As an investor for an ecommerce brand, your topline is at the top of your mind. You want your investment to flourish and pay rich dividends, so you may reasonably approach it with a growth-first strategy, funneling in ad dollars and watching sales closely.
While growth is an important focus, there are some negative implications of having a growth-first strategy. Your brand might be losing control online while your back is turned, and without regaining that control, the positives of growth can quickly be negated, wasting your money and harming your brand.
In order to both grow your investment and help your brand thrive, brand control should be on your radar.
Caring about brand control begins with understanding the full impact of Amazon. Scott Chandler, Head of Partnerships at Pattern, said most peoples’ understanding of Amazon is fairly limited, including investors’.
“In their mind, without the full context, Amazon is just analogous to any other sales channel,” Chandler said. “In any other sales channel, they walk in and they’re like, ‘Hey, do you want to buy our product and negotiate on a whole sale price,’ and they’re done. Maybe in some retail cases, they have to negotiate shelf space and a few other things.”
Amazon, in contrast, is a whole different ball game, one with different rules and damaging penalties for slipping up. Unlike other channels, Amazon creates visibility that can shine light on all of your transgressions for your customers and other distributors to see.
“Everyone kind of gets a sense of what your profitability is or if you’re overinflating your margins. Do you cut one deal with one channel and . . . a different deal with another?” Chandler said.
Using Amazon listings and pricing as a reference for the rest of the market, consumers can easily determine if your brand is one they can trust or one they should avoid.
“It’s more than just a sales channel, because it has a spillover effect into all of your other business,” Chandler said.
When unauthorized sellers list a brand’s product for cheap and erode pricing, and when third-party sellers poorly represent brands with their Amazon listings, it’s a result of little to no control, and it doesn’t just impact the way a brand is perceived across channels, but it hurts a brand’s relationships with other sellers, including brick-and-mortar sellers.
If an investor wants to sell their product through a retailer like Target, but buyers are using Amazon data against them, Target may look at that and lose interest in stocking the product on their shelves, Chandler said. Furthermore, vendors that can’t sell a brand’s product because grey market sellers are undercutting them on price won’t want to work with that brand either.
Another thing lack of brand control can do to you as an investor is render any money you spend on advertising almost worthless. Chandler explains.
“Let’s say I’m an investor and I want to throw money at advertising and try to grow it. Well, it’s kind of like a blind auction behind the scenes of who owns the Buy Box. Who owns the Buy Box is generally whoever has the lowest price, so me as an investor, do I want to throw advertising dollars knowing that that sale would likely get attributed to the person who’s creating my biggest problems? It’s a disincentive to actually advertise and grow, because it’s fueling the flywheel of the problem here.”
Until you remove the problem, get your pricing back to where you want it to be, and regain control, Chandler said, “It’s probably not a good idea to exacerbate the problem with a bunch of ad spend.”
“Proper control allows you to have wins or win across all channels as opposed to winning in one, but having that then hurt you somewhere else,” Chandler said.
Proper brand control on ecommerce can help you demonstrate that you’re clean and your strategy is retailer friendly. It can help you hold on to a couple points of margin in your negotiation and protect your brand from harmful players. It can also help your brand to not only grow but thrive.
One brand in particular that has found big wins after regaining control is Pure Encapsulations, a company that sells dietary supplements. According to Chandler, Pure was selling a supplement product to practitioners solely through doctor’s offices, but soon practitioners stopped buying the product from those offices because it was being sold at a significant discount on Amazon by grey-market distributors. Pure learned that some of the doctors who had been purchasing the product were reselling it without authorization, putting their entire business model at risk.
Pure came to Pattern asking for help cleaning up their account. Within months, Pattern helped Pure remove 215 unauthorized sellers, increase MAP compliance to 98%, and give them the peace of mind to again focus on growth. According to Chandler, they’ll make over $100 million in sales in 2020.
Paying close attention to brand control has particular payoffs for you as an investor while you’re in a partnership with an ecommerce company and on your way out.
“All this rolls up into a nice exit strategy that you can use in your negotiations on evaluation with the company,” Chandler said.
It gives those who follow you a win instead of a mess.
Before partnering with a brand, Chandler said investors should evaluate that brand’s Amazon presence to see how much cleanup, if any, will need to be done. You should look at things like how many dollars a brand has, and are they selling directly to Amazon or going through a third-party strategy?
Another thing to look at is a brand’s policies.
“If I were an investor, I think I’d want to review what their MAP policies are. Do they have MAP policies? Do those MAP policies contain ecommerce verbiage and then are they enforcing against it?” Chandler said.
Investors should know if a brand knows which unauthorized sellers are moving their product online and what they’re doing about it. If there are significant control or distribution problems, investors should be proactive and step in.
“I think I would sit down with their executive team and say, ‘How willing are you to cut off a good retail customer who could be creating these problems for you on Amazon?’” Chandler said.
Software like Pattern’s Predict software can help your brand see detailed data about where and how extensive the problem is so they can move forward in preventing it.
To learn more about brand control and strategies to regain it for your brand, contact Pattern through the form below.
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If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.
Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.
At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead.
An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.
A great Amazon SEO Agency partner will:
Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance.
Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS.
To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.
A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.
It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.
Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins.
Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.
As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.
Contact us to learn more about our SEO optimization services.
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.