Denise Zmuda is the Chief Strategy and Client Success Officer at Vorys eControl. With more than 20 years of experience in the U.S. and across the globe, Denise specializes in developing a wide range of channel management strategies. She leads the company’s Root Cause Diagnostics and Corrective Action team, which is committed to helping brands with their channel compliance efforts, including stopping unauthorized sales at the source.
Denise also spends significant time quantifying the financial impact of uncontrolled online sales, counseling on the enhancement of channel management efforts, and helping organizations to evolve their distribution and related strategies.
Here’s a glimpse of what you’ll learn:
- How selling on the Amazon channel can disrupt your existing relationships with brick-and-mortar retailers and distributors
- The need for clean online channels and consistent branding on and off of Amazon
- The 3-legged stool framework that Buy Box Experts uses to put together a proper Amazon channel strategy
- Denise Zmuda shares the common issues associated with channel governance on Amazon
- How Minimum Advertised Price (MAP) and other online policies impact Amazon sales, and how to resolve policy control issues
- Denise talks about handling over-distribution and the internal and external costs associated with governance and enforcement
- When to stop a retailer from selling their products on Amazon—and the benefits of having an authorized reseller
- How selling on Amazon can help brands reinforce their existing brick-and-mortar businesses
- Legal and business issues brands need to address to tackle their Amazon channel strategies
- Should brands split their catalogue on Amazon to protect their business?
In this episode…
Although the Amazon channel continues to grow everyday, many brands are hesitant to join the marketplace. They see it as a small channel that does not bring in a significant amount of revenue, and therefore choose to ignore it.
However, for brands that decide to take advantage of Amazon’s large marketplace and its popularity among online consumers, there is the challenge of disrupting their existing brick-and-mortar channels. This is largely due to the presence of many unauthorized resellers, as well as various channel governance issues. So what should brands do to control their branding, grow their businesses, and increase their revenue—on and off of the Amazon channel?
In this webinar hosted by Buy Box Experts, James Thomson is joined by Denise Zmuda, the Chief Strategy and Client Success Officer at Vorys eControl, to talk about how brands can control their online presence on the Amazon channel. They discuss the common disruptions brands face when deciding to join the marketplace, the framework they can use to create a proper Amazon channel strategy, and the best ways to regain control of their products from unauthorized resellers. Stay tuned.
Resources Mentioned in this episode
- Buy Box Experts
- Vorys eControl
- Denise Zmuda on LinkedIn
- James Thomson on LinkedIn
- Controlling Your Brand in the Age of Amazon: The Brand Executive’s Playbook For Winning Online by James Thomson and Whitney Gibson
Sponsor for this episode…
Buy Box Experts applies decades of e-commerce experience to successfully manage their clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of their clients’ business fundamentals and their in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity in the marketplace–not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Learn more about Buy Box Experts at BuyBoxExperts.com.
Welcome to the Buy Box Experts podcast we bring to light the unique opportunities brands face in today’s e-commerce world.
James Thomson 0:18
Thank you all for joining us today to chat about the topic of disruption that happens on the Amazon channel when you as a brand, start dealing with Amazon, how does that work? How do you minimize the disruption and all that kind of good stuff? So, my name is James Thomson. I’m joined today by Denise Zmuda. Forward here, Denise, did you want to introduce yourself, please?
Denise Zmuda 0:44
Sure. Um, good morning. Good afternoon, everybody. As James mentioned, I’m Denise Zmuda. I work for Vorys eControl and I’m a channel management expert here at the firm and I help to advise client On a number of channel management issues as it relates to online marketplace sales, I do have a practitioner as a background or have a background as a practitioner at a technology organization who also made the foray into Amazon’s selling where we hadn’t previously done so and had to wrangle with a lot of the issues that we are going to be covering today. So I’ll be covering them from both angles.
