Amazon has 300 million customers, and 63 million of those are Prime members. By 2021, it’s projected that Amazon will have over $23 billion in sales in the Grocery category alone. You have incredible products and a solid business, and you’ve been thinking of expanding your market share and increasing your sales and revenue by putting your products on Amazon.
Guess what? You’re already there.
Do a quick search on Amazon for your brand or the main keywords for your products. Chances are, unauthorized sellers have beaten you there. Amazon is a thriving marketplace for arbitragers, wholesalers, and counterfeiters.
These could be legitimate arbitragers who picked up your products at a discount to sell them faster and at a higher price on Amazon. They could even be your wholesalers. Or worse, they could be counterfeiters using your brand-name and recognition to sell other products for quick-and-easy money.
Here’s why you should care:
1. Customer Confusion
Defective or used products, inaccurate product information, and poor product photos. Little to no customer support, unhappy customers, and bad reviews.
All these issues will greatly tarnish the brand name you’ve worked so hard to build.
Most customers don’t realize there are multiple sellers of your products on Amazon at any given time. They ASSUME it’s the company itself. And when they have a bad experience or are unhappy with your product, they don’t blame the anonymous seller, they blame the brand – YOU.
2. Pricing All Over the Board
Amazon loves providing customers with the lowest price. Multiple sellers of your products creates an environment for price competition. Left un-checked, this leads to a race to the bottom. It doesn’t matter if you have a MAP (Minimum Advertised Price) – MAP means nothing to arbitragers and resellers, and Amazon doesn’t enforce it. Ultimately, your wholesalers and retailers won’t be able to compete.
Your customers will go where they can get your products the cheapest.
They’ll stop buying direct from your website.
They’ll stop buying from your brick-and-mortar and online retailers.
Price competition will squeeze margins to the point that your wholesalers and retailers won’t re-order.
3. Brand Recognition and Therefore Perception
All the hard work and money you’ve put into marketing, brand recognition and perception, and developing consistency across your sales channels is out the window when rogue sellers or your wholesalers undermine you on Amazon.
Your customers will begin to perceive your brand as a reflection of price fluxuations, and general lack of care. They’ll wonder why you don’t answer questions, respond to complaints, or address bad reviews. They may not receive the correct product, any product at all, or they may receive copy-cat product.
And scariest of all, what happens if a customer becomes ill or injured from using one of the above products? The seller disappears and the customer goes after your brand.
OK….So What You Can Do?
Amazon is a mecca of money-making opportunities, and your wholesalers, retailers, and competitors know it.
You put a lot of time, effort, and money into creating incredible products, building your company, and taking care of your customers.
But who does all the work? You. Who gets some of the profit? Them.
Your products will end up on Amazon whether you want them to or not. And when they do, your brand won’t be represented the way you would represent it.
Here’s how to protect yourself from bottom-feeders:
Become a Seller – If you’re not already a seller of your own products on Amazon, sign up. Get there first and establish your brand. Take your fair market share. Control the pricing, the information on the product pages, the images, the advertising, and the customer service your customers expect from your company.
Register Your Brand – Register your brand with Amazon so you can maintain control of your business and have a legitimate reason to prevent others from selling your products. Brand Registry requires a trademark, a website, and proof you’re the manufacturer, and it can be a lengthy process, so the sooner you start, the better.
Establish MAP price and Wholesaler Agreements – You’ll want to establish your pricing structure across all your sales channels. Re-assess contracts with wholesalers who may be selling on Amazon, and deny contracts with new wholesalers who want to. Be aware that Amazon does not care about, let alone enforce, MAP agreements. That is up to you.
Police Your Products – Be proactive. Competitors, hijackers, counterfeiters, wholesalers, and arbitragers are all looking to make money with your products. Make it a habit to check your product pages and seller account daily (or have an Amazon Expert monitor it for you) to head off and address issues fast. If your products do well on Amazon, it will attract attention, and sending Cease & Desist letters, maintaining the Buy Box, preventing counterfeiters, and dealing with fraudulent reviews can become a daily occurrence. (This is also the reason we suggest you never wholesale to Amazon in the Vendor Program – Amazon has a reputation for not representing your brand well.)
Take the opportunities Amazon gives you to grab a larger market share for your company, while preventing arbitragers, wholesalers, and your competition from enjoying the fruits of your labor by solidifying your brand presence – the right way.
Need Amazon help?
We manage all areas of Amazon accounts and work on a project-by-project basis for improving rank and overall sales revenue. Contact us for a plan of action for taking your business to the next level.