Why A Lack Of Pricing Consistency Damages Your Brand
Are you taking your pricing seriously? Does consistency with pricing matter? With 3rd party sellers violating MAP pricing on Amazon, the negative impact this may have on your brand is tremendous. Your brands reputation both online and with brick-and-mortar retailers is essential, and not monitoring your products properly can have a severe repercussions.
While standing in the aisle of a local retail store, you discreetly pull out your phone and check the price of an item on Amazon. We’ve all done it. Today’s shoppers take full advantage of online marketplaces to get the best price, often resulting in a positive experience for everyone.
But what happens when you lose control of your pricing online, particularly on Amazon?
If you haven’t paid much mind to the presence of your brand’s products on Amazon, you may have already experienced the negative impact of not taking your pricing seriously. As resellers gain access to your product to sell on Amazon, they may violate the minimum advertised price (MAP) of your products, selling them at a low cost to burn through their inventory while still making a profit.
Having a MAP agreement in place upon the beginning of a new partnership with a reseller and policing that agreement once the products are being sold is extremely important when it comes to your brand’s reputation. Failing to do so can have a variety of negative effects.
First, failing to monitor the price of your products on the Amazon marketplace can severely damage your relationship with brick-and-mortar retailers. In our opening example, imagine that the same consumer checking a product’s price on Amazon sees that the item is being sold at a steep discount simply because an unauthorized retailer is unloading inventory they acquired through a grey market distributor.
In this scenario, with price being the ultimate deciding factor for many consumers, your product is now being purchased online at a much lower price and driving sales away from the brick-and-mortar retailer. Once they become aware of this pricing discrepancy, the retailer may threaten to stop carrying your product altogether unless you’re willing to match the discounted price or remove the unauthorized seller from the equation.
To make matters worse, Amazon is uninvolved in seller pricing agreements and does not require sellers to adhere to your specific MAP policy. This makes enforcing your minimum advertised price nearly impossible unless you’re able to make a case to Amazon that the listing should be removed altogether, although this can take months. Will your brick-and-mortar stores be willing to wait?
Your brand’s reputation is also at risk in the eyes of potential customers. If a product that sells for $100 in-store is regularly found on Amazon for $65, and the presentation of the item is varied and inconsistent, shoppers may become wary of the product’s quality. As much as everyone loves a great deal, consumers also want to be sure that the product meets the expectations the brand has established across retail outlets.
Correcting these issues and maintaining your minimum price online is no small task, but it can be done. The first step for any brand that notices such discrepancies should be to create a MAP agreement with every vendor you partner with to solidify your minimum selling price. Once these agreements are in place, regularly monitor your products online to ensure that your MAP policy is being honored.
Next, cleaning up your brand’s presence on Amazon means partnering with a single seller that will honor your MAP agreement, accurately reflect your brand’s products and values on the marketplace and win back the buy box from unauthorized resellers. Additionally, brands should take time to ensure that retailers aren’t unloading excess product through back channels, perpetuating the problem. In some cases, it may take time for those unauthorized parties to sell through their existing inventory.
Ultimately, your brand’s presence and pricing on Amazon are up to you to maintain and protect. Brands and manufacturers that turn a blind eye to the Amazon marketplace risk having their name dragged through the mud by unauthorized resellers, not to mention damaging their relationships with brick-and-mortar retailers. Pricing consistency matters. Don’t wait to learn the hard way.
Originally posted on Forbes.com