10 Ways Vendors Damage Their Brand on Amazon.com

As a follow up to the webinar 10 Ways Vendors Damage Their Brand on Amzon.com we are posting this blog to recap key features and the Q&A session.

Key Takeaways from the Presentation:

• Allow any retailer to sell your product in the marketplace
  • Select merchants are a good way to expand your product offering, while using too many will harm your brand.
  • Using too many merchants will also force your prices low.
  • You need to keep track of who is selling your items on the platform, if not, you have effectively lost control of your distribution.
  • Let online retailers control content and branding
    • Amazon allows vendors and merchants to contribute content for each product: title, brand name, up to 5 bullet points, and a product description—this could be the first interaction a customer has with your brand—would you want someone else to control this?
    • You must have consistent content and branding policies for anyone who sells your products
    • Don’t have an electronic catalog with UPCs available
      • Selling on Amazon requires every product have a UPC and a model number to match products you plan to sell with the products already sold on the platform.
      • Very often, merchants will use different UPCs and model numbers in order to establish their own listings and reduce competition with Amazon and other merchants. This practice violates Amazon’s Seller rules.
      • With multiple listings for a single product, reviews will be split up which will lower the chances of this product being discovered.
      • Never update your product content or hidden keywords
        • Amazon gives you the ability to overhaul your detail pages and hidden keywords and upload it for free.
        • You should be assessing your existing content at least once a year.
        • With customer behavior constantly changing and new sellers joining Amazon, you must keep your content fresh to maintain or improve your discoverability and conversion
        • Ignore customer feedback
          • You can view customer feedback on Customer Reviews and Customer Q&A, both of which are located on the detail page.
          • Customer reviews are critical—if a product lacks reviews or has poor reviews, it will not sell. Therefore, the more positive reviews your product has the better it will sell.
          • Customer feedback delivers important information about how they use your products, product flaws, and likes and dislikes.
          • If you don’t have any reviews, start engaging your existing customer base to leave them on Amazon.
          • Prioritize merchant pricing and inventory allocation over Amazon Direct
            • Many vendors have tiered pricing based on sales velocity or order size. Amazon has the potential to be one of your top 3 retailers. Why wouldn’t you give them top tier pricing?
            • If you have online retailers with significantly lower costs, they can undercut Amazon’s price at will. You can’t build your business on Amazon if Amazon doesn’t sell your product profitably.
            • There’s no incentive to participate in merchandising efforts or to even sell directly to Amazon if your online retailers have preferred pricing. Examine and eliminate volume-based pricing as well. Amazon will order organically and stock up based on a forecast. Your sales volume will increase over time and Amazon will eventually be one of your most important channels.
            • One of the biggest advantages of selling directly to Amazon is to have the “Ships and Sold by Amazon” message on the detail pages. There is a higher level of customer trust than with merchant offerings. In fact, vendors who move from selling as a merchant to selling direct can see 2 – 3 times the sales simply from the addition of the “Ships and Sold by Amazon” message.
            • Ignore Amazon-provided forecasts and go out of stock
              • Amazon works best when you’re 100% in stock. Often that’s not possible due to a variety of factors but it should be something to strive for.
              • 25-week forecasts are available in Vendor Central–do not ignore them. These forecasts are automated and adjust weekly.
              • Refer to them regularly–especially in the late summer. Ideally you’ll be able to stock up in time for November/December. Note that forecasts are just that and will have varying degrees of accuracy depending on product type, in-stock rates, and seasonality.
              • Use Amazon to get rid of excess inventory
                • Though Amazon does have their “Lightning Deals” and “Deal of the Day”, it is not a flash sales site–it should not be a dumping ground for your overstocked products.
                • Amazon works best when you grow reviews, improve SEO, merchandise, and stay in stock. Your product rankings will improve over time and sales will grow. Using Amazon simply to get rid of inventory will hurt your brand image.
                • Customers will see your products constantly discounted with inconsistent availability. This leads to a poor customer experience and a poor impression of your products and brand. They will essentially be trained to expect a bargain next time they run across your products on or off of Amazon.
                • Ignore self-service merchandising opportunities
                  • If you get POs every week from Amazon and sales grow 30% every year you’re just treading water, only growing organically.
                  • Amazon offers vendors enhanced detail pages, brand stores, coupons, and search ads. All of these services are designed to increase product discoverability and conversion, resulting in accelerated sales. They all have a small cost associated with them, but they’re worth it.
                  • Think about it this way: most of your competitors aren’t merchandising correctly. If you do, you can leapfrog their search rankings and improve your market share.
                  • Don’t have an Amazon strategy (even if you don’t sell on Amazon)
                    • You need to consider Amazon’s effect on your brand and include them in an overall ecommerce strategy.
                    • Even if you don’t plan to sell to Amazon and don’t want anyone to sell your products on Amazon, at least make that an official part of your overall ecommerce strategy and try to enforce it.
                    • Most companies should sell on Amazon, but that’s not a strategy–it’s just a tactic. You need to consider who will sell your products on Amazon, what content they should use, and how Amazon affects your other channels. Also, know what % of sales Amazon accounts for. It doesn’t matter if you don’t sell to them, you need to know.

Q & A

How do you stop unauthorized retailers sell on amazon?

• There are a number of strategies to deal with unauthorized resellers. start with retailer/reseller agreements with your distributors and retailers you know about. Go over your list and try and stop them from selling on Amazon or selling to Amazon. There are tracking codes on each product that identify which distributor it came from, by examining these you can identify who is selling unauthorized.

What if you have only a certain amount of retailers that you authorize to sell on Amazon and other rogue dealers start selling? How do you stop the rogue dealers?

• You will need to identify who they are, then you can shut them down since you know where they are buying the product from.

Are there ways to influence, respond, or encourage higher reviews on Amazon?

• Set the right customer expectation through content—make sure you are not giving the expectation for something that does not exist. A+ detail pages allow you to show more details of the product and describe it better. Also, engage your existing customer base who are passionate about your product and ask them to leave reviews. Don’t bribe them—you want authentic reviews.

Do the coupon promotions work?

• Inconsistent results—depends on level demand for product and the amount off. Amazon puts preference on coupons of higher discounts. Have other merchandising around, such as search advertising and an A+ detail page to help convert better.

How can you have a long term Amazon strategy when they change your buyer every three months?

• This goes beyond changing buyers frequently, it’s about your volume and Amazon’s policy of only responding to really large vendors. LCM recommends self-merchandising opportunities and controlling it yourself. Do your own forecasting, coupons, search advertising, branding, and A+ detail pages. You can do discounted product upload from Amazon Vendor Central, which will put your product on the deals page.