Own Your Brand by Selling Direct on Marketplaces

Brands know that marketplaces represent the future of digital commerce. Amazon alone is expected to handle half of all ecommerce by 2021, and this year’s Prime Day sales jumped 60 percent from 2016.

Given Amazon’s success and the growth of other marketplaces like Jet and Walmart, brands without a marketplace strategy risk missing significant revenue opportunities. While retailers remain the most consistent source of revenue for brands, a supplemental marketplace approach is crucial for maximizing digital revenue in an omnichannel retail world.

Although most brands already have products available for sale on major marketplaces, many allow third-party sellers to handle marketplace sales rather than owning the process themselves. Trustworthy third-party sellers can help brands drive sales on marketplaces, but the dangers of this approach often outweigh the potential benefits.

Maximize marketplace revenue by selling direct

Leaving the fate of your brand’s marketplace sales in the hands of third-party sellers is risky. If you don’t have control over your products on the marketplace, unreliable sellers can destroy your brand reputation, spread incorrect product information, or misprice your products.

Nike is one of the first major brands to focus on this strategy. The company announced earlier this month that they plan to sell direct on Amazon to eliminate counterfeiting and incorrect product information. Nike also wants direct access to Amazon’s loyal customer base, which experts estimate could result in $300-500 million in additional annual revenue to Nike.

By selling direct on marketplaces, you can regain control over these crucial components of your brand’s marketplace sales:

  • Product Information: When you allow third parties to sell your brand on marketplaces, you give up control over how your products are presented, creating the potential for inaccurate or sub-par product details and images. By selling direct, you can ensure accurate, complete and consistent information from site to site, which eliminates confusion and frustration among consumers.
  • Brand Reputation: Unhappy customers will blame your brand rather than the third-party seller that sold your product on a marketplace. Avoid taking heat for third-party seller mishaps by owning the relationship with customers. This way you can eliminate potential problem areas such as counterfeits, false information or shipping delays.
  • Pricing: Incorrect pricing is one of the biggest risks involved with third-party sellers on marketplaces. Third-party sellers often underprice products, which can lead to an incorrect perception of the value of your products. Even worse, this means a missed opportunity for you to optimize the price and make a higher profit. Pricing is particularly important on Amazon, where winning the Buy Box can make or break your sales on the site.

Brands need a comprehensive marketplace strategy

Complete ownership of the marketplace process is no easy feat for brands — otherwise they would already do it. Without the right strategy and tools, it can be difficult to maximize revenue on these sites as each marketplace has different rules, regulations and pricing systems.

That’s why brands need a system that houses information for the products sold across all marketplaces and offers the algorithms necessary to optimize pricing. A central hub that integrates with current inventory data and mitigates the risk of inconsistencies, frustrated customers and lost revenue opportunities.

The right marketplace strategy can also make a big difference for brands struggling in a world of declining retail sales. Greater brand visibility on marketplaces boosts sales across other channels. One study found that more than half of consumers begin their product searches on Amazon before moving on to other sites.

In the ever-evolving ecommerce world, one certainty has emerged: marketplaces are here to stay. Brands facing pressure to maximize digital revenue will be smart to own their marketplace sales rather than leaving their fate in the hands of third-party sellers. And as competition across marketplaces grows, there’s no time to lose.

Let us help you develop a winning marketplace strategy. Contact us today.

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