Building a global brands of physical products is a challenge whether entry-level or high-class products. In this article, we will check how to build a quality brand image on marketplaces. First step for brands, is to understand some key concepts to build the perfect marketing mix for their online strategy.
What is a brand (in the context of e-commerce marketplaces)?
In this article, the brand is
- the manufacturer of the product, whether they are a B2C ready company or not yet
- or the distributor of several products which together are considered to be “the inventory”.
For this article we will consider that the brand is solely distributing their items on B2C sales channels.
In this guide, I will cover how to build a quality brand image on marketplaces aka “Selling On Amazon” or “SOA” = “Seller Central” vs. Selling to Amazon = using “Vendor Central”.
<quote>Marketplaces damage the brand image</quote>
There is a common thought across upper class manufacturers and brands. From my experience, this is especially popular across fashion brands in Europe and Germany.
Manufacturers are seeing the devil in Marketplaces and categorically refuse to push their inventory there as they are concerned that it may damage the brand image:
“I don’t want to sell on Amazon. Marketplaces will damage my brand’s image.”
My answer is simple: It’s important to understand the difference between “Selling On Amazon” or “SOA” = “Seller Central” vs. selling to Amazon = using “Vendor Central”.
Selling on a marketplace vs. selling to a marketplace
Most of the modern e-commerce marketplaces have a retail department. A department which is selling items on the marketplace like any third-party sellers can do.
Cdiscount.com, the French marketplace from Casino group offers on their store items sold by Cdiscount and sold by 3rd parties on their marketplace C le marché. They also offer to take care of the logistics for their sellers through Clogistique.
This is a very similar approach to Amazon marketplace where items can be
- sold and dispatched by Amazon
- sold by X (third-party) and dispatched by Amazon
- sold and dispatched by X (third-party)
Selling to the retail department of a marketplace
- It’s easy: they take care of everything
- It’s qualitative in terms of data: they will setup the product detail pages
- No need to manage customer contact during the order process
- No need to manage customer returns
- When the deal is closed, manufacturers have to ship it to their warehouse. They usually tend to order low quantity to ensure fast rotation of products in their warehouses, the best way to guarantee ROI for their logistics
- When the goods are sent, they are sent. Marketplace’s retail department can apply their pricing algorithm to your products. This may not be inline with your pricing strategy
- International marketplaces may forward part of your non fast rotating inventory to other countries. This may not be inline with your global product line strategy. Also those items may be heavily discounted, building a cheap image on markets where products never launched before.
- Payments usually happens way after the goods have been sold
Selling to marketplaces is entering deep water. While it should be considered for mass entry-level products, I would recommend upper class brands to stay outside of that game and keep control of their distribution.
Keep control by selling on a marketplace (vs. selling to a marketplace)
- Brands keep full control on data quality
- Brands keep full control on customer experience
- Brands keep full control on retail strategy
- Brands keep full control on price strategy
- Technically managing: requires stock management, product data management, customer care and logistics.
Fortunately, there are tools of choice to help sellers deliver at each step of the sales process.
Selling on marketplaces allow brands and manufacturers to keep a full control of their retail strategy. Selling on marketplaces is on of the pillars of a well conceived online marketing mix.
Marketplaces should always be part of the marketing mix
Marketplaces should always be part of the marketing mix to develop a brand image online as they enable brands and manufacturers to:
- reach the target audience, fast
- get started with direct B2C and B2B sales on a global scales without intermediaries
- offer a localised customer experience (language, payment methods etc.)
- have a reliable sales channel with 100% uptime 24/7
- reach audience that brands wouldn’t reach due to customer’s loyalty
- scale while levelling up e-commerce sales
There are many e-commerce marketplaces out there with different product. I will shortly publish an article about choosing the right marketplace for your products and update the link here.
So if you need a hand with data management, connections to various sales channels and building an international brand strategy, hit reply and I will be in touch.