James Thomson 1:31
Great. And I’m James Thomson. I work for a company called Buy Box Experts. I had the opportunity to work at Amazon for a number of years on the third party side and got to see firsthand what happens to brands when they have to make this adjustment to starting to sell on Amazon versus having other retailers sell their products on Amazon, whether those are authorized or unauthorized sellers. I’ve actually co authored a book with one of Denise has called on this issue of Controlling Your Brand in the Age of Amazon, I’ll talk about that a little bit later. But this issue of how do brands deal with Amazon, in a situation where, as a new channel for brands, the impact of Amazon can be rather substantial to the overall channel management strategy, the brand? And so as we think about what does it mean for a brand to become more active with the Amazon channel? There are a number of operational financial issues that that come into play that we’re going to cover today in our discussion, and we’ll take it from here so much, let’s let’s start Denise with this big question of, I’m a brand I’ve decided I’m going to be active with the Amazon channel. What do I think about the Amazon channel if quite frankly, I’ve got existing relationships with distributors and retailers? I don’t want to upset them, but I also want to do what’s best for my brand on the Amazon channel. Where do we go?
Denise Zmuda 3:00
Yeah, I think Yeah, it’s a great question. And that’s something that as a practitioner and as I work with clients here at decontrol that I had to in many brands have to wrestle with and the question is, can you do it without disrupting your current brick and mortar retailers and distributors? And I would break that down into two pieces. First and foremost, I will say, Yeah, if you’re going to disrupt your channel, but it really depends on who you’re talking about. And you know, how disruption is viewed. So folks that can be impacted are those selling on brick and mortar in a brick and mortar manner that are already selling on Amazon, those distributors that might be selling to resellers who sell on Amazon themselves, retailers or distributors that are hurting products, like all sorts of different ways in which those folks may be operating on the platform today. And, you know, I think, you know, there’s concern relative to whether or not that brand will hurt the retailer’s existing brick and mortar sales by making a foray into selling on Amazon and other marketplaces. So there’s lots of considerations that have to be taken. You Yeah, under consideration in order to determine where you fall on that spectrum as it relates to the disruption that may end up
James Thomson 4:28
taking place. So let’s just spin on disruption. What are we talking about? I’m thinking there’s potentially sales being diverted to the Amazon channel. There’s potentially issues with different prices on different channels. What other kinds of things do you encapsulate within this concept of disruption?
Denise Zmuda 4:48
I think there’s disruption to the brand itself. I think there’s disruption to you know, the channel at large and so from a brand standpoint, there are a number of brands that I have spoken with. And as a practitioner myself, you know, you just don’t even realize the amount of activity that’s taking place on Amazon. That is, in fact, disrupting your current channels of distribution who may not be operating there that are very important to you. So there is a lot of price erosion that can come from that, that plays off of different channels of distribution. There’s also disruption that happens to you as a brand. So because of the wide open nature of Amazon, as you well know, there are a number of entities that can be selling a brand’s products that you know, just aren’t held to the same quality control standards who are caring for those products and the way in which that you would like your brand to be cared for. And so the consumer experience can be impacted. And that manifests itself when we have bad reviews and all of those things that are really, really transparent to consumers create a lot of confusion in their mind as to whether or not you know they have a handle on their brand.
James Thomson 6:03
Many years ago, I used to run the business of recruiting sellers to the Amazon channel, whether they’re authorized or unauthorized doesn’t make any difference to Amazon. And yet, if someone could show up with a product and sell it work, Amazon’s quite happy to have them on the channel because the more sellers there are selling the same items, the more price competition there is. But also the crazier things get with regards to who’s submitting brand content on those listings and who’s representing your brand on this channel. It doesn’t necessarily have to be an authorized seller. And quite frankly, the disruption that we think of around pricing, there’s also big disruption around the consistency of messages that that customers on Amazon may be seeing when they look at your brand’s materials on Amazon versus what you might be spending millions of dollars and lots of people on your team focused on creating a consistent brand in all of your other so called authors. The right channels. So lots of opportunity for disruption on multiple levels, as I think of what brands are doing today, certainly 2010 2015 still a number of brands that said, Amazon is a small enough channel, I don’t have to worry about it, because it doesn’t represent a lot of sales dollars. You know, that certainly misrepresentations there around number one, actual sales going through this channel versus perceived level of sales. But this issue also again of consistent branding, you may have a number of people who are being first exposed to your brand on Amazon, and they’re seeing whatever shoddy documentation of images and content that an unauthorized seller might be putting on this channel. That creates a problem for your brand, when the customer might then see your brand in another channel. And so, as we think of all these different forms of disruption, the good news is a brand can address all these issues, but it takes Productivity on their part. And also typically a change in the way they think about this Amazon channel, it’s not about whether you as a brand are thinking I am, I am now ready to enter this market versus my brand has already entered this market potentially through a back door, I need to make sure that I control what my brand looks like on this channel. And hence, what the implications are going to be to my other established channels who have high transparency to what’s going on in Amazon, and can understandably get frustrated.
