Are your prices being undercut by online resellers? When those resellers lower their prices, they’re usually quickly followed by other resellers, which often results in a domino effect. Before you know it, profits are plunging as you face price erosion.
As margins decrease, resellers turn to the manufacturer, asking for lower prices so those margins can be maintained.
Price erosion has long been a problem for brands. However, online marketplaces like eBay and Amazon have lowered the barrier to entry, making it easy for third-party sellers to list any products they like. Sellers are encouraged to list the cheapest prices possible and are rewarded with prominent placements at the top of the listings on those online marketplaces.
This allows you to beat the other retailer, who will simply price match or undercut you again until you have zero margins left.
So how do you combat price erosion? One option is to join the Amazon Brand Registry. The program was designed to protect brands with registered trademarks, and you’ll have greater support from Amazon, access to the Amazon Buy Box, and protection from product hijacking.
When your brand is registered with Amazon, other sellers must have permission from you before they can sell your products. Wherever you’re selling your product, make sure you have a MAP Minimum Advertised Price for each product. Then, limit your distribution to authorized sellers who sign a contract stating that they won’t sell your products for less than your MAP.
Ideally, this should happen before you begin selling a new product online. Limiting the businesses that can sell your products will help you keep a better watch over the entire network, and spot resellers who shouldn’t have your products listed at all.
Not only will this help you prevent price erosion, but it will also help you protect your brand throughout the online marketplace.
Another option is to begin using product serialization. This means that you’ll stamp or print a number on each of your products, so your warehouse can easily track them. This makes it simple to identify any leaks, and customers can check if they have a legitimate product. While this will initially take some time and money, you’ll likely regain the costs as your margins are better protected.
Maintaining the integrity of your brand and pricing can be difficult and time-consuming. If you’re currently facing price erosion, get in touch today to learn how we can help.
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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.