Reiser's Pieces

Have you ever wondered about the significance of Aaron Paul’s “no half-measures” tattoo? Rewatch Season 3 of “Breaking Bad” (great show, by the way), and you’ll encounter a powerful story with tragic consequences, told by Mike, who ends it saying, “I chose a half-measure when I should have gone all the way. I’ll never make that mistake again. No more half-measures, Walter.”

This notion of abandoning half-measures is particularly relevant in the e-commerce landscape, where well-intentioned but ineffective attempts to curb unauthorized resellers are rampant.

These bad actors infiltrate platforms like Amazon, sourcing products through various means, such as liquidation sales, gray markets and counterfeiting, ultimately stealing the coveted Buy Box.

Unauthorized resellers wreak havoc by undercutting prices, creating duplicate listings and causing channel conflicts that significantly impact brand sales and erode profit margins. The repercussions go beyond financial concerns, extending to the safety, efficacy and legitimacy of products. The result: inferior quality, subpar service, shipping issues and a negative overall buying experience that damages the brand equity painstakingly built over time.

Marketplaces like Amazon are making efforts to regain control, but with nearly 3,000 new sellers creating accounts daily on Amazon alone, totaling 9.5 million sellers, the challenge remains daunting. Brands must take the lead in protecting themselves. Drawing from successful experiences with our clients, it’s evident that a comprehensive, multi­pronged approach is necessary to clean up the e-commerce landscape. No more half-measures!

Here are crucial steps to consider in this battle:

• Third-party mitigation and invoice discovery: Utilize scalable technology platforms to identify and remove unauthorized 3P resellers. Understand who is selling your products, the types of products involved, and whether they are new or refurbished. This approach helps gain control over the overwhelming task of tracking resellers.

• Cease and desist letters — but don’t stop there: While sending cease and desist letters is a start, it’s not the endpoint. Employ targeted invoice discovery processes to identify precise sources of product supply. This goes beyond merely addressing the symptoms and gets to the root of the problem.

• Evaluate supply policies and tactics — fix the leak(s): Scrutinize promotional programs, distributor and reseller management, agreements and tactics to identify gaps affecting the 3P reseller landscape. This thorough examination is necessary to understand and rectify the factors contributing to the problem.

• Root cause analysis on diversion: Engage with vendors, promotional partners and internal stakeholders to conduct a root cause analysis on diversion. This includes reviewing data on sales, shipments and promotional activities for selected items and accounts. Identifying the source of the issue is crucial for implementing effective solutions.

• Optimize to control and mitigate inventory diversion: Based on expert analysis, make policy, process and tool changes to mitigate 3P reseller pressure. This involves implementing more-effective methods for monitoring product listings and prices, scrutinizing distribution agreements and minimum advertised price (MAP) policies, and leveraging Amazon tools to ensure authenticity and remove counterfeit listings.

Doubting whether combating diversion is worth the effort? Consider these success stories: A health and beauty company, grappling with unauthorized resellers, closed nearly 70% of unauthorized Amazon listings and experienced a 10% improvement in the Buy Box. Similarly, a CPG company, facing price compression and Buy Box loss, identified and shut down inventory leak sources, eliminating 90% of unauthorized resellers.

It’s time to reclaim the Buy Box from e-commerce bad actors. No more half-measures, Walter. Adopt a comprehensive strategy to safeguard your brand sales, protect profit margins, and enhance customer perception.

Jason Reiser is president of Market Performance Group; marketperformance­group.com.