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Finding the right Amazon marketplace sellers is not a joke. In a previous blog post, we discussed the 4 Horsemen of bad Amazon sellers and how to shield your brand on Amazon. However, another crucial question remains when you sell on Amazon: How many Amazon sellers are appropriate for selling your products?
It's a question many vendors ask. And their decisions are ultimately dictated by metrics related to competition, profitability, etc. But countless vendors need to consider the long-term effects of seller competition on their brand.
The internal competition among your sellers could create chaos for you and your customers. And this often leads to customer confusion, which tarnishes your brand image and future success. But what is the driving force behind this chaos? And how do you go about preventing it when you sell on Amazon?
Let's explore the answers to these questions and determine how many sellers are ideal for your brand. We’ll also share a case study detailing how we helped a customer circumnavigate this issue.
Have you ever wondered why Amazon marketplace sellers and retailers fiercely compete against each other? Or perhaps you’ve questioned why they require so much assistance with their MAP agreements. And why do some vendors outperform others on the Amazon platform?
Introducing “Amazon Buy Box” – The chief culprit behind competition between marketplace sellers. And public enemy number one regarding customer confusion when you sell on Amazon.
The Amazon Buy Box is Amazon's method of assigning a winning bid to one of your sellers or retailers. Unfortunately, this feature incentivizes undesirable behavior in your Amazon marketplace sellers, which may prove a source of irritation.
However, this feature doesn’t encourage lousy seller behavior on purpose. Amazon Buy Box inadvertently brings out the worst in sellers due to the five metrics used to measure Amazon retailers.
Let’s take a closer look at these five key metrics and how they affect the buyer experience when you sell on Amazon:
Marketplace sellers on Amazon can choose to sell using Fulfilled by Merchant (FBM) or Fulfillment by Amazon (FBA).
With FBA, Amazon stores inventory at its facility and handles shipping. This offers customers fast, 2-day prime shipping and increases the likelihood of winning the Amazon Buy Box.
Ultimately, it’s up to the seller to decide what works best for their business. But Amazon prefers to provide these options for increased convenience.
Is Amazon monitoring seller performance? The answer is a definitive “Yes.”
If sellers use FBM from their warehouse, it's vital to maintain swift fulfillment, shipments, and accurate tracking. In fact, FBM sellers must maintain a late delivery rate of less than 4% to remain competitive.
On the other hand, FBA sellers get a free pass in meeting these quality metrics. That’s because Amazon takes responsibility for fulfilling and shipping orders on time.
Those who sell on Amazon as FBA sellers must have the lowest FBA price to win the Amazon Buy Box bid. Amazon checks 80,000 items daily and warns sellers who don't match the lowest price, as detailed in the Amazon Business Pricing Policy.
Some marketplace sellers try to win by lowering prices and playing with shipping costs. At the same time, others offer unauthorized product sets, which can diminish your product's value.
Let us discuss the tactics marketplace sellers employ to make your product stand out on the platform.
Adding a note or gift to the package can change a customer's perception of the product's value. And customer perception is more critical on Amazon than in traditional retail stores.
Amazon considers the “customer perception” metric when selecting an Amazon Box Buy winner. So, sellers improve product packaging by adding unauthorized items to encourage a positive customer perception.
But an unauthorized gift can cause problems for you over the long term. The added advantage is absent the next time a customer orders the same product; it may need to be clarified. This could reduce sales and harm your brand image.
When it comes to customer service, retailers vary in their approach. But an Amazon seller’s customer response rate remains a vital metric in the Amazon Buy Box bid process.
Essentially, faster overall responses lead to higher product rankings. And this includes responding to customer messages and queries on the platform.
Amazon tracks your responses and determines your response rate over a 90-day window. Successful sellers maintain a response rate of at least 90% within 24 hours.
That said, winning the Amazon Buy Box is more than just responding to messages timeously. It also means fast shipping, excellent support, and consistent delivery times.
With Amazon Buy Box, your retailers on Amazon are pitted against each other, leaving your customers and brand to suffer. And this Buy Box competition can bring about the unwanted four horsemen problems discussed in a previous post. To illustrate this, let's look at how But Box competition played out for our client, whom we’ll call “Secret Sauce.”
Secret Sauce planned to use one Amazon marketplace seller/retailer in each corner of the US to sell on Amazon. While it seemed like a good idea, each seller had their local market bias.
This made it incredibly difficult to ensure the desired brand attention on Amazon. As a result, Secret Sauce was diluted. And their value was cut by 200% before they teamed up with us.
All sellers compete in a worldwide market but have different sales strategies. Consistency is critical. And you must manage your Amazon marketing from a central point to prevent your sellers from competing for the Amazon Buy Box.
That’s why we recommend moving to a sole retailer. Ideally, an exclusive retailer that can also handle your Amazon brand management. This centralized decision-making approach is most effective in preventing the four horsemen of bad sellers from rearing their ugly heads.
It’s a strategy that worked perfectly for Secret Sauce. Our expert team created a cohesive narrative for the brand. As such, we established the brand’s voice and delivered consistent messaging across all their products.
The result? Secret Sauce only has one dedicated Amazon seller: My Retail World. And with us, they’ve seen more than 20% growth. In addition, we’ve helped Secret Sauce launch an entirely new product and tripled its revenue.
Seeing success when you sell on Amazon requires a careful balance between competition, customer perception, and brand consistency. It's about evolving past seller competition to craft a customer-centric brand that harmonizes all stages of the selling process.
As exemplified in our "Secret Sauce" case study, an exclusive Amazon seller with a comprehensive brand management approach is most beneficial. After all, customer experience and brand consistency will ultimately reinforce your long-term success on Amazon.
