Anonymous 3P sellers on marketplaces – especially Amazon – are the single-biggest threat to the health of the specialty outdoor industry ecosystem in 2019, he told his members at the Grassroots Connect Show in Denver in early November.
And brands and retailers need to fight back.
Specialty brands and retailers invest a lot of time and money creating a specialty experience to keep the end consumer engaged across multiple channels.
Anonymous third-party sellers are eroding the specialty brand experience and the trust of that consumer. They acquire premium branded products through various means and then resell it on marketplaces like Amazon at discounted prices, without offering the customer care or warranty, and care nothing about the brand equity that retailers and vendors have worked so hard to build.
It's time to take a deep dive into the nature of the problem. It's time for our industry to start policing itself to eradicate these under-cutters. It's time to stop playing whack-a-mole, and clean up our distribution channels.
It won't happen overnight, but it's not as impossible as you might think.
Combatting the biggest retail threat: Part 1
In this special podcast series, SNEWS partnered with Kristin Carpenter-Ogden, founder of Verde Brand Communications and the Channel Mastery podcast to explore all sides of this all-important issue.
In this first episode, Carpenter-Ogden talks with David Howell, managing director of Howell & Associates, who specializes in brand protection in today’s multi-channel marketplace. His firm devises and executes strategies that protect global brands and intellectual property from infringements and violations.
The second guest is Terry Lee, founder and CEO of specialty retailer Gear Coop. Located in Costa Mesa, California. Gear Coop is a rare beast: a premium brick and mortar shop in Costa Mesa, California, with a digital storefront that operates as an authorized third-party seller for many major brands in the outdoor marketplace, including The North Face, Arc'teryx and Petzl, just to name a few.
The 5 big takeaways from this podcast
1 - Make sure your leadership team is aligned (not silo-ed) on your channel compliance and marketplace strategy. Nothing hamstrings positive progress more than infighting within your organization after a strategy has been launched.
2 - Make sure you are publicizing what your company is doing from an investment standpoint on keeping your channel clean. Authorized resellers and retailers will thank you, but your end consumer will be positively effected as well as this type of news builds trust
3 - Don’t combine your company’s MAP policy with your reseller agreement. Howell points out “a policy is posted. Agreements are signed. And by doing so, you have the right to change your policy as often as you want to and most brands do change their policy much more frequently than they change their agreement.
4 - Be willing to have a zero-tolerance policy for MAP offenders and for shutting down anonymous 3P sellers. Consistently being willing to hold the hard line will generate a cleaner channel more quickly and keep it clean, which will help all points of distribution to be healthier.
5 - Consider seeking outside help. The size and scope of anonymous 3P sellers on Amazon and other marketplaces is only growing. The challenges of policing the channel are growing greater than part-time internal help.
Stay tuned next week for the second part of this special podcast series: Retailers depend on brands to create a clean channel, but as anonymous 3P sellers grow in size and scope, that's becoming more challenging for vendors.
In part 2 of this series, you'll hear the perspective of the brand from Jon Rockefeller from Petzl America who shares his struggles and growing challenges arising within brands in enforcing channel compliance and brand protection and calls for a new level of partnership between brands and authorized retailers and resellers.
You'll also meet Fred Dimyan, CEO of Potoosolutions.com. Fred offers incredible insight on the growing scope of the anonymous 3P seller problem along with actionable strategies to bolster a successful Amazon marketplace strategy.