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Why Amazon Retail Isn't Brand Loyal

Apr 3, 2018 10:21:17 AM

Blogpost_Why Amazon Isn't Brand Loyal

When brands start to sell their products on Amazon’s site through Amazon representation, it can seem like there are only positives in the relationship. After all, Amazon handles everything from marketing to fulfillment to customer service, leaving the brand to sit back and watch the sales roll in. Amazon even handles shipping and returns, making the process even easier for the seller.

Unfortunately, however, because Amazon insists on owning the buy box for products they sell, product MAP policies tend to go out the window quite quickly. Amazon will price products at whatever it takes to win the buy box, even if that means going well below MAP policy prices. Additionally, many brands are hit with charges and fees for ‘advertising on Amazon’ without knowing how much or what the bill is actually for. Brands quickly realize that Amazon is not brand loyal, and that the real winner in every case is Amazon.

Amazon’s ‘Do What It Takes’ Attitude

If a product or brand is doing well on the platform, the Amazon team will put quite an effort behind driving up sales, even if this means dropping the price well below wholesale. In the worst-case scenarios, Amazon will actively hunt out grey-market distributors of a certain product and buy it cheaper than market value, therefore cutting the brand out of the equation entirely. When this happens, brands face a steep uphill battle to winning back ownership of the product and the buy box on Amazon.

Brands looking to or currently selling products on Amazon via first party Amazon Retail relationships should be well aware of how Amazon views its brand relationships. Amazon is too big to worry about brand loyalty, and often the first to feel the negative impact are small brands and retailers. Without the tools and resources to accurately represent a product first-hand on Amazon, brands can fall short of competitors, or fall victim to Amazon MAP policy violations and knockoffs.

Partner with Brand Loyal Sellers

Working with a single third party seller can help eliminate the risk of falling out of favor on Amazon by protecting both the products sold and the brand name behind the products. Single sellers such as SupplyKick work as the sole seller of individual products on Amazon and strategically price products to both win the buy box and discourage competition. Single sellers are completely brand loyal because they act as the sole owner and seller of a certain product on Amazon, going in for the full risk even over the brand itself.

You can learn more about forging true brand-loyal partnerships to sell on Amazon by requesting your personal demo of SupplyKick today. Learn more now.

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