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.
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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.