Frustrated with the inability to stop third parties from selling their products on Amazon’s open marketplace, many brands have resorted to a “resistance is futile,” laissez faire approach to combatting the issue.
But as the platform continues to evolve and more third parties emerge with substantial presences on Amazon, more vital implications have surfaced that should be a red flag for brands to take a more aggressive approach at battling the 3P landscape.
Here are five important reasons not to let third parties run free on Amazon:
1) Inventory Control
There are ardent standards by which manufacturers expect their product to be transported, warehoused, displayed, and sold by traditional retailers. And while Amazon maintains these standards for its vendors, it’s almost completely unmonitored within the 3P landscape.
Many third parties are legitimate retailers and licensed partners of the brands they’re selling, but often far more are rogue sellers, running high-volume, low-margin Amazon stores, offering whatever products they can procure and sell for a profit.
In these instances, a significant blind spot emerges in tracking the product from factory to consumer, leaving to mystery if sufficient standards were followed to ensure the product was handled properly and safely during its journey.
This leads to customers receiving damaged or incomplete merchandise, which can reflect horribly on a brand, especially as many Amazon consumers are unaware of the third-party system and assume all product comes directly from the manufacturer via the retailer.
This is most egregious, however, in the case of food and other products with expiration dates or strict handling and storage requirements.
The moment inventory ends up in the hands of a third party, there is no longer a guarantee that product will be stored in an environment that would prevent the product from losing quality or being ruined altogether.
There are countless examples throughout Amazon of innocent customers receiving merchandise past its expiration date.
Damaged, expired, or otherwise contaminated merchandise can lead to significant damage to a brand’s reputation and its promise of quality.
2) Order Accuracy
Another often-seen consequence of a strong third-party presence is, quite simply, the wrong product being delivered.
This occurs with product varieties (“I ordered Cool Ranch and I received Nacho Cheese”), but is especially relevant with manufacturers of many similar products differentiated by small adaptations.
Electronics, auto parts, hardware, etc., often have specific specifications needed or preferred by the consumer, and the difference to a laymen seller lacking a strong knowledge of the product could be through a lengthy model number or year of production.
While not as potentially harmful as delivering an expired or contaminated product, this is a customer service nightmare and terrible reflection on the brand, again, for the majority of customers unfamiliar with the third-party landscape.
3) Brand Control
Branding is a fiercely guarded consideration for so many organizations selling to the public. Imagery, colors, verbiage, fonts, and other variables are developed and poured over for months within organizations to ensure a brand is expressing itself to its audience as it intends.
Yet this can be demolished in a second on Amazon — where research suggests more people are likely interacting with a brand than on that brand’s intricately manicured website.
It takes mere moments perusing Amazon to find product listing images submitted by third parties, many taken by iPhones with dim backgrounds, or incorporating old packaging – the kind of things that make a marketing professional lose sleep at night.
The same can be said for copy, where just about anything can be uploaded into a listing by a third party. Information could be off-brand (using prohibited or discouraged verbiage, promoting the wrong features, etc.), or can be flat-out incorrect (promoting features that product doesn’t have, providing incorrect specs, etc.)
Fortunately, this is something that can be successfully battled and remedied by brands, but it demands intricate initial and ongoing oversight of the catalog.
4) Consumer Confusion
Brands not policing third parties are often overrun with duplicate listings and incorrect variety names third parties create to avoid competing with other sellers for Buy Box ownership.
Because of this, shoppers accustomed to walking down store aisles and seeing products neatly sorted by brand, variety, size, etc., can be inundated with multiple listings appearing to offer the same product.
On top of this unnecessary complication, with duplicate listings there’s also an implication of differentiation, leading consumers to confusingly scan each listing in an attempt to determine how one differs from another when, in reality, they’re likely identical.
Such experiences are bad for the brand, bad for a company’s e-commerce growth, and could potentially lead to a shopper pursuing a competitor brand.
Putting oneself in the position of a third party operating a lucrative business selling second-hand products on Amazon, it’s easy to see where you’re likely to point your energy.
These opportunists rely upon what products can be procured easily and sold for a profit. However, brands fighting back against third parties, merging duplicate listings, launching custom products and variety packs, and otherwise protecting the brand are far more difficult a target.
If one of these third-party merchants has the choice to pursue selling a brand who is actively defending their presence vs. another who is essentially allowing third parties to run wild, the decision is logical.
Simply by virtue of displaying an effort to combat the issue, and control brand, price, and listing content can be enough to push a third-party merchant onto the next brand on the endless list they can pursue selling through Amazon.
After all, when there are hundreds of brands not fighting back, why go through the effort of battling one of the few that are?
Policing third parties is not simple. It’s a tedious process not only to identify issues, but also to fix them and ensure their ongoing accuracy and consistency. Especially for companies with large product catalogs, it’s a time-consuming task very few have the bandwidth to successfully tackle.
This is, in many ways, why companies like Marketplace Strategy exist and are able to achieve a level of success and sales well past what has been previously seen on Amazon by their clients.