In this episode of Selling on Giants: The eCommerce Marketplace Show, the guest speaker is Will Haire, BellaVix’s cofounder, an expert with extensive experience in the direct-to-consumer retail industry and a proven track record of implementing successful marketing strategies on renowned platforms like Amazon and Walmart, talks about the process of “Unpacking Strategies to Navigate Amazon’s CRAP Policy and the Importance of MAP Policy”.
In the competitive world of eCommerce, maintaining profitability and brand integrity is paramount. Amazon, as a major player in online retail, has stringent policies that can make or break your success on their platform. Two critical aspects to understand are Amazon’s CRAP (Can’t Realize Any Profit) policy and Minimum Advertised Price (MAP) strategy. Amazon’s CRAP policy targets products with low margins, high shipping costs, high return rates, or low price points, making them unprofitable. Meanwhile, a robust MAP policy is essential to maintain price integrity and protect your brand’s values.
In this episode we talk about how these policies impact your eCommerce strategy and provide actionable tips to navigate these challenges effectively. From understanding the importance of a strong MAP policy to implementing wholesale branding strategies and reducing shipping costs, we’ve got you covered. Don’t miss out on “Unpacking Strategies to Navigate Amazon’s CRAP Policy and the Importance of MAP Policy”. Let’s get started!
Key takeaways: / Short Summary:
Amazon’s Crap Policy and Minimum Advertise Price (MAP) Strategy
- Amazon’s Crap Policy targets products with low margins, high shipping costs, high return rates, or low price points, making them unprofitable.
- Amazon measures profitability using the net PPM standard and often designates products as ‘crap’ due to poor MAP policy.
- Brands that let other retailers dictate pricing, leading to significant discounts, risk getting their products designated as ‘crap’ on Amazon.
- A robust MAP policy is essential for maintaining price integrity and protecting brand values, particularly in e-commerce settings.
- Brands with a lot of resellers often encounter issues with Amazon’s Crap Policy, highlighting the need for a solid MAP strategy.
Strategies for Managing Wholesale Branding on Amazon
- Brands primarily make profits from brick and mortar retail or their website and Amazon is a close third in terms of distribution
- Large enough for a team to manage but not large enough to get inventory priorities, a major challenge
- Running a sale for brick and mortar retailers often results in Amazon cutting prices, leading to violation of the minimum advertised price (MAP) policy
- Violation of MAP policy leads to contribution issues and inconsistency in branding due to other sellers jumping on the listing
- Implementing bundling strategy is a recommended approach to alleviate the challenge, especially for beauty or supplement brands
- Selling multi-packs on Amazon via Vendor Central, while selling single pack units on the website, can also help increase average order value and margins
- Hybrid strategy, selling products on both Seller Central and Vendor Central, is another recommended approach to gain better control over pricing and logistics and to address inventory issues
Strategies for Navigating Amazon’s CRAP Policy
- It is important for sellers to avoid issues with the buy box and ensure they are selling products in a reasonable time frame.
- Ways to improve shipping costs, such as using the SIOC certification for heavy items, can lead to cost savings and positive environmental impacts.
- Understanding customer returns and the reasons for high return rates can help improve profitability and customer experience.
- Example of a brand facing packaging issues and how they improved their return rate and profitability by addressing packaging issues.
- Conclusion about the importance of being proactive and adaptable in e-commerce and seeking feedback from customers for improvement.
Or listen to the previous episodes on the different platforms:
Links:
- LinkedIn – Personal: https://www.linkedin.com/in/willhaire/
- Branded – Linkedin: https://www.bellavix.com/
“Selling on Giants: The eCommerce Marketplace Show” is sponsored by BellaVix.
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