Red Flags for Online Sourcing and Selling

Here is a article published by Gifts and Decorative Accessories: 
Ecommerce sales may mean making more money, but for retailers and brands alike, it can also represent serious threats. For manufacturers, maintaining consistent pricing, controlled distribution and brand equity is a challenge. For retailers, selling a brand with too many online sellers can mean lost margins and stagnant inventory. To avoid ecommerce pains, follow these tips.
 

Retailer Checklist

  1. Make sure there are brand protection policies in place. Most good brands have adopted policies to address equity. These include MAP Policies (Minimum Advertised Price) to protect retail margins and perceived value. Authorized reseller policies and distributor agreements deal with too many marketplace sellers.

  2. Do they enforce their policies? Knowing that solid retailers only work with brands that have policies, most brands will say they do. But if they don't enforce them, what's the point? You can tell if they're enforcing MAP by searching some products to see if the advertised prices are in line with the retail margin you expect.

  3. Is the brand over-distributed? Unless it's a killer fad, selling products with too many sellers can get you stuck sitting on inventory. If the brand doesn't have an authorized reseller policy, search Amazon, Walmart or Google Shopping to see how many sellers there are. Take notice of eBay sellers as a red flag for retail arbitrage.

  4. Is there consumer confusion and dissatisfaction? If a product has enough bad reviews, then it probably won't retail well. Check Amazon, Facebook, Instagram, etc. While you're at it, check out the BBB, Ripoff Report and Marketplace seller chats.

  5. Does the brand retail its own products? Although it's a growing trend, do you really want to compete with a seller that makes the product? While some brands do this to maintain consistency in the marketplace, others do it because they make full margins. Not necessarily a recipe for success.
     

Brand-Owner Checklist

  1. Who is the retailer? It's easy to know if a retailer has a brick-and-mortar store, but setting up online stores is easy, so there are many nonprofessionals. Make sure the retailer gives you enough information, then check it out. Signs of nonprofessionals include: P.O. Boxes, personal email addresses and obscure trade references.

  2. How does the retailer treat its customers? Consumers love to complain, but, unfortunately, they will generally blame a brand before they blame a seller. Before you open a new account, look at their reviews and ratings.

  3. How does the retailer behave? Bad seller behavior is easy to spot. If you have a MAP policy, check the retailer's listings for discounts. If you have an authorized reseller agreement, make sure you know everywhere they sell.

  4. Do they sell your type of products? We recommend that you work with retailers that understand your industry and sell mostly within that vertical.
     

Ron Solomon is the president and CEO of MAPP Trap, which helps brands to maintain retail margins and healthy distribution through MAP policies, authorized reseller policies, distributor agreements, and more. 

View the full article here.