Why Brands should sell on eBay and Amazon
Jul-2009
I recently had a bit of a run in with one of my suppliers, sleepytot. Â They have decided to stop supplying companies who sell their products on eBay and Amazon or those that sell below the RRP. Â I’m not sure if it is strictly speaking legal to constrain the channels which retailers use, or their prices, but anyway, lets look at the two sides of this arguement. I will try, and almost definitely fail to give a balanced view.
The reasons normally given for not wanting items sold on eBay/Amazon are they it devalues the brand, mainly for two reasons
- eBay is seen as disreputable in some way. Â I suppose as eBay sells such a wide range of items including new, old and yes, fakes, it is not seen as the kind of neighbourhood people want their brand hanging out in
- Prices. Â Prices on eBay are rarely the RRP and their don’t want their offline and off-marketplace customers to be undercut.
Here are my reasons why brands should allow their products to be sold on eBay and Amazon
- They are going to be sold their anyway. Â There is no way they can stop the sale of second hand items
- International exposure. Â A significant propotion of marketplace activity is international
- Search exposure. Â For any given product search, eBay and Amazon items will probably rank quite highly
- Additional sales opportunities. Â The more a product can get in front of customers, the more chances there are for a sale.
As a final observation, in my experience it is the smaller (and unfortunately smaller minded) manufacturers who have kittens about their products going on marketplaces. Â The larger brands are much more savvy.
Some hard figures for you. Â In the past year I have sold 56 sleepytots, 30 of which were on eBay, 4 on Amazon and 22 on hellobabydirect.co.uk. Â I think that this shows that any merchant that dismisses eBay and Amazon is missing out on sales.
1. “There is no way they can stop the sale of second hand items” Agree. Many resale and consignment brick & mortar shops depend on eBay for selling new and higher end products.
2. The free multi-channel marketing exposure for the “Brand” means new customers buying at “introductory discount” prices they can afford. Just think of it as a sale. Once the new customers get hooked on the better quality, style, and features, they may pay retail next time.
Brands do have good reason to control the distribution of their products. A dedicated dealer network is built by a company to promote, sell, setup and service a product. Cutting sales from those dealers devalues the product line that they have helped to build. Once dealers see a loss in value for selling a product, they will move on to other product lines. The Brand then loses the people that can service problems, promote their products and keep their Brand growing. Try getting service from an ebay store, if that merchant is even selling the product any more.
The brands that figure out that protecting their dealers is a wise move are those that will thrive.