20 Apr How to Solve the Problem of Unauthorized and Unknown Sellers
Unknown sellers of your products – these anonymous dealers can sometimes add a pleasant surprise to your actual sales numbers. As long as you’ve still got all of your authorized sellers too, what’s not to love about more companies selling your products?
In actuality, dealers you don’t know can cause significant problems for your business. You might see well-known retailers drop their prices below your minimum advertised price, but you won’t know whose prices they’re matching. For example, Amazon is infamous for matching prices, but they are rarely the retailer who drops first. It’s the anonymous, unknown sellers who are setting off price cascading where you can’t see them.
Furthermore, if you think having more retailers offering your products is a plus, think again. Amazon’s Buy Box includes only the top three sellers, and Google’s paid advertising has only limited space for ads on the first page. The more retailers try to compete for the Buy Box, the more temptation there is to drive prices down – and the more retailers are spending on paid advertising, the more they will want to cut prices to generate more revenue in order to cover their costs.
Strategies for Phasing out Unauthorized Retailers
Here are two necessary actions you should take to move toward eradicating your business of unknown sellers:
- Use ORIS Intel’s PROWL to monitor for MAP violators and identify unauthorized sellers. It’s impossible to sanction minimum advertised price policy violators if you don’t know who they are. PROWL, a SaaS monitoring tool, has the capability to discover anonymous sellers of your product and provides information on parent companies as well as contact information so you’re able to communicate with them.
- Enforce your MAP. By showing minimum advertised price violators that you take your policy seriously, you can reduce your number of sellers simply because violating dealers aren’t willing to advertise any higher. You’ll also be able to stop price cascading by sanctioning the first violator right away, rather than having to wait until a larger retailer matches a price drop.
Your authorized sellers will take notice of your behavior and will be more willing to promote your brand and put additional effort into customer service, knowing that you will not allow other sellers to advertise for lower prices.
To learn how athletic apparel company 2XU made similar changes and aggressively weeded out unauthorized sellers, see our case study.