The Issue Facing Brands
Most brands do not have mastery of their channels of distribution and do not properly vet or monitor the accounts they service or distributors they use. Such lack of procedures and oversight allows unauthorized sellers to obtain authentic product (either directly or indirectly from a brand’s distribution channel) and resell it at prices below MSRP; undermining the brand’s pricing integrity. Such activity causes worldwide price disruption for the brand because marketplaces such as Amazon and eBay – where this product often appears – are visited by, and ship to, customers and countries throughout the world. For brands that do not distribute globally, international distribution is by default serviced by unauthorized sellers and for those that do, it creates unwanted pricing competition for their authorized global partners.
In most cases, unauthorized sellers do not care about brand presentation or providing a great customer experience. They simply want to sell the product they procured through whatever means necessary. This not only undermines a brand’s pricing strategy (if it is discounted), it damages the overall brand perception because there is no concern for providing accurate product information or images that fit a brand’s style guide. Additionally, this unauthorized activity causes unnecessary friction with a brand’s other distributors and authorized partners globally, because their prices are undercut and they invest significant money to maintain a brand’s image and product presentation – both on and offline.
Cause & Effect
There are many ways in which unauthorized sellers procure product. Product can be transshipped in or out of the country of operation, resold to other distributors or unauthorized accounts or sold by the account themselves online using a different DBA. All of these activities are ultimately the responsibility of the brand &/or distribution partner to both prevent and stop. When such activity is prevalent in the marketplace, it diminishes the brand’s desirability and ability to sell through authorized channels. This ultimately decreases sales for everyone and decreases brand value.
The mere act of shipping product to an account or distributor can trigger a chain of events that damages the brand. If a brand is not continually obsessing about and monitoring their distribution channel (both accounts and distributors), they may be inadvertently supplying unauthorized sellers and causing both short and long-term damage to their brand.
Clean Channel Consulting partners with brands to identify if there are presently any leaks in their distribution channel; develops protocol to follow if leaks occur and puts procedures in place to prevent future leaks from occurring. As long as a brand is desirable, they will always be at risk of supplying unauthorized sellers who are actively seeking to procure product and must have procedures in place to manage the situation when such leaks occur to limit the damage caused. It is imperative for brands to be diligent in all of their account activities and obsessively review and monitor their channels.
MAP policies are expensive, and ineffective, band aids that do not address the root cause – that the unauthorized product is coming from the brand’s distribution channel – and unnecessarily disadvantage and punish authorized partners. Clean Channel Consulting goes beyond simple channel monitoring and managing the process for brand. They provide brands themselves with the tools they need to successfully protect the brand using proactive and scalable methods.
Channel Monitoring Service
Clean Channel Consulting offers a comprehensive, automated monitoring service. The service is critical for brands to understand the availability and pricing of their product in the marketplace and how these frequently change. It is particularly useful for brands that sell on, or have concerns about, online marketplaces such as Amazon, eBay and Newegg. The service monitors an entire brand or a specific set of styles and provides reporting on availability, pricing, seller information and buy box ownership. The reports can easily be manipulated to show the average discount on a site, to monitor the assortment or discount offered by a specific seller and can even be used to check data quality on marketplaces such as Amazon. It is used by brands to monitor both authorized and unauthorized sites and sellers.