18 January 2017

The challenging relationship between brand and retailers

The relationship between the brand and the retailer has changed a lot in recent years. Thanks to the Internet, online shopping has seen a massive increase and there are countless online retailers. Today it’s easy to find a very good deal on the Internet with prices far below those of the brand. In this regard, it is very important for the brand to know at which price retailers are selling the items online.
While some years ago this process could’ve been done manually, today it is no longer possible. Monitoring every single retailer would require a huge effort in terms of costs and time.

The Internet has changed the idea we used to have about the traditional business, transforming it into something more enjoyable, easier and more convenient. While online retailers are growing, we can see a correlated growth in competition and in the range of products that can be found on the Internet.

However, e-commerce is a kind of business where everyone can sell everything, and this system makes brands struggle to monitor all the retailers. It’s well known that if an item is sold at a price of 70% off, it is an issue and can damage the brand’s image.
Just to give an example, we can consider Amazon, which is not interested in respecting the pricing rules established by the brand, but only to get more and more income. The same happens for some retailers that, in order to increase their income, apply a very low price.

This is why a tracking tool is important. Competitoor can give you a better idea of the price applied to your products. Here are some benefits linked to this kind of solution:

1. Get to know all your retailers

Thanks to a tracking tool, we are able to know every single online retailer. Companies think they know who their retailers are, but that’s not actually the case. For this reason, monitoring retailers is not as easy as you may think, especially when you discover new ones you didn’t know about before.
Thanks to Competitoor, you can also discover unauthorized retailers who often price the item in a way that can affect the quality of the brand.

2. Check that your pricing policies are followed

Usually, brands indicate some pricing rules that retailers should follow, but very often this doesn’t happen. Lots of retailers propose a price far below the minimum price allowed by the brand, sacrificing the profit.
For this reason, it’s very important to know in real time when our product is sold at a price that damages the brand’s image and perception of quality. In this regard, Competitoor allows you to name a specific threshold under which you will be immediately informed if a retailer exceeds it.

3. Price wars

Price wars usually arise when retailers are not following the pricing policies established by the brand. Making retailers follow the rules is very important, especially because the brand could be perceived as lacking professionalism and responsibility.
If a retailer discovers that a competitor is applying a lower price to the same item, they will start wondering why the brand is allowing such behavior. As a consequence, the rest of the retailers will start lowering their prices as well, generating a situation that the brand will struggle to resolve.

4. Discover unauthorized retailers

Thanks to a tracking tool, you can discover those retailers that are not actually authorized to sell your product. As a consequence, you will probably also discover counterfeit products.

5. Brand quality

As a brand, you might want your products to be perceived as high quality. But this is not a simple thing to do, and the perception of quality can be destroyed very fast when a retailer sells the product at 70% off without your permission.
For this reason, you will always want to protect your brand’s quality. In order to do so, it’s important to intervene in real-time in a situation that could be harmful to your brand.

6. Establish a better relationship with retailers

Thanks to the interview with Tucano Urbano, we had a better understanding of this 6th topic. Showing the retailers that you care about your products means that you take your business seriously and retailers have the chance to strengthen their relationship with you.

Online business represents an amazing opportunity for those brands and retailers that want to increase their income, and in order to do this, the first step is building a good relationship with your retailers.

 

Online business is constantly increasing, and knowing in real time how our retailers operate is becoming more and more important. Thanks to the Internet, the idea we used to have of traditional business is now surpassed, and for this reason, it is important to protect what we have built through the years. The value and the quality that customers perceive are two of the main features that can convert a visit into a purchase. The price is among the most important aspects as well, and so is the tracking system.

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