Standing Out in a Third-Party Marketplace: Guide for DTC Brands
Listing products on a third-party marketplace can make some eCommerce directors feel like all of their hard work was done in vain. You spend years carving out a brand identity and creating an exceptional user experience, all for it to be drowned out on a platform where few shoppers seem to notice your brand.
But your brand needn’t get lost in the crowd.
While some eCommerce companies will always view third-party marketplaces as a necessary evil, the vast majority of brands should see them as a huge opportunity. Working with an established third-party marketplace like Amazon, eBay or Etsy doesn’t have to mean selling out your brand or throwing away your carefully designed buyer journeys.
Here’s how eCommerce brands can have their cake and eat it, too.
The Risks and Rewards of Third-Party Marketplaces
DTC brands are understandably wary of third-party marketplaces, especially Amazon, because they don’t want to get cut out of the customer relationship.
“Brands are starting to helplessly watch as Amazon offers cheaper versions of their products and sells them directly to consumers,” writes Cie Digital Labs CEO Anderee Berengian. “Consumers are fine with that because they trust Amazon. Not having a direct relationship with the consumer puts brands at the mercy of anyone who does.”
Brands also risk losing out on valuable data when they sell through third parties. Direct feedback and data are two of the most valuable aspects of DTC sales, Marketplace Pulse Founder Joe Kaziukėnas points out. “It is the two-way feedback loop which makes those brands work. It is also the frequency and speed of interactions with actual consumers, which make them nimble.”
There are, however, significant benefits to selling on a third-party marketplace. “With a marketplace you are hooking into an existing traffic machine rather than trying to find customers on your own, which is much harder and more expensive,” points out BestSelf Co Co-founder and CEO Cathryn Lavery. Most eCommerce brands would find it prohibitively expensive to even attempt to generate the kind of traffic that Amazon and eBay do.
Further, Amazon is beginning to offer more features to third-party sellers, writes Digiday’s Hilary Milnes. That’s because the company has realized it makes more money from other people selling on its platform than it does selling its own products.
Amazon business managers report that the platform has opened up the following features:
- Subscribe and Save
- Early Reviewer Program
- Automated couponing
- Better reporting
- All of Amazon’s advertising tools
Third-party platforms are far from a closed shop. There are plenty of opportunities for DTC brands to leverage while keeping their own branding intact.
3 Tips for Selling on Marketplaces Without Compromising Your Brand
Brands can maximize their exposure to the kind of marketplace benefits discussed above while minimizing the downsides and protecting their brand. Use the following three tips to get your brand started down that path.
1. Offer Quality Products Without Competing With Your Own Store
Listing products on Amazon can be a great way to introduce your brand to a huge number of customers, writes Digital Operative’s B.J. Cook. You don’t need to list every one of your products to have an impact, either.
“Identify SKUs you think might do better on Amazon than your DTC website,” Cook says. “Perhaps listing some of your lower-priced or more entry-level SKUs via Amazon would help introduce your brand to that platform’s mass consumer audience, while directing that audience back to your DTC website for a broader selection of products.”
This way, Amazon doesn’t just become a sales platform. It becomes a lead-generation tool.
That’s what Phil Masiello did with his own brand, 800razors.com. “I only sold sets of cartridges and handles,” he writes at PracticalEcommerce. “I did not sell replacement cartridges. I wanted the customers to be exposed to the product on Amazon, but once they liked it, I wanted them to come to my website for the replacement cartridges.”
This didn’t break any guidelines, Masiello notes, but it meant he could turn Amazon’s customers into his own customers.
It’s also the option that Nike has pursued since partnering with Amazon in 2017, notes Quartz reporter Marc Bain. He points to research by Coresight Research and DataWeave that shows Nike dropped from the first to the 11th most-listed clothing and footwear brand on Amazon in the second half of 2018. This was intentional, Bain writes.
“The aim has been to make sure the right products, at the right price points, are in the right channels, which helps to control how shoppers see the brand. Nike might sell its cooler, premium sneakers through Foot Locker, while making less expensive shoes aimed at a more casual consumer available at Macy’s.”
Another option is to launch brands in partnership with platforms like Amazon’s, points out Stephen J. Bronner, News Director at Entrepreneur. With a new scheme called Amazon Accelerator, brands are able to expand their offerings through white-labeling to ensure prime positioning in the biggest store in the world.
This is particularly useful for brands that want to offer something new, Bronner notes. “Instead of taking up more pricey retail shelf space, the products occupy a digital space where companies have more room to explain the products’ benefits to customers, as opposed to fitting information on the back of a box that a customer never picks up.”
2. Make Sure Your Brand Shines Through
There are still ways for eCommerce companies to introduce customers to their branding on third-party platforms.
One way to do this is via Amazon Stores, writes Scalefast Founder and CMO Olivier Schott. “These pages allow brands to create a unique profile to showcase their products through large hero images and videos, as well as highlight the company’s culture and history. Dime Bags, a DTC line of urban backpacks, does an excellent job of showing off its brand functionality and quality on its Amazon Store.”
If you are a member of Amazon’s brand registry, you should also make use of the additional branding features that come with it, writes Best From the Nest’s Robyn Johnson. “With the new Amazon Brand Registry, brands selling on Amazon are given access to a few new and exciting features such as adding extra images and a brand story to its listings to enhance brand awareness and promote customer loyalty.”
Bigger brands may be able to negotiate their own deals with third-party marketplaces. This is the approach that bedding company Buffy and its CEO, Leo Wang, took when negotiating with Amazon. Rather than use the eCommerce platform’s own boxes, Wang got permission to use Buffy-branded boxes instead. On top of this, customers ordering through Amazon also receive a sleep mask as a special thank you.
Adding additional items into the package is another way to introduce marketplace customers to your brand. Bobsled Marketing’s Kiri Masters writes that inserts can be an effective way to show gratitude to customers, ask for a review, or provide a discount code for future purchases.
3. Use Reviews to Your Advantage
If you’re serious about establishing your brand on third-party marketplaces, reviews will be essential. Reviews help increase your in-platform sales, but they can also be used to grow your brand away from the marketplace.
Raj Jana, Founder of JavaPresse Coffee Company, has made Amazon reviews a core part of his business model. “To date, our flagship product on Amazon has attracted over 5.5k reviews — 71 percent of which are five-star. These numbers are no accident, they’re the result of a tireless commitment to exceptional customer service and lasting relationships with loyal fans.”
This number of reviews helps you sell your product, Jana writes, but it also adds to your brand story. “When you can honestly say your company has helped 250,000 people stay grounded through their daily cup of joe, this opens doors for new products and projects.”
Companies like Tuft & Needle have built their business by generating exceptional Amazon reviews, writes investor Marissa Campise. The mattress and bedding brand started selling on Amazon just a few months after they launched their own website.
“The company’s high quality product and high touch customer service yielded stellar ratings, which catapulted their product to the top of Amazon’s search results for mattresses,” Campise notes. This helped fuel company growth, taking Tuft & Needle from $1 million in revenue in 2013 to $9 million in 2014 and $42 million in 2014.
Don’t just track your own reviews, either. BARK, the parent company of BarkBox, has used competitive review tracking to improve and add to its own product lineup, says CEO Matt Meeker. “We used what we could learn from the category players already doing business on Amazon to reverse-engineer our product development.”
Too many DTC brands write off third-party marketplaces without seriously considering how to make the most of them. When you approach them in the right way with the right strategy, however, they can become a valued and profitable sales channel.