Serial entrepreneur with an industrial psychology education and over 23 years of creating, consulting, and operating businesses. Loves mountain biking, snowboarding, and surfing.
When trying to grow a brand it is normal to think more distribution is better. Manufacturers are pumped when they get large enough to make it into the top-tier wholesale distributors. Sales are growing and everyone is happy. During this growth phase, it is hard to be aware of the problems that might lurk just around the corner. With growth in distribution comes growth in unauthorized sellers. There are many “underwear entrepreneurs” who get a data feed from a WD and list all your products at rock-bottom prices on Amazon and eBay. Who are these guys?! Some of them put a lot of effort into hiding their identities so it is very hard to figure it out. Pretty soon your die-hard brick-and-mortar dealers are complaining because they can’t compete with the online sellers and are threatening to stop making stocking orders. This is a real problem. In addition, new wholesale distributors are refusing to carry your brand until you clean up your pricing.
You might try to clean up violators by putting them on a do not sell list. This is a great idea and often works great, but what do you do when it doesn’t? Where are they getting the product from? Maybe your new wholesale distributor isn’t enforcing the Do Not Sell list you sent them? Or, maybe the seller has an account with multiple WDs? This happens all the time. It can take a lot of time to figure it all out.
Does any of this sound familiar? As you grow, managing your sales channels should be given careful consideration. You need a long-term plan when writing the terms and conditions for your price policy.
• Do you allow sales on third-party marketplace sites?
• MAP or MRP policy?
• Should you have a preferred dealer program?
• What are the penalties for violations
• How many WDs do you want?
There are many things to consider but above all, be prepared to monitor and enforce your policies regardless of the type. Professionally enforcing MAP is a “self-correcting” way to clean up over distribution and leaves a smaller subset of sellers to contend with.
A smaller subset of sellers does not mean no growth or fewer sales. There is a common illusion that more sellers mean more sales. This might be true with brick-and-mortar dealers, but the same thing does not carry over to online sales. When a customer looks to buy your product on Amazon it does not matter if there are 50 people selling the part or just a handful. They are just going to buy it from whoever has the lowest advertised price. And with hundreds of sellers, I can assure you it will be harder to have any control over who is advertising for the lowest price.
So, before your sales channels turn into a free for all and there is a race to the bottom, take the time to plan. Make sure the terms and conditions of your policy and your expectations as the manufacturer match. Future negotiating with warehouse distributors and stocking dealers will go a lot smoother when you’ve addressed these important points in advance
Let's face it, as a business owner, you want to maintain control over your pricing strategy and protect your profit margins. That's where a Minimum Advertised Pricing (MAP) policy comes in handy. It's like having a bouncer at the door of your nightclub, making sure everyone is playing by the rules. ...Read More
Sounds like a loaded questions doesn't it? One of the most overlooked or undervalued answers to this question is "Do you have the stomach to stop selling to a good customer". Consider this "Is this really a good customer if they're undermining your efforts to maintain a fair market for the rest of your customers". Consumers will find and buy your products regardless of the source. Brand integrity, customer service and continuing to bring viable products to market isn't easy or inexpensive but it's what you've built your business on. Don't allow your work to be degraded by sellers who are only interested in a quick buck and could care less about how their actions undermine your hard work. ...Read More
In today's dynamic business climate, price changes have taken on much more importance. Freight and raw material costs are rising quickly and price changes need to happen quickly as well. Fortunately, we make these price changes easy for our clients. It's as simple as sending us an email with the new file and we make it happen. No need to log into a portal and format your file to fit etc. Just send us your price file to ensure enforcement is in sync with your internal price notifications. In addition, we can make sure your new price file is distributed to all your resellers, even the ones that you do not have direct contact with. We can notify all the Amazon and eBay sellers in one easy email making your life easier and also heading off future advertised price violation issues. IMPORTANT: Do not forget to update your data services as well. Updating one and not the other is a recipe for a MAP violation nightmare." Send your price files to; danh@mapservicescorp.com ...Read More
Besides monitoring and MAP policy enforcement we also develop a healthy relationship with your compliant sellers.
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