoring marketplaces to know where your issues are and then be active in enforcing your pricing policy,” Craven said.

According to a study conducted by the Harvard Business Review, unauthorized resellers violated policies about half the time and authorized resellers had a 20% violation rate. Without diligent attention to your resellers, violations can happen right under your nose, rendering your MAP policy useless.

Brands should carefully watch sellers so they can maintain the integrity of their brand and so their pricing policies can be as effective as possible.

What now?

Pattern provides brands with the tools to empower them to create and take control of their brand. We also connect you with valuable partners that can give you the resources you need to know where price erosion is happening.

For more information about how you can create your own pricing policy, contact Pattern below.

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Sept 29, 2022

How Pricing Changes on Walmart.com Affect Your Brand

Walmart.com has announced important changes regarding the “Was Price” and promotions on the digital marketplace. These updates make it more important than ever to optimize your price through implementing proper strategies, controlling your distribution channels, and being intentional about your pricing strategy.

And, as with all digital marketplaces, succeeding on Walmart.com requires performing well in all areas of The Ecommerce Equation. Which means as you optimize your listings’ pricing, as well as traffic, conversions, and availability, your revenue increases.

Pattern has the resources ecommerce brands need to optimize on marketplaces for each factor in the ecommerce equation. We have the technology and strategists to help you improve your traffic, the brand dedication and passion to help you achieve greater conversions, connections to econtrol specialists who help brands regain marketplace control, and the data you need to be able to make smart forecasting decisions for better product availability.

Below, we’ll cover how Walmart.com’s recent platform changes impact ecommerce brands’ ability to drive traffic and conversions for their products and how to strategize around them to work best in your brand’s favor. But first, let’s go over the changes themselves.

Walmart.com’s “Was Price” and Promotional Changes

Walmart.com’s newest changes reflect their mission to be the leader in low, everyday pricing. Therefore, Walmart’s customers come to the platform and expect low prices no matter what. Overall, these updates give consumers more visibility into the value they’re experiencing and hold brands more accountable in the pricing information they display.

Promotional Policy Changes

  • Due to Walmart’s updates, in order for your products to qualify for a strikethrough and show “Reduced Price” or “Clearance” flags on Walmart.com, your product’s promotion must be at least 10% off the “Was Price.” (Note: “Reduced Price” is the most common type of badging. Your teams can request this badge when filling out promotion upload files.) 

  • To specifically qualify for “Clearance,” the product needs to be discontinued and no longer replenished after selling through the remaining inventory.

  • Although “Rollback” is sometimes seen on site, it is a form of 1P-only badging.

  • Walmart now prohibits promotions lasting longer than 365 days.

“Was Price” Changes

  • Walmart’s “Was Price” was previously loosely defined and manually inputted on Walmart.com as an MSRP. Now, stricter rules are in place with regulations in the broader market to encourage enforcement and protect consumers. 

  • The “Was Price” is now defined by these terms on Walmart:

    • Either the 90-day median price paid by customers for the item on Walmart.com (excluding special promotions like holiday campaigns, limited time deals, rollbacks, and clearance);

    • Or the median price offered by Walmart or Marketplace sellers for the item on Walmart.com for at least 28 out of the last 90 days (excluding special promotions like holiday campaigns, limited time deals, rollbacks, and clearance).

How to Strategize for Success

1. Plan for Promotions Well in Advance

To protect your “Was Price” from price erosion, be intentional when planning promotions. To be most effective in your promotion, you’ll want to be able to give your customers a large enough discount to qualify for the slash-through and reduced price badging. 

Without the right pricing strategy in place, your products are in danger of falling into deeper and deeper discounting as you chase the ability to achieve slash-throughs and proper badging. Without the slash-throughs and badging, you’ll lose the ability to easily communicate the increased value of your product and the traffic and conversions you’re trying to earn by running the promotion in the first place. 

2. Keep Pricing Consistent

It’s important to keep your products’ prices as steady as possible to protect your promotion periods. As you prevent high-low price fluctuations, you’ll be able to use slash-through prices and promotional badges like “Reduced Price” and “Clearance” to your advantage in driving better traffic and conversions for your listings.

Without the ability to display badging, a promotion falls flat even if the price has been dropped. With steady pricing over time, you’ll be able to keep a stable “Was Price” and ultimately enjoy more rewarding promotional periods long-term.

3. Establish Excellent Brand Control

It’s important to remember that the “Was Price” policy also applies to 1P and other 3P sellers representing your products on Walmart.com. Unfortunately, your other strategies will be ineffective if other sellers are breaking your MAP policy or playing the high-low price game. So, it’s more important than ever for brands to be conscious of their distribution channels and keep rogue and unauthorized sellers in check.

