Does Your eCommerce Website Cause Channel Conflict?

Does Your eCommerce Website Cause Channel Conflict?

Posted on December 13, 2016 Mary Merritt

When I first started at my last job, I remember being incredibly nervous about meeting the expectations of my newly acquired superiors. My job was to come in and increase website sales for the company, and as a manufacturer of consumer goods, the organization had a lot of other more established sales channels on the wholesale/retail side of things. I remember doing some research online, and how sweaty my palms got when I noticed that the online resellers were going full steam ahead with their digital marketing. I saw the name of our products in paid search results, but the people behind our strategic alliances managed them all. I thought to myself: "How in the heck am I going to be able to do our marketing without making these people upset with us?" Regardless of my worries, I dove in head first, setting up new online revenue channels and redesigning our eCommerce website.

Soon enough, I started getting grumbles and growls from the sales team. They were relaying ugly conversations they had with their online resellers to me, explaining that all of my hard work was really ticking their clients off. Our partners thought that it was silly for our in-house marketing team to be competing with them in cyberspace; the overall consensus what that it was unfair (to say the least). When I write about this, I realize now that I was in uncharted territory. The company was heavily dependent upon these online resellers! They were a rather large part of the overall revenue that came in through the sales team. On the other hand, the sales from the website were full margin and instant CASH, so the owner of the company told me to keep doing what I was doing and simply ignore the grumbles.

Looking back, I think about how I could have done a better job searching for solutions to quell the channel conflict that was going on. If my CURRENT self could talk to my PAST self, I would tell that young whipper snapper to think bigger. Global distributors and big box retailers play a big role when it comes to achieving "hockey stick growth" in your revenue charts. When you're selling to end consumers, the margin is higher and you are making more revenue per product than you would on high volume sales. On the other hand, those high volume sales are really, truly beautiful. You can clean out your distribution center regularly (turning your inventory over faster and more efficiently), along with perks like brand exposure and huge purchase orders.

Have you found that you are running into a similar problem? If you manufacture consumer products it would be downright SILLY not to sell your own products online. Online sales for eCommerce in the United States continue to grow YoY into the hundreds of billions of dollars. That is not a figure to ignore. So, what do you do? Follow these simple steps to avoid your own little channel conundrum:

Your website should have a rock solid pricing strategy.

If you start selling your products at a discounted rate on your website, that is completely unfair. Particularly if you have contractual agreements with your retail partners that keep them from selling outside of a minimum advertised price (MAP). The easiest way to fix the bridge between your manufacturing company and your retail partners is to make sure that your brand enforces a premium pricing strategy on the eCommerce site. By maintaining the MSRP (Manufacturer Suggested Retail Price), your manufacturing company sets a really positive example for your partners. This has the potential to completely quiet the claims that your company is competing with its strategic retail and wholesale partners.

Why not tell the visitors on your website who your retailer partners are?

If you manufacture a product, it's your right to sell the product on your own eCommerce website. However, it is very important to showcase your retail partners on your website as well. Not only does this throw your strategic partners a bone, but it helps your customers as well. Some consumers still want to "touch and feel" the product - there are still a lot of people out there who like to play with the product a bit before committing to the purchase. If you include a "Retail Stores" section on your website, you are helping everyone out. You're helping your retail partners by giving them exposure, and you're helping your customers by giving them multiple ways to purchase your products. Hey, the more options there are, the better. In this case, a sale is a sale is a sale. If you drive a sale to a retail store, they are just going to have to re-order that much sooner.

It doesn't matter where they bought it. Help them.

Your eCommerce website should employ a great customer service strategy that involves helping customers solve problems regardless of where they purchased the product. This is your product, and if someone is having an issue, it's best if you can hear about it first hand. Secondly, your retail and wholesale partners will really appreciate the fact that you are helping their customers have a great purchase experience overall. Additionally, your Social Media Team should monitor the social highways for product issues, and be ready to help solve the issues through amazing customer service.

Work as a team.

Communication is at the core of every great team. By having regular meetings with your strategic partners, you are able to communicate upcoming new products, launch dates, online promotions, digital marketing strategy and more. Share your secrets with them! What keywords are you bidding on? What promotions seem to work really well? What new products are coming along that are going to blow the world away? Educate them as much as possible and offer them as much help as they need to succeed. Their success is your success.

Have some web exclusives!

As a Digital Marketing Strategist, you're probably wondering how the heck you are going to set your own website apart from the hundreds of other retail websites that promote your company's products. One answer is WEB EXCLUSIVE OFFERINGS. Create a product set that can be found solely on your company's website. Sure, this might cause a little trouble with your strategic partners, but if these exclusive products start selling on your website really well, you can always open them up to your partners. Maybe your website has the best color choices on the web? Whatever it is, promote it heavily and make sure your retail partners know about these exclusives ahead of time so there are no surprises.

There you have it! In the end, you have to decide if you can be intrinsically happy with a slower growth curve through selling online direct to consumers only, or if you want to have a bit of a quicker growth curve by opening up your sales channels to retailers and distributors. The latter is almost always the better idea if you're into world domination! In all seriousness, you can really damage your business by not doing this right - and the opportunity cost of staying away from strategic retail and distribution partners can be staggering. When done correctly, the rewards can be exceptionally glorious.