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.
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:
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.
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.
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.
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.
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.
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.
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.
If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.
At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.
Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.
DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.
Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.
Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.
So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.
Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.
So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.
As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.
The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).
As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter.
It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.
Set up a call to get your international expansion strategy in motion.