Find Marketplace Confidence with Pattern

By allowing Pattern to be the authorized seller of your brand’s products and working with Vorys eControl law firm to eliminate rogue sellers, you can be confident in creating and executing a powerful  selling strategy on Walmart.com and other digital marketplaces. As a 3P seller partner, Pattern is truly invested in our partners’ success, we’ll help you to create and execute a strategy that truly prioritizes the long-term performance of your products on digital marketplaces.

Contact us today to learn more about the changes on Walmart.com and how you can optimize your performance.

Sept 29, 2022

How Global Soccer Scores with U.S. Shoppers

**How Soccer Leagues & FIFA World Cup Influence U.S. Consumer Demand** In this analysis, Pattern evaluates changes in U.S. consumer demand for soccer products. This report will help uncover: * When are soccer products in highest demand in the U.S.? * Major League Soccer vs. English Football League * Does the FIFA Club World Cup influence consumer demand? * Do FIFA World Cup group announcements impact consumer demand? * Which soccer player jerseys are the most popular among U.S. consumers? * North American players * South American players * European players * How ecommerce retailers can prepare for the World Cup and more The [FIFA World Cup](https://www.fifa.com/tournaments/mens/worldcup/qatar2022) is hosted every four years, and the next tournament will kick off on November 20, 2022. With soccer top-of-mind for many consumers, we thought it would be a great opportunity to evaluate how consumer demand is impacted by soccer events in the U.S., Europe, and globally. To help ecommerce retailers and social media strategists better meet their consumers’ preferences, we also analyzed which player jerseys were the most popular among U.S. Amazon shoppers. **When are Soccer Products in Highest Demand in the U.S.?** Unsurprisingly, consumer demand for soccer products appears to be highest when league-specific events are in play. What is interesting to note, however, is which leagues have the strongest influence on consumer demand. Despite what one may believe, it isn’t North American activity that drives the most demand for U.S. shoppers. **Major League Soccer vs. English Football League** In the U.S., Major League Soccer is the official league for soccer players. Similarly, the English Football League is the official league in the United Kingdom. When comparing change in U.S. consumer demand month over month from 2019 – 2022, we found some noteworthy behaviors. As can be seen in the 2019, 2020, and 2021 charts below, there are moderate increases in consumer demand for soccer balls and jerseys when the Major League Soccer season starts across all years: <iframe title="Change in U.S. Consumer Demand for Soccer Products in 2019" aria-label="Interactive line chart" id="datawrapper-chart-Y5KoK" src="https://datawrapper.dwcdn.net/Y5KoK/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> At the start of the Major League Soccer season in 2019, demand for soccer cleats rose by 43%, demand for soccer balls rose by 38%, and demand for soccer jerseys rose by 28% compared to the month prior. <iframe title="Change in U.S. Consumer Demand for Soccer Products in 2020" aria-label="Interactive line chart" id="datawrapper-chart-byv7E" src="https://datawrapper.dwcdn.net/byv7E/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> Again, at the beginning of the Major League Soccer season in 2020, demand for soccer balls rose by 28%. During this same period, however, interest in soccer cleats and soccer jerseys fell by 46% and 38%, respectively. This is likely due to the fact that the Major League Soccer season’s 2020 start date nearly coincided with the formal announcement of the COVID-19 pandemic. <iframe title="Change in U.S. Consumer Demand for Soccer Products in 2021" aria-label="Interactive line chart" id="datawrapper-chart-cBDJT" src="https://datawrapper.dwcdn.net/cBDJT/4/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> In 2021, the start of the Major League Soccer season in the U.S. saw a 46% increase in demand for soccer balls and 16% increase in demand for soccer jerseys. However, demand for soccer cleats fell by 24% during this same period. While moderate changes can be observed each year at the start of the Major League Soccer season, even more significant increases can be seen when the English Football League season commences. Here’s how consumer demand was impacted across all three years at the start of the English Foot League season: * **2019:** 47% increase in demand for soccer cleats; 0% increase in demand for soccer balls; 10% decrease in demand for soccer jerseys * **2020:** 54% increase in demand for soccer cleats; 47% increase in demand for soccer balls; 19% increase in demand for soccer jerseys * **2021:** 66% increase in demand for soccer cleats; 38% increase in demand for soccer balls; 40% increase in demand for soccer jerseys Except for 2019, consumer demand for soccer products in all three categories was higher at the start of the English Football League season than at the beginning of the Major League Soccer season. This suggests consumers are more closely following the English soccer season than the American league. **Does the FIFA Club World Cup Influence Consumer Demand?** As aforementioned, the FIFA World Cup occurs once every four years. However, the [FIFA Club World Cup](https://www.fifa.com/tournaments/mens/clubworldcup) is held every year. In 2020, the FIFA Club World Cup was originally planned for December; however, this got postponed until February 2021. As we can observe in the graph below, demand across all three soccer product categories reached their peak for the year during this time: <iframe title="Change in U.S. Consumer Demand for Soccer Products in 2021" aria-label="Interactive line chart" id="datawrapper-chart-cBDJT" src="https://datawrapper.dwcdn.net/cBDJT/4/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> This same trend was not observed during the 2019 FIFA Club World Cup tournament. During the timeframe of the tournament from December 11 – 21, 2019, demand across all three soccer product categories was relatively low: <iframe title="Seasonal Change in U.S. Consumer Demand for Soccer