Promo Proliferation: Short-term Gain but Potential Long-term Pain

You get the itch. Prime Day deals have to be submitted. A lightning deal opportunity just popped up. There’s October Black Friday on Walmart now and “everyone’s doing it.” Oh, how you want to be in the mix and grab that momentary bump in sales.

If your brand is diving headfirst into the marketplace promotional mayhem, be sure you are going into the peak and holiday seasons with your eyes wide open.

Be strategic with your advertising goals

There are certainly benefits to participating in these types of promotional events: seeing a temporary increase in sales, additional traffic to your product listings, making your marketplace representative happy, and the exposure of your brand to a different audience (i.e. bargain shoppers).

Unfortunately, what typically comes with these short-term gains is an elongated dose of long-term pain for the participating brands.

Let’s take a simple apparel brand. The brand jumps in with both feet on the Prime Day opportunity, the Walmart Plus day, the Black Friday 1, 2, and 3 days, and so on. While sales on those days—and likely even the season overall—will be high, in the background, there are potentially 100’s of grey market resellers grabbing product at reduced prices in order to resell it at a later date on even the slimmest of margins.

These rogue resellers can cause your brand a plethora of headaches:

1. Price fighting with your authorized retailers (which leads to lost sales and margin loss for your retail partners and, possibly, the deterioration of the relationship entirely). 
2. Poor brand representation within product listings. 
3. Suppressed BuyBox on Amazon (as Amazon finds other sites with significantly lower prices on your products, it takes away the BuyBox on your listings). What began as a quick sales bump now turns into months (likely years) of identifying, chasing down, communicating with, and (hopefully) removing unauthorized resellers across the web.

Promotional proliferation 

So why and how do any brands participate in these promotions?

The first and most obvious answer is that many brands do not yet grasp the impact of product and promotional proliferation in today’s every-growing ecommerce jungle. The traditional, brick-and-mortar priority of “get product everywhere and do it quickly” to grow your brand is almost flipped on its head when it comes to sustainable online success. Controlled growth is the name of the game online.

Another way brands are able to successfully navigate these promotions is by having just that—control. If your brand has done the foundational legwork to create an enforceable reseller program with levers controlling who is able to sell online and where, and the included pricing policy is widely followed, you can most certainly participate in these types of promotions and maintain control over your brand’s presentation and pricing long-term online.

Finally, brands—regardless of any reseller program implementation—can handle these promotional days shrewdly by posting only discontinued, over-inventoried, or out-of-season items within the promotion. If purchasers (whether genuine or sneaky resellers) are only able to get discontinued product or product that you, as a brand, are not concerned about keeping up at MAP pricing, then it’s a win-win: You participate in the promotion for the visibility and sales bump and simultaneously maintain pricing and brand integrity on items you will continue to lean on moving forward.

If you’d like to learn more about how we partner with brands to protect their presence online, connect with our team of Amazon experts.