Denise Zmuda 8:34
Yeah, definitely a common scenario for the brands I work with. And as you all know, since we work with each other, yes, from the beginning, when I was a practitioner, it was a bigger mess than I had ever assumed it was because to your example, I just hadn’t been paying attention.
James Thomson 8:51
So take us through, you know, desired and an actual situation here. So that we’re talking the same the same language
Denise Zmuda 9:00
Sure, so I think at the end of the day, any brand wants clean channels, they want their product available to consumers and the way in which they want to buy them. And that can vary. As noted here, in some cases, you have consumers who want to touch and feel the product. So they’re willing to travel to a store and touch and feel that product before they buy it. They may like the convenience of online shopping. And so therefore, they go through those channels, and you want those decisions to be made in in a value added manner, and what I mean by that is I want my shopping experience to be tailored to the way in which I want to shop and so I’m going to pick those channels based on that not necessarily because in one channel, you know, for some reason, it’s significantly lower priced. And as a result of that, you know, I might get lower quality maybe depending on that. So I just really want parody as a brand, right. And I want the shopping experience to be reflective of the brand experience that I want to convey. So,
James Thomson 10:11
guys, this concept of you, the brand may not have set up this Amazon channel, it’s already there. You know, I’m just flipping ahead to the next situation, you may wake up one day to discover my brand is on Amazon. And oh, by the way, as you talked about with this phrase erosion, I don’t know who these people are selling the products on authorized sellers can include an awful lot of different groups of people, they can be authorized retailers who have decided to set up shop under a different company name over here on Amazon, or it made a straight up be product diversion happening. products being sold to people who you’ve never heard of. You have no active direct or indirect relationship with and and yet they’re the ones representing your brand on this channel.
Denise Zmuda 10:55
That’s right. That’s right. It’s not just a price issue. It’s a quality issue. So you know, my direct question As well as those of other clients that we service, you know, you’re shocked to see this dynamic happening. And oftentimes the first time you hear about it is from your brick and mortar channels, you know, what is going on over here? Yeah. And in those cases where you’re not paying attention, once you start to uncover that you experienced exactly what you mentioned, not only is it How are they getting? How are they able to sell it so inexpensively? And how does that impact the way in which they’re investing in the brand and oftentimes, what we find is that they’re not And to your point, it’s just resulting in very shoddy listings. It’s very unclear to the client, what they’re buying, they buy it, they return it, they express poor experiences, and it just becomes a real, you know, brand issue for the manufacturer that they have to manage. Right.
James Thomson 11:53
Okay, so, now the question is, you’ve shown me as a brand that I need to To be more proactive with the Amazon channel, whether that means I as a seller, I’m going to sell direct, or I’m going to work with authorized resellers to, to to represent my brand in this channel. The question then becomes, how do I do this without disrupting the existing relationships that I have with brick and mortar channels and other traditional distributor models?
Denise Zmuda 12:22
I think the fact is, is that just by the mere fact that e-commerce is here and it’s disrupted the market yet you start to have to make choices about your brand that are going to result in change in certain portions of your channel and change is always disruptive. However, it doesn’t necessarily mean that it’s equally disruptive to all four corners of your channel ecosystem. So there are some channels that are very, very thankful, very, very happy when a brand decides that they’re going to take control, right and, you know, really create some border for them. brand, and that will be reflected very well through certain channels of distribution who are very happy for that control.
