The time to control and grow your sales on 3rd party marketplaces is now!
A few short years ago eCommerce did not exist. Recently, however, it has turned into the go-to model for shoppers that we see today. Consumers are moving further and further away from shopping in brick and mortar stores. That, and the ability to shop 24/7 365, encourage more and more millennials and other demographics to shop online.
- Worldwide, $1.9 trillion in sales took place via eCommerce in 2015. This figure is expected to reach $4 trillion by 2020. According to Forrester, more than half the population, or about 190 million U.S. consumers, will shop online this year.
- In the US alone, retail eCommerce is expected to hit $423 billion in 2016, a 24% increase over the $341 billion from 2015. Double-digit growth is expected to continue through 2020 as well.
- Arguably, the biggest player in the ecommerce field is Amazon. In the last reported year (2016), the multinational company's net revenue was $135.99 billion U.S. dollars, up from $74.45 billion U.S. dollars in 2013.
- Eighty-three percent of primary household shoppers shopped at Amazon at least once last year.
Those who haven’t yet properly transitioned to a multipronged retail/eCommerce solution are at serious risk of losing their significance in the complex sales and distribution markets we have today. Even those who have made the transition can clearly benefit from a well-organized roll out and increase of sales via third party platforms. With the proper placement, a manufacturer has access to millions of shoppers that he would never have had with only brick and mortar stores. Amazon alone has millions of consumers browsing their product pages daily. Not having your product adequately placed in front of these shoppers is detrimental to a brand’s growth and future.
However, selling online is not without its issues. One must be very cautious about the serious pitfalls and problems that have forced many manufacturers to abandon the eCommerce marketplace.
The Problems and Pitfalls of eCommerce
The pitfalls to online selling are many. As the industry changes, more and more consumers are turning to online marketplaces to shop. The opportunity for competition, unauthorized sellers and outright counterfeiters abound. Without proper management and supervision, these factors will dramatically affect a brands value.
- Third Party Sellers and CounterfeitersOf greatest concern are counterfeiters. Once a counterfeiter latches onto your brand it becomes extremely difficult to remove them. Not only are they making a profit off of your brand’s products, but they are also systematically devaluing your brand and driving down the price. When consumers shop online, they have no idea if they are buying legitimate products directly from the source or a cheap knock off made in some basement. All it takes is one bad review of your product to destroy your brand’s reputation.
With their ability to source products overseas at discounted rates and no distributor agreement in place, unauthorized third party sellers routinely drop their pricing well below MAP and leave no room for authorized sellers to compete with them. Maintaining MAP becomes close to impossible when you have unauthorized sellers running rampant across multiple eCommerce platforms. Controlling them has become the new frontier of online sales.
- The Glut of eCommerceThere are new eCommerce sites popping up every day. Maintaining and growing sales on each of these platforms is gradually becoming more and more difficult. In addition to Amazon, there are many others, such as Jet.com, Walmart.com, Groupon.com, Ruelala.com, Gilt.com, Sears.com, Buy.com, Ubid.com, Amuze.com, Newegg.com, Overstock.com, and many more. Each of these sites demand a custom and knowledgeable approach.
Even when a manufacturer chooses to sell their products directly to Amazon or other eCommerce resellers, the issues of third parties undercutting the price of products or counterfeit units flooding the market is not mitigated. It is not in Amazon's best interest to control this, as they themselves do not respect MAP pricing and will slash a price to increase sales.
- The Last Option: Selling Directly to the Consumer Out of frustration, a manufacturer may decide to represent himself online on third party platforms to help mitigate the issues already listed:
A manufacturer is not set up to sell directly to consumers!
Many hours can be wasted trying to manage the twists and turns of the eCommerce landscape. For example, a manufacturer may be unfamiliar with reverse logistics and the customer care that is required when selling online. eCommerce returns can vary between 10–30 percent depending on the category. Additionally, most manufacturers are not equipped to maintain MAP pricing or know how to create customer engaging listings, manage inventory across multiple sales accounts, manage marketing content, deal with shipping and logistics in small unit counts, not to mention a multitude of other issues that go along with selling online.
Without a representative, a manufacturer seeking to sell online will inevitably run into the problems that have led to the demise of other businesses that have ventured into the Wild West of third party eCommerce.
It takes expertise and know-how to do it right. The longer a brand waits to take control of their online market, the more irreparable damage will be done.
That is where Focus Global comes in. Focus Global is the only comprehensive manufacturer’s representative that tackles all the issues with online selling, ensuring accelerated growth, sales, and profits for its clients.
- More about Focus Global How we can Help
Focus Global Supply Inc. 888.828.0888 firstname.lastname@example.org