Why Selling on Amazon with a Single Seller is the Optimal Strategy?

Sellers on Amazon often engage in intense price competition, leveraging both disclosed and hidden rebate strategies. This can result in price undercutting, eroding the value of the brand. Key rebate strategies include:

Disclosed Rebates :

  • Subscribe & Save:

    Multiple sellers may offer inconsistent discounts via Subscribe & Save, which can drive down prices unpredictably and confuse consumers

  • Coupons (Percentage or Dollar Discounts):

    Sellers use coupon strategies to gain a competitive edge, reducing visibility of the true product price.

  • Business Pricing:

    Sellers offer business-specific pricing tiers, including volume discounts, further complicating price consistency across the marketplace.

  • Volume Discounts (Under Business Pricing):

    These discounts can encourage bulk purchases but often push prices below MAP, further devaluing the product.

Hidden Rebates:

Price reductions applied only at checkout are not visible on the product detail page, leading to a mismatch in perceived pricing and MAP violations.

Post-Add-to-Cart Rebates:

The Benefits of Working with a Single Seller:

  • Controlled Competitive Pricing:

    A single seller can strategically adjust pricing, including going below MAP when necessary, without the risk of widespread price erosion across multiple sellers. This ensures that competitive pricing is maintained while protecting the brand's perceived value.

  • Identifying Off-Amazon Sellers Driving Price Drops:

    A single seller can better monitor and identify off-Amazon e-commerce retailers responsible for lowering Amazon’s competitive prices. This allows for a more coordinated effort to stabilize pricing across platforms and safeguard the brand's reputation.

  • Full Utilization of Subscribe & Save:

    Subscribe & Save can be maximized with one seller who can optimize it for repeat customers, increasing customer loyalty and stable recurring revenue. Inconsistent management across sellers dilutes the effectiveness of this program.

  • Control Over Customer Support:

    A single seller allows seamless control over returns, refunds, and other customer service interactions. This ensures the customer experience aligns with the brand’s standards, reduces negative reviews, and enhances overall satisfaction.

  • Brand-Tailored Promotions:

    The exclusivity of one seller enables the brand to run highly targeted promotions, such as abandoned cart campaigns or discounts aimed at specific customer segments, such as high-spend tiers or loyal customers. These promotions are carefully aligned with the brand’s overall strategy.

  • Effective Sponsored Ads Strategy:

    A single seller can strategically manage Sponsored Brand ads to increase visibility and reach while leveraging Sponsored Display ads to capture niche market segments. This unified approach ensures that ad spend is optimized and aligned with the brand's goals.

  • Linking Facebook to Amazon Promotions:

    The brand can integrate social media efforts with Amazon campaigns through an exclusive partnership. For example, Facebook ads can link directly to Amazon promotions, driving highly targeted traffic to the brand’s Amazon listings and increasing conversions.

  • Optimized Ad Spend: Reduced Focus on Branded Keywords:

    With one seller managing the brand’s ad campaigns, ad spending on branded keywords can be reduced, as the brand likely already ranks highly for these terms. Instead, investment can be directed towards non-branded keywords to attract new customers and increase market share.

  • Hybrid Selling Strategy (1P and 3P)

    Working with a single seller also leaves room to implement a hybrid strategy, where the brand can sell directly to Amazon (1P) while maintaining third-party (3P) exclusivity. This strategy allows greater control over traffic directed to the brand’s detail pages and storefront, maximizing exposure and optimizing sales through multiple channels.