3 Ways Rotten Resellers Are Devastating Your Brand’s Value

By: Andrew Schydlowsky (TrackStreet) November 27, 2017

Your brand has enemies. Dissatisfied detractors who may have been a poor fit for a product. Online trolls gleefully penning negative reviews and posting them across the Internet. And, worst of all, Rotten Resellers. In some cases, they’re unauthorized or anonymous resellers selling your products on the Grey Market. In others, they’re outright counterfeiters trying to pass off fake versions of your products as the real thing.

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They employ a list of dirty tricks and questionable tactics that do two things:

  1. Provide them a quick way to profit from the sale of your branded products, regardless of the direction you’ve given in your branding guidelines or pricing policies, and
  2. Decimate your brand’s long-term value, drive down margins of your other resellers and retailers and hurt long-time relationships with your channel partners. This could end up costing you valuable shelf space and sparking a race to the bottom on price that harms your position as a brand that commands a premium price, if left unaddressed.

And because your products are being sold online, on both individual eCommerce sites and marketplaces like Amazon and eBay, your brand is facing these threats literally every minute of every day.

You need to know what the threats are, where they’re coming from, and how to combat them.

Our upcoming webinar — Enemies of Your Brand: 13 Dirty Tricks that Rotten Resellers are using to devastate your brand's value — will provide a comprehensive list of  the most common threats Rotten Resellers pose to your company and what you can do to protect and grow your brand. (Register now.) But here are 3 of key tactics Rotten Resellers are employing against your brand:

  1.   Advertise your products below your approved price policies

In the fierce battle for business online, some of your resellers will find the only lever they use for differentiating themselves from their competitors — who are also selling your products — is price. They are not adding value to the product by promoting  your products with an established sales team, educating and onboarding your customers or packaging the product with other complimentary products that increase the brand’s value. They are just dropping price to capture share against your other resale partners.

As a result, these retailers might give in to temptation from time to time, and drop their prices below the amounts you’ve specified in your reseller pricing policy.

How to protect yourself:

First, if you don’t already have one, you’ll need an effective reseller pricing policy in place. We’ll give you some expert tips on how to draft yours. And if you would like to sign up for our free eBook, How to Draft and Enforce a Successful Reseller Pricing Policy, we’ll equip you with a comprehensive guide that tells you everything you need to know.

Second, you’ll need an effective process for monitoring and enforcing your resale channel across the Internet at all times, to ensure your resellers are all complying with your policy. We’ll give you some expert tips on this as well.

 

  1.   Grey-market Resellers offer your products online and undercut your legitimate resellers.

Another threat to your brand comes from resellers who have no affiliation with your company, but find ways to buy your products cheaply and then retail them for less than your legitimate resellers’ prices. This can cause price wars and even drive long established retailers to sell below your established pricing guidelines just to remain competitive.

In Many cases, Grey Market Resellers are masking their identities and hiding behind a veil of anonymity and blending in to the general chaos on the Internet, selling your products, even though they’re not part of your authorized resale channel and therefore have no vested interest in honoring your support or warranty promises, providing your end-user customers with a positive experience or protecting the interests of your brand.

How to protect yourself:

To combat grey-market sellers, you’ll want a set of policies in place restricting each member of your supply chain — demanding that your distributors or wholesalers sell only to authorized dealers, and that your authorized dealers sell only to end-user customers.

Our webinar will walk you through some key tips for crafting these policies.

 

  1.   Counterfeiters sell imitation versions of your products online.

Yet another ongoing threat to your brand comes from counterfeiters — companies who manufacture or acquire cheap knockoff versions of your products and then try to present them as the genuine article.

Because the Internet makes it easy for crooked operators like this to steal your product’s imagery and sales copy, selling counterfeit goods online represents a rapidly growing segment of the black market.

The risks counterfeiters pose to your brand can be enormous — including scathing comments and negative reviews from furious consumers, lost revenue due to lost trust with shoppers afraid to end up stuck with a bogus version of your products and damage to your relationships with legitimate retailers.

How to protect yourself:

You can lower your brand’s risk of being victimized by counterfeiters by taking steps to secure your company’s intellectual property rights and by implementing an effective enforcement system for identifying and taking action against counterfeiters. Our webinar will give you practical tips for both.


Rotten Resellers got you down? Learn more about threats to your brand posed by their dirty tricks in our upcoming webinar - 13 Dirty Tricks that Rotten Resellers Use to Devastate Your Brand’s Value Register now.

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