The eCommerce landscape can be a battlefield, and one of the fiercest adversaries brands face is the reseller. Resellers typically buy products in bulk, often at discounted rates, and then resell them at a markup on various online platforms. While reselling can be a legitimate business model, it poses significant challenges for brands looking to maintain control over their pricing, brand image, and customer experience.
Reselling can be an attractive business opportunity for individuals seeking flexible income streams or entrepreneurs looking to capitalize on market demand for popular products. Resale volume in the United States grew by about 7.5% in 2023, and is expected to grow to $107.2 billion by 2026, as can be seen in the graph to the right. Resellers often leverage arbitrage opportunities, exploiting price differentials between various online platforms or geographic regions to turn a profit. Additionally, some resellers specialize in acquiring limited edition or hard-to-find items, creating scarcity and driving up prices in the secondary market. While resellers may provide consumers with access to a broader range of products, their presence can dilute brand value, erode profit margins, and undermine brand control.
Resellers can have a profound impact on brands’ eCommerce strategies, disrupting pricing dynamics, cannibalizing sales, and tarnishing brand reputation. eCommerce brands should approach resellers with caution due to several potential pitfalls.
Firstly, resellers often engage in price competition, undercutting official brand prices and diminishing product value, leading to reduced profit margins. Additionally, resellers may not uphold the brand’s standards for customer service or product quality, tarnishing the brand’s reputation and eroding consumer trust.
Moreover, selling through unauthorized channels can result in a loss of control over distribution channels, pricing strategies, and brand messaging, causing conflicts and inconsistencies in the customer experience.
Furthermore, resellers may engage in illegal activities such as selling counterfeit goods or engaging in fraudulent transactions, posing legal and regulatory risks for the brand. Customer confusion may arise from multiple sellers offering the same products on different platforms, impacting sales and credibility. Lastly, products sold by unauthorized resellers may not be eligible for manufacturer warranties or after-sales support, leading to customer frustration and negative word-of-mouth.
To mitigate these risks, eCommerce brands must remain vigilant in monitoring and managing their distribution channels, pricing policies, and brand reputation.
Battling resellers across eCommerce marketplaces requires a multi-faceted approach that combines proactive pricing strategies, channel management tactics, brand protection measures, and customer engagement initiatives. In the relentless struggle for supremacy in the eCommerce arena, brands must remain vigilant, adaptable, and customer-centric to emerge victorious in the battle against resellers.
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aiCommerce is a global digital marketing agency with a focus on retail and eCommerce marketplaces. Started by three digital marketing experts, aiCommerce is primed with decades of digital marketing experience and backed by our 90-day grow and know guarantee, we can help your brand grow across eCommerce channels to gain brand awareness and increase sales! Now is the perfect time to utilize our eCommerce experts to help grow your business.
