Introduction
As a brand owner, marketing manager, or sales manager, you pour countless hours into crafting a truly amazing brand filled with unique, high-quality products that change or improve customers' lives. However, as your brand begins to rise in popularity, your products somehow start to become available for sale on Amazon. Before you know it, those products become riddled with poor reviews, terrible imagery, and incredibly inconsistent pricing, all harming the same brand and products that you have devoted so much time to perfecting… Thankfully, Movement Retail has developed a uniquely tailored solution to turn the tides and grant you full control over your brand on Amazon!
What is “3P Migration” and Why is it Necessary?
3P Migration involves transitioning from reliance on third-party sellers to managing the distribution and representation of your products directly on the platform. This means selling on Amazon without any intermediaries while establishing a presence that perfectly aligns with how your brand is represented elsewhere.
Making the leap to selling directly on Amazon offers a plethora of advantages. First and foremost, the ability to implement customized marketing and branding strategies is a game-changer. By taking control of your product listings' imagery and copy, you as the brand owner can dictate precisely how your products are displayed. This eliminates the influence of unauthorized sellers on Amazon (i.e. third-party resellers), ensuring that you retain full control over the narrative of both your brand and your brand’s products own products. With over 73 MILLION users browsing the platform every day, this level of control is crucial for building and maintaining a strong and consistent brand identity.
The act of 3P Migration also grants you increased control over the retail pricing of your products. No longer will your brand be subject to unauthorized third-party resellers deciding your product prices and undermining their perceived value!
Let’s talk about data. By gaining full control of your brand’s presence on Amazon you are granted access to direct customer feedback along with a myriad of sales data that is currently unavailable to you. Imagine 5-7% of your customers reaching out to you directly explaining exactly what they like and dislike about your products. Pair these insights with a clear cut understanding of exactly how customers are shopping for your brand and you’ve got a truly priceless set of levers you can pull to not only grow but quickly outpace and outperform your competition.
All of these benefits are great, right? Now what if you could actually INCREASE your profit margins while reaping all of the above-mentioned rewards? Let’s do some math really fast:
- Your brand sells a product at a price point of $35
- That product is being sold on Amazon by unauthorized resellers to the tune of 2,000 units per month
- On average, most resellers on Amazon shoot for a 10% profit margin. From this, we can deduce that these resellers are buying that product from your brand at a price of $17.58 (with Amazon’s fees totaling $13.92)
- Supporting calculation: ($35 - $13.92) - ($35 * 0.1)
- Assuming you as the brand owner shoot for an average of a 30% wholesale margin, your COGS for this unit sits around $12.31
- Supporting calculation: $17.58 * 0.7
- With that, you are currently profiting around $10,548 each month on this SKU's Amazon sales
- Supporting calculation: ($17.58 - $12.31) * 2,000
- HOWEVER, if you were to enact a full 3P Migration project, monthly profits would increase to $17,540 - a $6,992 monthly profit increase on ONE SKU!
- Supporting calculation: ($35 - $13.92 - $12.31) * 2,000
Not only do our 3P Migration projects result in firm brand control but they also increase profitability in the process!!
Risks of Not Migrating
Failure to migrate from 3P reliance carries a mountain of risks, as customers often mistake these resellers for the brand itself on platforms like Amazon. This confusion, compounded by varying product prices, questionable product quality, and overall negative customer experiences, erodes the trust that customers both on and off Amazon have in your brand. As a result, your brand's reputation suffers, impacting the development and maintenance of long-lasting customer relationships.
Unfortunately, we see this all too often.
These resellers who distribute your products on Amazon also have complete control of your brand's narrative on the largest e-commerce channel in the United States through product content and customer service inquiries. In almost every case, these resellers do not have near the experience with your products as you do and tend to lead customers astray when they are met with more serious inquiries.
Most importantly, it is worth noting that in many instances, your competitors have already made the switch, grossly outpacing your position on Amazon. The longer these efforts last, the more customers they control, and the more difficult it is for your brand to reclaim its once-dominant position.
This Problem is Not New to Movement Retail
Movement Retail is a Full-Service Amazon Agency that specializes in helping brands transition to becoming the exclusive seller of their products on Amazon. We’ve seen these efforts yield absolutely significant growth for every one of our partners not just on Amazon, but throughout their entire brand!
Take one of our partners who operates in the Personal Care industry for example. Before collaborating with us, said Personal Care brand relied solely on third-party sellers to manage their presence on Amazon. Unfortunately, this led to a major lack in quality control and an inability to update their own product content, preventing them from showcasing and distributing their amazing products the way they deserved to be.
Fast forward 12 months, after implementing an in-house distribution strategy to drive revenue and ensure product quality, the results speak volumes.
Not only have we removed 80% of their resellers from Amazon but we have also driven over $760,000 in revenue for them after creating their account FROM SCATCH!
You may be asking yourself “Since this is a migration project, wouldn’t that mean there was existing revenue on the platform beforehand?” Yes, yes indeed there was. Revenues across the previous 12 months sat just over $345,000. Within the past 12 months, we’ve been able to grow this to just over $1.12M - a 325% increase in revenues, with no plans of slowing down anytime soon!
Results like these are common at Movement Retail across a wide array of product categories such as:
Conclusion
3P Migration offers brands the opportunity to take control of their presence on Amazon, ensuring consistency, trustworthiness, and increased profitability all while actively growing brand awareness and revenues. By transitioning away from third-party sellers, brands can implement tailored marketing strategies, maintain pricing integrity, access valuable customer data, and ultimately drive long-term success. Movement Retail specializes in guiding brands through this transition, as evidenced by success stories like CoreTex's impressive revenue growth. In a competitive landscape where brand equity and customer trust are paramount, 3P Migration isn't just strategic—it's essential. Embrace the opportunity to take charge on Amazon and secure your brand's future success.
How To Get Started
If you and your team are ready to truly take charge of your brand's destiny, simply contact our team and we'll provide you with a full playbook on how to enact a 3P Migration project!
