In this 2-part blog post, we’ll take a look at the topic of revenue leakage on Amazon and how brands can start plugging the drain and reaping in more profit. Once you know where to look, we’ll present both manual and automated approaches to fixing the problem.
In part 1 of our Plugging Revenue Leakage blog, we talked about how to prevent erroneous “Unavailable” ASINs and suppressed listings on Amazon. We’ll continue the conversation with a discussion about 3P sellers and how to win the buy box against them and prevent duplicate ASINs.
For many brands, unauthorized third-party (3P) sellers of their products are a key source of revenue leakage. This is an issue when 3P sellers take advantage of a brand’s own PDPs to drive sales of their 3P listings. Managing 3P variants is a lot like the whack-a-mole game. You may rid them one day only to see them pop back up the next. You need to monitor variants, and once identified, take immediate action to remove the variant.
Manual Solution: Daily monitoring to ensure that no other ASIN variants appear.
- Automation identifies 3P duplications of your offers in real-time. This prevents revenue loss by merging 3P duplicates that lower overall CTR into your existing detail pages, where they rarely win Buybox. It also protects your brand equity from inaccurate or poor content on 3P duplicates
- Find ASINs where 3P sellers are adding variants to PDPs. This prevents revenue loss by eliminating 3P variants that reduce conversion on your product offers.
Lost Buy Box
Losing the Buy Box means that although Amazon has inventory from the manufacturer, it will favor linking the Add to Basket button to a 3rd-party seller. Brands that have a direct sourcing relationship with Amazon (Vendors) may think that they have the rightful claim to the Buy Box. In many instances, however, they will lose the buy box to 3P sellers. This can happen for a variety of reasons, but it usually means that the 3P seller has a good track record and is offering a better price. Amazon explains on their vendor help site how the Buy Box is attributed.
“Sellers set their own product prices in our store. If a product is not priced competitively by a seller, we reserve the right to not feature that offer. Customers can still find all offers on the offer listings page.”
Automated Solution: To mitigate Lost Buy Box revenue, automation and machine learning can detect and identify sellers responsible for the biggest LBB dollar impact, and take corrective actions.
Lost to Unfilled POs
Your purchase order confirmation rate is the rate at which you accept or backorder the units ordered by Amazon. If your PO Acknowledgement to accept or backorder falls below 80% of the quantity for each item ordered, you get hit with a chargeback of 3% of the cost of goods sold for each item you don’t accept or backorder.
Plugging revenue drains on Amazon should be easy, but it’s not. Taking care of all of this can be a huge resource hog. If you have a large ASIN catalog, monitoring for these errors on a daily basis is a huge workload. Take the case of a brand with a 1000+ ASIN catalog. Even with 10 people working 12 hour days, a catalog of this size would require that team to make 7.3 decisions per minute to keep up. It’s not humanly possible.
A tech solution will help solve this and do it at scale. An AI/ML platform purpose-built for optimizing eCommerce operations can help alleviate many of these issues. If you want to learn more about automation and how CommerceIQ can help, drop us a note today at firstname.lastname@example.org.