Brands Selling on Amazon: The Three Common Scenarios
Brands and manufacturers selling on Amazon face complex challenges that often go unchecked. At Pathway Products, we typically categorize brands into three scenarios when selling on Amazon.
1. Unchecked Distribution – The Profitability Pitfall:
Big Names, Big Challenges: Many big-name brands sell through their “Broad-Based Distribution” network without specific distribution agreements for online marketplaces. This unchecked approach can lead to a “Profitability Pitfall” with dire consequences.
Price Wars: Third-party sellers obtain inventory through means like liquidation sales, often without the brand's knowledge. Engaging in price wars, they drive brand prices to the ground.
Retail Disruption: Quickly, brands find products being sold for less than they could retail themselves. Other retail channels like hair salons, specialty stores, or big box stores demand better pricing to compete online, leading to decreased margins or even products being taken off brick-and-mortar shelves.
Brand Image Chaos: Beyond pricing, brands suffer a chaotic online presence. Without Amazon's Brand Registry and channel governance, dozens of sellers submit information, leading to a jumbled mess of product listings, eroding trust with potential customers, and causing long-term brand erosion.
2. Direct Listing – A Challenging Turnaround:
Regaining Control: Brands attempt to regain control by listing items through their own seller account, aiming to remove rogue sellers and set up appropriate product configurations.
Complexity Overwhelms: Selling on Amazon proves more intricate than thought, and brands often give up, feeling that the required resources and labor are not worth the effort, sometimes falling back into the first scenario.
3. Direct Sales to Amazon via 1P Relationship – A Tense Partnership:
Invitation-Only Program: Some brands sell directly to Amazon through a 1P relationship, where Amazon handles fulfillment, logistics, and product listings at a fee.
MAP Violation: Amazon often breaks MAP Compliance and refuse to raise product retail prices or negotiate margins, squeezing brands year after year, even as manufacturing and raw material costs rise with inflation.
Lack of Control: Brands often feel powerless in how their product listings, advertising strategies, and overall brand image are displayed, lacking the means to accurately convey their brand story.
The Solution - Pathway Products Partnership:
Selling on Amazon is a minefield, but Pathway Products offers a lifeline. We recognize the ongoing issues and offer a comprehensive partnership, including:
Comprehensive Services: From MAP compliance to SEO, sales growth, supply chain and fulfillment, brand advertising, content creation, and comprehensive brand reporting, we handle it all.
Zero Cost, Exclusive Partnership: We do this at no cost, asking for a profitable wholesale margin and selling exclusivity on select online marketplaces to strategically implement and streamline our processes for the vision and goals that you want to achieve.
Pathway Products isn't just a service provider; we're a partner dedicated to your brand's success. With our vast industry experience, passion, and commitment, we bring enormous value to your Amazon presence.
Together, we'll navigate the complexities of eCommerce, creating a tailored path to success that aligns with your brand identity. Join us, and let's transform potential into achievement, one milestone at a time.