James Thomson 13:07
So who’s not who’s not gonna be happy when you finally button things up?
Denise Zmuda 13:12
The ones that are gonna be happy are the ones that are on Amazon today or who are supplying sellers that are on Amazon, we traditionally find that retailers and distributors have no interest in operating on Amazon for the most part and understand or can be convinced of the fact that getting control is actually better for the entire ecosystem at the end of the day, you know, they’re very much on board with it. But if we happen to you, and oftentimes we don’t, but if we happen to find distributors and retailers that are selling there today or represent sellers who are the volumes aren’t as big as they think they are, but there’s an emotional talk, you know, component to that discussion, that data has to just follow it,
James Thomson 13:56
right. Okay, so let’s look then one of the models that our companies put together is, what are the different components of decision making that needs to go into figuring out as a brand, how to put a proper Amazon channel strategy together. And we have a framework where we Think of this as a three legged stool where all three legs on the stool need to be in place. If you only do two or one of the legs, the whole thing falls over. And let’s talk about what each of these three are. And we’re going to talk extensively here for the next few minutes about each component of these. But but in summary, channel governance is primarily the whole concept of Do you as a brand, have a clear sense as to who’s going to represent your brand on Amazon, that may be representing it from a branding perspective, representing it from a sales perspective, representing it from an advertising perspective? But how are you as a brand, making sure that you have proper control over those agents that are representing you? You may in fact Choose to go directly to consumers and be the seller of records, you may designate someone else to manage your branding, you may designate someone else to do your advertising. But at the end of the day, the people that are representing you are people that you can have conversations with. And you’re in a position to go in more of a partnership mode and be able to work together to make sure that your brand continues to be properly represented on this channel. The second part of this three legged stool has to do with the branding and what kind of content you put into the catalog. If we start with a very basic assumption that chances are somebody will find a way to get their hands on a product on your brand, get some inventory, even if it’s a couple units here or there, somebody will find a way to get some units and they will put them on Amazon. If you put a product on Amazon, you need content, you need a you need a product listing, and that product listing is going to have images it’s going to have bullet points and product descriptions and question Frankly, if I’m not the brand, who’s to say I’m going to do a particularly good job of representing the brand, it turns out Amazon has programs in place where brands can submit content in an authoritative manner, where Amazon will acknowledge that that content is the content that should be shown to represent the brand. And as a result, you can separate out this issue of do you manage your branding? And do you manage your distribution, even if distribution and managing who’s going to represent you even if that continues to be a problem? At a minimum, you can know that consumers who see your brand on the channel are seeing content that’s consistent and accurate and complete with everything else that you’re doing and other channels. So that concept of optimizing the catalog and saying as a brand, I will be proactive and make sure that my content is in fact, accurate with what I want it to be. That’s a very, very important step for brands to take and one that acknowledges that nobody cares about the brand as much as the brand And then the third, the third leg of the stool has to do with essentially driving traffic to the listing. So if you decide to use Amazon as a channel where you are authorized resellers are going to sell products, what are you doing to invest in creating traffic, you may have traffic that you can bring by way of email or other forms of external traffic. But for most brands, growth on Amazon comes by way of doing advertising. I’m not interested in investing $1 in advertising, if it’s going to drive traffic to a listing that’s not properly optimized, and hence won’t convert very well, or to a listing where the seller of record is someone authorized seller who, in fact, by investing in advertising, I’m creating the wrong incentive. I’m creating more incentive for more people who I don’t control to show up and get sales from my product. So if I have the right kind of people representing me that I can communicate with have proper catalogue content that’s properly optimized for Amazon organic search and conversion. And I’m investing in advertising. In order to make sure that I drive traffic to my listings, that model can work extremely well, to make sure that your brand at least has a realistic chance of succeeding without doing harm to your branding, and doing it in a way where there’s more likelihood that you’re going to have consistent pricing across channels, and not be in a situation where things are always cheaper on the Amazon channel. So let’s let’s let’s start with channel governance. Denise, this is your neck of the woods to tell us more about some of these particular issues.
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