Products in 2019" aria-label="Interactive line chart" id="datawrapper-chart-d4ECO" src="https://datawrapper.dwcdn.net/d4ECO/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> Several factors could explain why consumer demand increased coinciding with the 2021 FIFA Club World Cup compared to the 2019 tournament, including: * **Pandemic Worries:** While the global pandemic was not officially announced until March 11, 2020, initial reports on the coronavirus outbreak began in December 2019. Consumers may have been less interested in recreational activities and more focused on the emerging updates coming out of Wuhan, China. * **Tournament Planning:** The 2019 FIFA Club World Cup was formally announced on September 30, 2019 (only about two months from the tournament start date). By contrast, the 2021 tournament was announced in September 2020, originally slated for December 2020, and finally postponed until February 2021. The added anticipation and game delay could have contributed to more buzz around the tournament. * **Seasonality:** Since December marks the height of the basketball season in the U.S., consumers were likely more focused on basketball-related events than on soccer. This could also explain why more consumers were interested in soccer products during the FIFA Club World Cup in 2021 than in 2019. **Do FIFA World Cup Group Announcements Impact Consumer Demand?** We were able to take a look at how U.S. consumer demand changed following the 2022 FIFA World Cup group announcement. As it turns out, U.S. consumers actually experienced decreased demand following the announcement on April 1, 2022: <iframe title="Change in U.S. Consumer Demand for Soccer Products in 2022" aria-label="Interactive line chart" id="datawrapper-chart-lX0B6" src="https://datawrapper.dwcdn.net/lX0B6/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> Since the FIFA World Cup announcement coincided with the end of March Madness and the start of the 2022 National Basketball Association playoffs, this could explain the decreased demand in soccer products among U.S. consumers. **Which Soccer Player Jerseys are the Most Popular?** Our team wanted to see which soccer player jerseys were most popular among U.S. consumers. To find this, we compiled a list of the most searched-for players in North America, South America, and Europe. From there, we tallied up all the searches in each category for all players from 2019 – 2022. Then, we compared the total searches for each individual player to the total for all players in their category. **North American Players** When it comes to soccer player preference for North American players, U.S. consumers have a clear favorite. According to our data, 95% of all searches for North American player-specific soccer jerseys between 2019 – 2022 were for American soccer player, Christian Pulisic. <iframe title="U.S. Consumer Demand for U.S. Soccer Team Member Jerseys 2019 – 2022" aria-label="Bar Chart" id="datawrapper-chart-fBlO2" src="https://datawrapper.dwcdn.net/fBlO2/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="255"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> While Pulisic is an attacking midfielder/winger for the United States national team, he currently plays for the Premier League club Chelsea in the United Kingdom. Since U.S. consumer demand for soccer jerseys is highest at the start of the English Football League season, this could explain Pulisic’s extreme popularity among U.S. shoppers. **South American Players** Consumer preference for South American players is a little less cut-and-dry; however, there is still a clear winner in the category. It turns out that most U.S. consumers (49%) prefer to support Lionel Andrés Messi of Argentina when it comes to South American soccer jerseys. Since many of these players also play in Europe, it makes sense that U.S. shoppers would be more interested in their jerseys than in U.S.-based players: <iframe title="U.S. Consumer Demand for South American Soccer Team Member Jerseys 2019 – 2022" aria-label="Bar Chart" id="datawrapper-chart-0dK9s" src="https://datawrapper.dwcdn.net/0dK9s/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="255"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **European Players** When observing the top searched-for European players, we were surprised to see that no players from the English Football League appeared at the top. However, there was a clear favorite again in this category for U.S. consumers: Kylian Mbappé. With 88% of total searches for European players, Mbappé’s popularity among U.S. consumers is undeniable: <iframe title="U.S. Consumer Demand for European Soccer Team Member Jerseys 2019 – 2022" aria-label="Bar Chart" id="datawrapper-chart-cIRiH" src="https://datawrapper.dwcdn.net/cIRiH/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="279"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **How Ecommerce Retailers Can Prepare for the World Cup & More** Understanding how U.S. consumers follow and respond to soccer leagues, both nationally and internationally, is essential for ecommerce retailers to anticipate and satisfy changes in demand. Using this data, online sporting retailers now understand the relationship between higher consumer demand for soccer products and gear to the start of the English Football League season. Empowered with this information, they can plan their supply chain and marketing calendars more effectively, ensuring all inventory, advertising, and customer support needs are met. Here are the top takeaways ecommerce retailers should prepare for based on our knowledge: * While demand is higher during the English Football League season start than the Major League Soccer season start, demand for soccer products is higher than the seasonal average at both times, so prepare accordingly. * The top three most popular soccer player jerseys among U.S. consumers are for Christian Pulisic, Kylian Mbappé, and Lionel Andrés Messi. * The FIFA Club World Cup may also have an impact on soccer product sales, so it’s a good idea to ensure products are well-stocked during this time each year. **If you’re interested in uncovering more data like this to empower your ecommerce strategy, [request a demo](https://pattern.com/contact-us/) from Pattern today!**
Sept 27, 2022

