Initial situation
The toy manufacturer was faced with a complex challenge: on the one hand, three different distributors were offering the products on Amazon, some under their own labels, which resulted in double listings and country-specific additional sales. In addition, these distributors were supplying Amazon directly as vendors, which led to grey imports, a deterioration in price levels on the platform and negative customer experiences - both online and in offline B2B retail.
Goals
The goal was to stop the downward price spiral of products, create stable and healthy pricing and prevent grey imports.
eBazaaris pursued a transparent communication strategy with the existing distribution partners to inform them about the detrimental effects of the previous distribution structure. It was emphasised that a decentralised distribution structure spanning several countries was detrimental and required a centralised approach. Distributors for whom online trading was not important were persuaded to stop supplying Amazon. Some distributors were reimbursed for the profit lost by not selling on the marketplace in order to take them off the Amazon marketplace. eBazaaris took over these compensation payments, as these could be recouped via the online distribution partners. In this way, the manufacturer was able to utilise the marketplace effectively with a specially selected distribution partner, maintain the brand image, expand the market reach and ensure a stable pricing policy.
Measures
Reduced number
of the distributors on Amazon
Improvement
of the brand image
Pricing control
and restrictions on gray imports
Improvement
of the customer experience
Key takeaway
The strategic realignment of the distribution structure by eBazaaris demonstrates the importance of a clear separation between online and offline sales channels and the effectiveness of financial incentives for distributors to ensure a consistent brand presence and price stability in the e-commerce environment.
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