January 25, 2019

Why Your Retail Partners Are Mad and What to Do About it

By Cassandra Shaffer / Brand Protection

For many businesses, teaming up with other retail partners is a win-win solution. When this works well, both companies benefit from increased revenue, customers, brand awareness, and sales.

Unfortunately, if business owners are not careful, they may find that their retail partners soon become resentful and disillusioned. This often happens when eCommerce brands partner with brick-and-mortar retailers, which have much higher overheads. These days, customers are increasingly savvy, and will often use their smartphones while in store- to ensure that they’re getting the best possible price.

price comparing online

If those customers can get a better price by ordering from you directly, or worse, by ordering through another one of your retail partners, it’s easy to see why this can damage your relationship with your partners. Customers will often demand the discounted price they’ve found online, or will simply order those products online (often while still standing in the brick-and-mortar store).

Unfortunately, customers tend to forget about the costs associated with running a brick-and-mortar store when they’re comparing prices among retailers. While these costs include everything from rent to utilities, brick-and-mortar stores are also investing in your brand with marketing, product displays, and sales training to help your products to sell. Compare this to many online resellers who typically make no such investment, and simply compete on price and price alone.

Ideally, you’ll prevent online sellers from undercutting your brick-and-mortar retail partners. This will prevent your retail partners from getting mad in the first place. You can do this by ensuring that you’re very selective about who exactly is selling your products. This means that you’ll often need to create a list of approved sellers who you can trust to stick to prices that don’t undercut you or your other partners and protect your brand.

If you sell your products on Amazon, one good way to do this is to join the Amazon brand registry. This helps protect your brand online since you have to give permission for other sellers to sell your product. And you can ask those sellers to sign a contract before they become an authorized seller of your products.

You can also protect your retail partners by setting and enforcing a MAP (Minimum Advertised Price) for each of your products. If you don’t do this, both Amazon and other online resellers can sell your products for any price they want- damaging your brand and creating a race to the bottom as other sellers also drop their prices in order to compete.

This price degradation is one of the biggest issues facing brands today. While there are many reasons to partner with other retailers, this requires careful consideration and selective distribution to ensure you have the control you need to keep all of your retail partners happy, protect your brand, and avoid the slippery slope that leads to CRaPped-Out products.

If your retail partners are already mad, it’s not too late to turn it all around. We can help you get better control of your prices, so you can improve your relationships with your retail partners and protect your brand. Get in touch today to learn how.

More Resources
Achieving Brand Control & Stopping Unauthorized Sales Online
Accelerate Your Marketplace Presence—Mercado Libre