Brands work hard to set up many points of distribution (big box, wholesale, specialty, boutique, distributor, unauthorized sellers, et al.), which they are incentivized to do in order to maximize revenue. But wide distribution offline causes challenges on Amazon and could lead to price erosion and unhealthy marketplace competition.
Pattern is an ecommerce accelerator who knows how to stop this death spiral. We partner with brands to identify, develop, and control their distribution strategy to drive marketplace success on Amazon and beyond.
Let’s focus on how to optimize your retail distribution to achieve control on Amazon.
Many times the goal in retail is to get your products in as many stores as possible. This is wide distribution. Narrow distribution means fewer overall sellers who adhere to specific pricing policies and promotions. In narrow distribution, a brand separates all sellers geographically in order to take control and increase profitability.
But why is narrow better than wide distribution, which is generally the strategy for brick and mortar—more placement means more eyeballs, which means more sales, right? Not necessarily, it means more price competition.
As an example, take a car brand, say Honda. Honda puts all of its dealers in one town on one block. A buyer starts at Dealer A and gets a quote. Then the buyer continues down the block to Dealer B, Dealer C and onward, simply asking, “How much?” The dealers keep undercutting each other to win the sale, reducing any profitability. Sold.
In wide distribution, where everyone competes on price, the buyer wins.
Wide distribution also backfires online where customers have full price transparency on all marketplaces. How many times have you been shopping online but before clicking “buy” did a quick search to price compare?
Just like our Honda example, the only thing marketplace sellers have to compete on is price, creating an automatic incentive to lower the price just slightly to win sales and accidentally start the price erosion waterfall. In the digital landscape, if one seller lowers their price online, another will always match that price, so a brand must implement narrow distribution to avoid losing sales and driving down price on all marketplaces, like Amazon.
In retail, you want to go wide, but on Amazon you want to optimize for one seller. Amazon optimizes for a one seller approach by giving them control of the Buy Box. The seller wins the Buy Box by winning the Amazon algorithm which, among other things, is a combination of price, consumer reviews, and customer service.
Pattern works with brands to create and execute a narrow retail strategy on Amazon and other marketplaces so brands can identify the primary seller, who will win the Buy Box, as well as control other sellers.
Contact Us today and learn more about narrow distribution with a 3P accelerator on Amazon.
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.