Selling on an ecommerce platform can sometimes feel like a game of chess where being out-maneuvered can knock you out of the game. The most common way brands are out-maneuvered is via price.
On Amazon, third-party sellers are rewarded for offering low prices, and that often means they’ll undercut your pricing to get ahead. This behavior (called price erosion) makes it very difficult for other merchants to sell your product without eating into their own margins, and without proper checks on the sellers contributing to erosion, you may see your profits plummet. That’s what makes maintaining price stability on Amazon so important: it protects a brand’s margins and ultimately, the brand itself.
There are several things you can do to maintain price stability and regain control of your brand on Amazon. What works for one brand may not work as well for another, but these are five proven tactics that can help.
A MAP (Minimum Advertised Price) policy is a policy set by a manufacturer that tells resellers the lowest price they can advertise for that manufacturer’s products. MAP policies apply to _advertised _price and don’t limit the actual price a seller can set for a product. Brands set them to protect themselves from price erosion.
A good MAP policy outlines advertised price suggestions on specific products and the consequences for vendors who violate the policy (i.e. being banned from selling the product, having their account frozen). When effectively enforced, MAP policies incentivize third-party sellers to not undercut other sellers on cost, keeping pricing stable and giving other retailers a fair chance to sell a brand’s product in the market.
Note: before setting up a MAP policy, you’ll want to consult with a lawyer or legal team to ensure your brand doesn’t run afoul of antitrust laws.
Cutting the number of distributors selling your product can also help you maintain stability and take back control of your brand. Limiting your distribution allows you to more easily monitor where your product is being sold and at what price. It also helps you to retain authorized distributors who are following the rules while removing those who are not.
It may feel uncomfortable to cut off distributors, especially those you have developed a strong relationship with, but if a seller continues to violate your pricing policies, the harm done to your brand in the long-term by keeping them will be far greater than the harm done by cutting them out.
One reason why sellers may be undercutting your pricing on Amazon and creating instability is because your pricing is not as competitive as it should be in the first place. If your competitors are selling similar products at a noticeably lower price, it will be much harder for third-party sellers to move your product and more enticing for them to lower the price so that customers will have the incentive to purchase from them.
To find competitive pricing that works for your brand, conduct analysis on similar products across the market that can help you determine what prices make sense.
Often Amazon pricing is unstable because your products are being sold by unauthorized sellers who have no incentives to stop and no control. One way you can prevent this from happening is by enacting quality control policies or procedures.
An example of a quality control procedure is serialization. Stamping or printing each one of your products with a unique serial number allows your warehouse to track them more easily so you can identify leaks and ensure your customers are getting legitimate products. Serialization takes time and money, but it’s one way to protect your margins.
In order to get your pricing stable, you need to be aware of price drops, and the good news is there is plenty of technology available to help you monitor price shifts around the web. Chrome extensions like Honey and WikiBuy can help you compare a product across the web to other marketplaces. Extensions like Keepa can show you price fluctuations.
Another tech tool you can use is Predict. Predict is comprehensive, in-depth software that allows you to see data on MAP violations, how competitive your products are, and how much it’s costing you.
With the right tools and the right policies, you can stay on top of the game when it comes to price stability on Amazon. Read more about how to maintain prices on Amazon with our eBooks below, or contact a Pattern representative to learn how we enable our brands to gain pricing control on marketplaces.
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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.