Why Having Multiple 3P Sellers Kills an Ecommerce Advertising Strategy

Tony Morales

January 27, 2021

Advertising is the ticket to making more ecommerce sales, but what many brands don’t realize is that the effectiveness of their advertising can be hampered by the number of sellers they have distributing their product online.

Having more sellers might seem like an easy way to raise awareness of your brand across a myriad of different markets. This may have some truth in brick-and-mortar settings, but online the truth is that the more sellers you have, the more harm it does to your advertising strategy. Multiple 3P sellers aren’t your secret weapon for making sales, at least not for long. They’re one of the biggest obstacles stopping your brand from growing long-term.

Why multiple 3P sellers are bad for ad strategy

Having multiple 3P sellers might make sense from an advertising perspective when you initially think about it—the more sellers you have distributing your product, the more far-reaching your brand and therefore, the higher your revenue, right? Not quite. It’s far less idyllic than that. The reality is that multiple 3P sellers can corrode your brand’s longevity right under your nose, harming your pricing and, more to the point, wrecking your advertising in the process.

Having multiple 3P sellers harms your ad strategy in five primary areas:

  1. Conversion rate
  2. Buy Box ownership
  3. Cohesiveness
  4. Ad bids
  5. Pricing

1. Multiple 3P sellers harm your conversion rate

Your product listings are, in many ways, the face of your brand. How they look directly impacts your conversion rate, and since converting traffic to sales is your goal as a business, it’s really important that your listings look sharp. To keep them looking sharp, you have to stop ceding control to so many 3P sellers.

Multiple 3P sellers don’t have the same incentives you do to make listings for your product look clean and consistent. While you’re concerned about how consumers perceive your brand, many 3P sellers are far more concerned with how they can compete on price to get ahead. This means they may get sloppy and lazy, posting low quality images of your product or providing too few images in the stack to give customers a good idea of what your product is and how to use it. They might post poorly written copy, not provide enough information, or fail to effectively utilize the space on the page to engage customers.

All of these things work against you by making your customers lose confidence and trust in your product, the buying experience and, by extension, your brand. That’s a key thing to remember. How your product is portrayed by one seller reflects on your brand as a whole, and if you have too many sellers doing a shoddy job of their listings, you’re going to tank both your conversion rate and the way consumers view your brand.

2. Multiple sellers affect your Buy Box ownership

The Buy Box on Amazon is prime real estate. It can jet propel your sales and conversion rates and get your brand invaluable exposure. Winning it also unlocks Amazon’s coveted sponsored ads. That means you want to win the Buy Box as often and consistently as possible.

While winning and maintaining the Buy Box isn’t hard to do with one 3P seller and a strong presence on Amazon, having multiple sellers can put a lot of jarring stops and starts into your ad strategy and give you less control, even leading to Buy Box suppression as you lose out on pricing control.

Amazon gives a higher percentage share of the Buy Box to the strongest seller on a listing. That seller might get 80% of the day, for example, while a lower-ranking seller gets the remaining 20%. Without 100% of the Buy Box, you can’t have 100% ownership of the day, which means you can’t decide when your sponsored ads run. They might run at a time that isn’t very conducive for sales as a result.

Another downside of having too many 3P sellers is that you essentially have to round robin winning the Buy Box. It can take a lot of time and work to coordinate everything.

3. More than one 3P seller makes your strategy less cohesive

For an ad strategy to be most effective, it needs to be aligned across targeted keywords, competitors, and content and look the same across all channels. It takes a lot of work to organize it all, and (as you can imagine) this is significantly easier to accomplish with fewer sellers.

The wider your distribution, the more work you have to do for a successful ad campaign, like communicating with all sellers on promotions, calendaring sales, supplying marketing materials, and more. In this scenario, you can’t always count on a wide network of sellers to execute your sales effectively. What typically ends up happening is your ad strategy is inconsistent and incohesive among your sellers, therefore not as strong as it could be.

4. Multiple 3P sellers may increase the cost of your ad bid

Aside from wrecking your conversion rates and requiring a lot of coordination, a wide distribution of sellers can also cost you more in ad spend. Without strong communication between your sellers, it’s very likely they’ll end up competing on the same keywords and drive up the cost of the bid for them on Amazon, resulting in a lower ROI and intrabrand competition. The last thing you want to do is watch ten different sellers waste your advertising dollars to compete with each other and win few sales for you in the process.

5. More than one 3P seller causes price erosion

Selling on ecommerce marketplaces is like juggling: the more balls you have in the air, the harder it is to manage them. When you don’t have control, one or more of them will go rogue and then soon all of them will come toppling down on top of you. In ecommerce, price erosion is when the balls fall.

Price erosion is what happens when a seller drops the price on a product below MAP to get ahead and win the Buy Box, forcing other sellers to lower their prices on that product to compete. These sellers will keep moving on price to beat each other out, and pretty soon, your product will have been stripped of both its value and its margins. This not only harms your brand online, but it damages your relationship with your brick-and-mortar distributors by corroding their margins. Left unchecked, this price erosion will keep happening and it can lead to a profitability death spiral where your products fail to make a profit. Pretty bleak, isn’t it?

The worst bit is that when price erosion is happening, advertising can make it worse. Any attempt you make to advertise a product that isn’t already in the Buy Box will inevitably drive traffic to the listing with the lowest price. Inadvertently, you’ll end up accelerating your own price erosion and the profitability death spiral.

How Pattern can help

One way you can solve your advertising problem is by narrowing your 3P partners down to exactly one: Pattern.

Pattern is like the Swiss army knife of your ecommerce business, because we offer you every tool you need to clean up your channels, enter new marketplaces, and grow your profits long-term. When it comes to multiple 3P sellers, we pinpoint and help you eliminate the bad players eroding your prices, sharpen your listings, help you win the Buy Box, and do the grunt work to make your advertising strategy cohesive across all channels.

We use data science to revitalize your brand presence from top to bottom and help you win big on ecommerce. We can also take your brand into new frontiers like Walmart Marketplace or even further to international marketplaces to help your brand make a global footprint. We aren’t just one of your sellers. We’re a partner that loves your product as much as you do and puts your success first.

To get started or learn more about how a partnership with Pattern can help your business, contact us with the form below.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 22, 2022

How an Amazon SEO Agency Should Be Serving Your Brand

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. 

What is an Amazon SEO Agency?

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:

Prioritize Your Success

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.

Provide Detailed Competitive Insight

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.

Reduce Your Ad Spend Over Time

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.

Amazon SEO Optimization and More

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.

Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)