Downsides of Working With a Reseller to Sell Your Products on Amazon with Julie Spear - Episode 329
INTERVIEW WITH JULIE SPEAR
DESCRIPTION
In today’s episode, Kiri Masters is joined by Julie Spear, the Head of Retail Services at Acadia.
Kiri Masters and Julie Spear explore the downsides of Amazon resellers, and dissect the reseller model's challenges, discussing control and costs, and why it may not suit your brand.
“The other aspect of it is the appearance of cash flow. Often the partnership with a reseller can be through a purchase order model. And so the idea that you can be paid upfront versus waiting for the sell-through of your products can be appealing from a cash flow perspective for brands.”
KEY TAKEAWAYS
Key Highlights:
- Reseller Model Insights: We define resellers and differentiate between authorized and unauthorized ones, delineating the blurred lines between resellers and agencies.
- Reseller Versus Other Models: Referencing a conversation with Acadia's CEO, Jared Belsky, we contrast resellers with other marketplace strategies.
- Attractiveness of Resellers: Why many brands find resellers appealing despite potential downsides – discussing the lure of expertise, operational ease, and perceived cash flow benefits.
- Brand Vision Conflicts: How a partnership with a reseller might limit a brand’s strategic possibilities, shackle product launches, and blur key data insights.
- Turnover and Terms: Analyzing the effect of resellers' turnover terms on brands, spotlighting the risks of mismatched expectations.
- Case Study: The repercussions of a reseller mismanaging Snow Peak's pricing and the broader implications for brand image.
- Transitional Challenges: The difficulties brands face in moving away from resellers toward direct sales models, such as reasserting brand registry rights and the daunting task of reinstating operational capacity.
- Payment Terms and Paperwork: Unveiling the reality behind the upfront payment attraction and the potential for unfavorable payment terms.
- Direct Sales Comparison: Discussing the financial dynamics between selling through resellers, directly to Amazon, or on the marketplace.
- Brand Control Limitations: Examining the reduced control over brand portrayal, the infrequent updating of product detail pages, and suboptimal SEO practices under reseller partnerships.
- Cost Considerations: Julie Spear breaks down the multiple costs associated with resellers, including media investment, supply chain expenses, and significant fees.
- Partnership Models: Kiri stresses that no singular model is flawless and discusses how revenue-based partnerships could stifle business growth.
- Assortment Selection: Lastly, we touch on the issue of resellers cherry-picking inventory, leaving brands to strategize on marketing and selling the remaining products.
MENTIONED IN THIS EPISODE
Learn more about Acadia
Connect with Kiri Masters
Connect with Julie Spear
