How to Get in Control of Your Brand on Ecommerce

Cassandra Shaffer

May 26, 2020

Before marketplaces like Amazon became popular, brands were largely shielded from the consequences of channel practices. Brick and mortar stores could set their prices how they wanted and control distribution without many negative impacts. With the advent of online marketplaces platforms, everything changed, and brands were presented with a slew of new challenges.

One of those challenges is loss of control over product sales online. In an October 2019 webinar, industry professionals and experts at Pattern discussed the reasons why brands lose this control and how you as a seller can take it back.

Why do merchants lose control of their brands in online marketplaces?

Unauthorized sellers

John LeBaron, Chief Revenue Officer at Pattern, said unauthorized sellers and “bad actors,” (sellers unwilling to follow the rules) have a serious impact on brand control. One brand Pattern has worked with that carries products in the electronics category had over 1,000 third-party sellers on the marketplace at one point, he said, and as a result, very minimal compliance and high costs.

“They were spending about half a million dollars a month in these types of fees back to Best Buy because of the price erosion that they were facing and the price inconsistency on Amazon,” LeBaron said.

These kinds of impacts don’t just affect brands.

“It is your distributors, your downline sellers, your resellers that are being affected by some of these bad players as well,” LeBaron said.

Denise Zmuda is the Client Success Officer at Vorys eControl, where she helps brands with overall ecommerce practice strategy. Before Vorys, Zmuda was with Zebra Technologies, which worked with traditional channel partners to provide tech solutions and products. She said unauthorized sellers affected their relationship with their partners.

“With the anonymous third-party sellers that had come onto the marketplace and were securing products from gosh knows where, they really put a lot of downward pressure on pricing for the rest of our channel ecosystem, and it became very, very difficult for our more traditional channel partners,” Zmuda said.

Zmuda said customers would price compare with third-party sellers and then ask other resellers to match them. In one case, Zebra’s partners identified unauthorized third-parties were selling below their cost.

“That was really the impetus behind me saying, ‘enough is enough’,” Zmuda said.

Lack of rules and enforcement

Zmuda said lack of parameters on who could or couldn’t sell Zebra products on marketplaces was a big reason for their loss of control. Another was with the way they enforced MAP.

Zebra products weren’t being represented well online—the pricing packages were iffy and the listings and photography were poor. This impacted the reviews of their products’ and reflected negatively on their brand.

What can brands do to regain control?

Regaining control of your brand online can feel daunting, especially when there are lots of bad actors causing problems. Zech Hintz, president of Borderless Distribution, said there are some “shockingly easy” and creative things brands can do to regain control in the short-term, however.

**Product modification and differentiation **

Hintz said Borderless Distribution was selling a restoration kit users apply to a headlight to clean it. Due to the number of unauthorized resellers selling their kit, they were unable to get control of their product, so they made it a different product.

“Simply, we added a latex glove that you use to apply the product, and that automatically takes that item and turns it into a new ASIN or listing,” Hintz said. “All of a sudden, you have this product that no one really in the market has.”

Zmuda said Zebra took this approach for their brand as well, developing unique material differences in their products.

Hintz said unauthorized sellers won’t take the time to do differentials such as bundling products, adding a polybag, or a stamp of quality, which puts you in a good place to regain control of your product.

“If you just throw a little bit of ad dollars behind that, all of a sudden you’ve got your new listing that’s outperforming the previous one, and you’re basically killing the opportunity for anyone to sell on it,” Hintz said.

Selective distribution and quality control policies

According to George Hatch, Marketplace Director at Pattern, one of the more serious steps brands may need to take to regain control of their brand online is reassess their distribution agreements and see where they can become more selective.

“Brands need to figure out how to get their arms around distribution agreements, who’s allowed to sell where and when, and really create a playbook, in essence, as to who controls how the brand rolls out and who has authorization,” Hatch said.

One of the ways Zebra regained control was to consult with a legal team and enact quality control policies that allowed them to distinguish between authorized sellers of their product and those they didn’t know anything about. Zebra also picked a single authorized third-party seller.

“I’m a firm believer that for a particular category of product, you should have one seller, otherwise right out of the gate, you’re very over-distributed and sort of competing amongst yourself by having multiple sellers on such a vertical marketplace,” Zmuda said.

Challenges you might face

Cleaning up your market space can create some challenges. You may need to have difficult conversations with channel partners and even cut them off.

“We have brands that we work with that have some of their largest distributors that were leaking product and breaking some of their agreements, and so they made the hard decision to cut them off for 90 days,” Hintz said.

Though that experience wasn’t pleasant for the brand, it cleaned up 50% of the marketplace immediately.

“It’s hard to quantify at first, because it looks like a loss, but I think when you do the math correctly, in the sense that you’re looking at the bigger picture and what you’re actually losing, a sense of eroded prices or slender markets, you’re probably going to have a bigger win,” Hintz said.

How to begin

Zmuda said one of the first steps to implement changes is educate stakeholders on what’s happening so they see the problem. Zebra worked with an expert who pulled data on their company to show them what was happening. They learned from that data that they had 250 plus sellers representing their product who they’d never heard of before or who were selling their product anonymously. From that point, they were able to proceed with regaining control.

Brands like Pattern can supply buyers with the information they need to start regaining control of their brand. This includes details like how much of the Buy Box you’re losing, who you’re losing to, which third-party unauthorized sellers are undercutting your business, and where they’re getting profit.

To learn more about how you can take back brand control, contact us through the form below.

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Global Ecommerce: Weekly News (6th September 2022)
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Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)

Global Ecommerce: Weekly News (30th August 2022)
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Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)

Global Ecommerce: Weekly News (23rd August 2022)
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Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)