All too often, we see prices online that are considerably less than that of the RRPs and of those that your brick & mortar retailers are selling at. This causes two problems: Offline retailers complaining about being unable to compete with their online counterparts on price and the decrease in value of your brand.
How it decreases value?
We know you have worked tirelessly on building a quality brand image, through your logo, website, social media, advertising and of course, your products. All of these help influence the perceived quality of a product by the consumer but the pricing of the product will also influence this perceived quality. You would hope then that your retailers and sellers help maintain this image of quality by honouring the pricing you have set out.
A low price may indicate to the customer that the product is a bargain or of lower quality and this perception can stick. This then leads to customers devaluing your brand in the long term and it can seriously affect your brick & mortar retailers. Often times, customers will visit these shops to view a product in person and then purchase online as they can find the product for a lower price. This is a practice called “showrooming” and it can be a dangerous situation for retailers and the brand image as a whole.
How does it happen?
Many brands discover their products listed on Amazon and eBay at prices significantly below RRPs and those prices being honoured by brick & mortar retailers. The reason for this is that predatory sellers source your product, whether that be through distributors or direct from yourselves, and because of the competitiveness of the online marketplaces, the price reductions begin. The “race to the bottom” begins when one seller lowers the price and the rest start to compete by also reducing their prices. This then leads to the devaluation of your brand because of these sellers.
What can be done to stop this?
Online marketplaces are a vital part of a brands sales strategy and should not be discounted for this reason. These marketplaces are growing due to the ease of ordering and vast product ranges that they have available and should be a high value extension of a brand, not a problem.
To stop this happening, it ultimately comes down to controlling distribution and limiting supply to value added resellers who care about the brand. We can help with this by providing the information of the companies devaluing your brand so that you can work out where they are sourcing products and put a stop to it.
About ThrivePlaces
ThrivePlaces are Amazon Marketplace Specialists who help brands grow their sales through the platform. Unlike typical marketing agencies and consulting firms who can charge thousands for their work, we simply earn our income through reselling your products - this ensures that our interests are 100% aligned with yours.
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