Leslie Hensell Key Takeaways: Taking Charge of Your Amazon Strategy

Pattern’s Accelerate22 event, the global ecommerce acceleration summit, provided a way for participants to learn from each other and leading experts about building a successful ecommerce presence. During our Brand Control and Compliance track, Leslie Hensell, co-founder of Riverbend Consulting and an Amazon expert, spoke to attendees about “Bezophobia”—the fear of losing brand control on Amazon. She talked about the importance of having a clear strategy to help you perform your best on the digital marketplace and the fact that achieving that is much harder to do in a 1P Amazon relationship.

With better control, which is more achievable in a 3P relationship, brands can let go of their fears and more richly enjoy the inherent benefits of selling on Amazon. If you think you could have a case of Bezophobia, read below for three important areas every brand should have control over when selling on Amazon.

Prioritize Consistent Pricing

Pricing is a huge concern for brands selling on Amazon—in most cases, Amazon prioritizes their customers’ happiness and providing a great experience for them on the platform over brands’ best interests. So, they want to offer their customers the best price available at all times. 

This seems harmless enough until a rogue or unauthorized seller enters the ecommerce space. They’d like to capture your consumers’ interest as well, and often list your products at a lower price than you’d authorize. When Amazon notices the change, whether on its platform or on another, they drop your listing price to match. 

Many brands seriously struggle to raise their prices after events like this occur, leading to what we call the Profitability Death Spiral. As your product prices fall, it’ll be harder and harder to raise them again, especially if you’re operating with Amazon as a 1P seller.

At Pattern, we know brands can’t achieve marketplace acceleration without brand control. So, we partner with econtrol firm VORYs to allow all brand partners to better understand their distribution channels and how to address control problems that ultimately lead to pricing issues.

Gain Total Visibility into Product Selection

The next key area of control brands should be focused on is their product selection on Amazon. Leslie spoke about this being a common issue for brands—as mentioned above, Amazon doesn’t see your brand as its top priority.

Many brands provide a certain assortment of their products to Amazon to sell, then find that their expectations don’t match Amazon’s efforts. Leslie has worked with many brands that have believed that Amazon will list, market, and move product the way a brand would if they were managing their Amazon presence themselves. 

But, in a 1P relationship, it’s difficult to get true visibility into what’s really going on. If Amazon buys your products without putting the effort in to represent your product selection in the way you think, it can cause big, long-term issues that are very difficult for brands to reconcile.

Marketing and Advertising

In Leslie’s experience, this is a brand’s most important area to have control over on Amazon. Your ability to sell products is completely dependent on how you’re able to showcase those products through your content. And, in a 1P relationship, brands lose the ability to have the final say over how their products appear to consumers. 

Leslie has seen many cases of brands’ sales dropping inexplicably, only for them to discover that their vendor has made significant changes to product detail pages and other marketing materials, such that they no longer reflect the brand.

Pattern understands how important your brand representation is on digital marketplaces like Amazon. So, when we agree to partner with brands, we provide a suite of creative services to help your products look their best, including a studio team for fully-optimized pictures and videos and an expert advertising team that knows how to write descriptions and copy that really help your products stand out among the competition.

Achieve True Brand Control with Pattern

If you’re able to get ahead and get in control of your Amazon strategy, especially in your pricing, selection, and marketing efforts, you have no need to fear the digital marketplace. As an Amazon expert and ecommerce accelerator, Pattern knows what it takes for brands to truly succeed, and is committed to helping all brands take charge of their strategy to achieve long-term success.

Set up a call to talk more about Amazon and ways Pattern can help you make the platform work better for you.