Winning the new channel war on Amazon and third-party platforms

Abstract

The top online marketplaces in the world, including Alibaba, Amazon, and eBay, sold $2.7 trillion in 2020, or 62% of global web sales that year. Despite the promise of unfettered access to customers, the reality is that most sellers struggle with unprecedented and unauthorized rogue resellers. These often anonymous, third-party individuals and firms may not provide the quality experiences aligned with customers’ expectations of a brand and often market their goods in competition with trusted partners. This requires a systematic battle plan to effectively protect the seller’s brand equity, service promise, and authorized distribution network. We describe the channel war that is at work and the forces fueling its development. We explain how rogue reseller activities drive down pricing, increase channel competition and conflict, impact the customer experience, and harm brand equity. We recommend revising product policies, procedures, and agreements to begin to differentiate products from those sold by unauthorized parties. We also recommend a legal strategy to complement these efforts. Critical steps include regular and active enforcement as well as implementing services, benefits, and quality controls for the brand’s products that cannot be replicated by unauthorized sellers and requiring authorized distributors and retailers to maintain those benefits and controls.