Why it Makes Sense to Have Fewer Amazon Sellers

The prevailing logic is that the more people you have selling your products, the better. After all, you’re going to attract more sales with more people doing the leg work, right?

Wrong.

Whilst this may be the case in other sales channels, it is not the case on Amazon due to the way the site works.

Amazon is basically a very large search engine. it is like Google but for products only. What this means is that sales volume is a function of the number of search queries for similar products, not of the number of sellers shifting products. This may be counter-intuitive if you’re used to a traditional distribution network such as high street retail outlets whereby the number of outlets drives sales as long as there is sufficient demand.

On Amazon, demand is unified through the single search engine to the point where the only real impact that sellers can make, aside from advertising, is in ensuring that high quality listings drive sales conversion against your competitor’s products. If a single product listing has fifteen people competing for a share of the sales, individual sellers are unlikely to optimise listings since they only get a fraction of any subsequent growth.

In fact, the only response you are likely to see from multiple sellers is increased competition leading to a race to the bottom on price, violating minimum advertised pricing policies and upsetting your brick and mortar retail customers.

In addition, with fifteen sellers all competing for a share of sales you will have inconsistent customer service experiences as they all do things very differently. In fact, the only consistency you are likely to see is really poor levels of customer service. If you currently have products listed on Amazon with multiple resellers I invite you to go and have a look at the one- and two-star negative reviews of your product. How many responses do you see from your re-sellers? In an ideal world your re-sellers would have processes in place to deal with customer problems before they are driven to write a negative review but should it go this far they should be responding to demonstrate some level of after sales support associated with your brand.

Exerting some control over the number of re-sellers on Amazon is key to driving sales growth whilst maintaining profit margin and maintaining your relationships with brick and mortar retail partners.

At Bodhi & Digby we are committed to working with key brands to help drive profitable sales growth on Amazon.