Direct sales (or multi-level marketing) comes with a set of unique and often frustrating challenges that other retail brands or companies don’t experience. As a direct sales company, you need to figure out how to grab the attention of potential distributors and successfully pitch your business model to them so your products have more pipelines to move from point A to point B. Your direct selling strategy can’t be to wait for consumers or distributors to come to you. There are myriad moving parts.
Perhaps the biggest challenge that direct sellers face today is competing in an omni-channel ecommerce landscape with marketplace giants like Amazon or Walmart. Not only are these big fish in the retail pond, they can be a big threat to your direct sales strategy. Play the game right, however, and you can steadily grow your distribution channels without being disrupted by other marketplaces.
Gone are the days when your brand could sleep easy at night without ecommerce channels undermining brand control beneath your nose, and gone are the days when selling through your downlines was the most effective way to grow. Marketplaces have made both much more difficult, and one of the biggest reasons is that they’re an easy solution for your distributors trying to make a sale.
Let’s say a company is carrying a new hair product, and they choose to take the direct seller route to market. They’ll sell their product wholesale to a distributor, who in turn will sell that product at the retail price to people in their circle of influence who are interested in improving their hair care routine. They may do this by hosting product parties or making grassroots contact with friends and family. This not only helps the brand grow; it also helps that distributor rise in the ranks until they’re eventually able to make a tidy profit and have more incentives to sell.
While some distributors might do everything the right way and excel at hitting their sales goals, others may struggle and seek out alternative methods to move products and support their business. An easy solution? Taking products to ecommerce marketplaces.
To sell or get rid of their products, a distributor—and even some of a brand’s customers—will gravitate toward Amazon, or other online channels, where they can make a business storefront, list the product, and sell it there rather than through slower traditional marketing methods. Sometimes to compete in this space and make the sale, the rogue distributor will drop the price down. That single unauthorized action is a trigger that complicates the entire market and makes selling much harder for the distributors doing it the right way.
Customers who are interested will go to Amazon, find the product listed for less, and choose to purchase it there with no incentive to buy it from anyone else at the higher, but normal, price point. The brand’s other distributors, in turn, will not be able to compete unless they markdown the cost of their own inventory.
Soon, that company is fielding complaints that the online price is too low and the rest of their distributors can’t make a profit selling their inventory unless they get it from the company for less. If that company marks down wholesale prices, they lose margin. If they don’t, they start losing distributors. In one fell swoop, that company’s downline, its upline, and the entire brand at large takes a hit, all because they didn’t have a strategy to take control and stop unauthorized practices on Amazon.
The fact is, if you aren’t putting your products on Amazon, somebody else is, and they’re likely doing a worse job than you would. You don’t want to be the brand that has no control of the direct sales strategy because it allowed distributors and third parties to dictate its marketplace presence and prices.
Lack of control and price erosion across channels aren’t the only business costs of not being on Amazon. The truth is that direct sales strategies are getting trickier to do via traditional methods—that’s why brands are turning to influencer marketing to sell their products. Social media and marketplaces make up a big chunk of the market. Leaving it up to distributors and their circles of influence alone to get the word out means your product is unavailable to a large segment of consumers, and fewer consumers means fewer sales.
In order to change that, you need to have control online, and you need to have a presence on marketplaces. This opens the door to big sales opportunities that can help your brand grow in exciting ways without harming your distributors. That’s not something you should miss out on.
At Pattern, we’re marketplace experts, and we also understand the direct selling space better than any other partner you can find. Our people have the tools, data, and know-how to help you get your brand under control on marketplaces.
The Amazon market is complex with lots of moving parts, as is the media pointing to the market. Our Pattern experts work in close collaboration with your brand to help you establish a powerful and personal ecommerce presence and direct sales strategy that reflects your brand image and has messaging congruent with your overall brand strategies. We help you create clean and beautiful listings, capitalize on the right marketing keywords to increase conversions and retain control of the Buy Box, and identify third-party sellers who are undermining your sales in an unauthorized way to prevent price erosion. We also provide data to help you set optimal pricing and control policies among your distributors.
Another benefit of working with Pattern to get control of your brand on ecommerce is that you’re able to give your distributors more breathing room. Having a presence on Amazon and establishing rules for control gives your distributors more freedom and opportunity to sell there, too. Instead of just their immediate circle of influence, they’ll have their friends and family plus all of Amazon’s consumers to sell to. This strengthens your brand’s relationship with the independent sales reps putting in the work to help it succeed, and it ultimately helps you reach a wider audience.
Last but not least, Pattern not only helps you optimize your current efforts for success, but also helps to identify international marketplace opportunities to expand into. And, of course, we’ll be with you every step of the way, applying our same proven methodologies in every new region we tackle together.
To learn more about what a Pattern partnership can do for your brand’s direct sales strategy, contact us today.
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Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.
If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.
At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.
Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.
DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.
Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.
Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.
So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.
Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.
So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.
As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.
The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).
As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter.
It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.
Set up a call to get your international expansion strategy in motion.