As digitization continues to foster online sales through marketplaces, brands are at risk of losing visibility of their products and sellers.
During the last decades, the ecommerce industry has disrupted the ways in which companies and consumers interact and behave. E-commerce has allowed brands to showcase their products to potential buyers on a global scale in what is often regarded as a fast, simple, and profitable way.
Despite the industry being somewhat mature in which key players retain a large portion of the market share, the market has increased 45.8% since 2019 and global e-commerce retail sales generated $4.9 trillion in 2021.
While new players, mainly start-ups and new Asian e-commerce platforms, enter the market and digitization efforts focus on increasing customer experience to retain customers and gain new ones, the market is forecast to reach US$1,996.0 billion in the Chinese market, US$723.6 billion in the US market, and US$655.6 billion in the European market by 2025.
The growth in e-commerce, coupled with the rising number of digital shopping channels is making it harder for businesses to retain visibility of their brand, products, sellers, and distribution networks online. In fact, it´s these very channels which are facilitating the sale of fake and counterfeit goods, damaging revenue, consumer confidence, and brand reputation. Moreover, these channels also facilitate the non compliance of the distribution agreements regarding prices, markets, etc on behalf of the resellers and open the doors to illegal distribution of real products.
There are a number of risks associated with selling products online, many of which brands are not necessarily aware of. What might seem as a fast, simple, and profitable way to expand into new markets and reach new customer segments is anything but. While it does bring immense value and profits to companies, e-commerce also puts companies at financial, reputational and contractual risk if existing and emerging threats are not dealt with by the necessary means.
One of the main issues companies face while selling online is a lack of visibility and control of their sales and pricing strategies.
As companies rely on third party resellers to commercialize their products, controlling the price at which they sell these official products and under what conditions is becoming increasingly difficult. However this must be achieved to ensure they are fulfilling their adhering to contractual agreements, and to identify if sellers are trading your products outside of your agreed distribution channels. Not being able to identify these challenges can lead to gray market issues, restrained relationships with your sellers and a loss of confidence in your brand.
With over 300 million active accounts, and 1.9 million selling partners across 180 countries worldwide it’s becoming increasingly difficult for brands to retain sight and manage their sales on e-commerce platforms. The appearance of unauthorized sellers is no surprise, within most of the e-commerce platforms such as Amazon or eBay. As unauthorized sellers often trade products below the official price, they don’t comply with the official product description and additional augmented product services, and they often pressure official sellers into lowering their prices too.
Making sure your resellers are compliant with your pricing policies is not only critical from a financial perspective but also from an operational one. Sales prices directly impact consumer perception, loyalty, and overall reputation. Moreover, a lack of seller visibility can lead to strained relationships due to a breakdown in seller communication and transparency.
Information and data is an asset which makes brands who they are and helps companies make strategic decisions, yet less than 50% of companies mention data as a way to drive corporate value. Knowing what sellers are trading, the price of each unit, the discount being applied to each product, current stock levels, and in which countries they operate is key when considering partnerships, and key to making informed business decisions.
Track your authorized and unauthorized sellers to discover your channels, gray market situations, or even parallel imports that occur when your authentic product is being imported outside your authorized market. Use the data obtained through seller tracking solutions to report and act in real time.
The use of seller tracking technology, specifically the access to insights and data about your sellers and the identification of unauthorized activity or discrepancies, enables you to take action whenever it is needed. As such, you will be able to have a better control over your online sales strategy and boost your sales.
With a global internet penetration of 62.5% and the growth of smartphone ownership suggests that consumers will continue to favor the expansion of the e-commerce industry. Moreover, the incorporation of new technologies to improve customer experience throughout the purchasing journey in generalist platforms, such as Amazon. In the US in 2021, Amazon market share accounted for 50% of the entire e-commerce retail market which really highlights this migration from brick to click shopping.
Product reviews and ratings have never been more important for brand, resellers and consumers alike, influencing the sale/purchase of other potential buyers as they increase their confidence in the product they are about to purchase.
Considering the impact that this two-day event has on brands, it is little surprise that third-parties try to take advantage of official brand’s products and sell them online via unauthorized channels and sellers, or, even, by authorized sellers which do not fully comply with their contractual obligations.
At Smart Protection we track sellers throughout Amazon, giving you full visibility of who is selling your products, in what country/market, at what price, and under what description and conditions. The insights generated with our three step process (tracking, control and action options) allows you to prioritize the actions to be taken based on the different criteria of your choosing and therefore, regain control of your online distribution strategy.
Our seller tracking solution gives your brand a 360° view of the activity of authorized and unauthorized sellers which exist and emerge throughout digital marketplaces. This facilitates the monitoring of your authorized distributors to ensure that your contractual agreements are being respected, the importance of which is emphasized on days such as Amazon Prime Day so that you can maximize the opportunities and provide your customers with a positive shopping experience.