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Why More Sellers is a Bad Thing

Have you been pulling your hair out over too many third party sellers for your products on Amazon?

You’re not alone!

Did you know that the number of sellers on a product listing has a major impact on your product pricing and overall brand value?

Without a doubt, MORE sellers means you have LESS control.

It is a common misconception that adding more sellers to Amazon product listings will result in more product sales.

Let me show you why that is wrong…

Number of Sellers ≠ Demand

Product demand is driven by consumers, not by sellers.

If the demand from consumers on Amazon is for 1000 units per month, that will not change whether you have two sellers or twenty sellers.

If you have twenty sellers, that just means that each seller is getting a tiny sliver of the sales.

Let’s take a look at how having many sellers negatively impacts your brand.

MORE sellers = LESS control

On a daily basis, we see brands with too many sellers. All the sellers compete for the BuyBox. Without fail, one seller will attempt to gain an advantage by dropping the price slightly.

The other sellers then have a choice: either follow suit and match the lower price, or sit on all their inventory and keep their capital tied up.

This creates a the bottom.

The problem with the race to the bottom, is that someone always wins! Winning, in this scenario, is not a good thing for your brand or for the other sellers.

Who's Managing Your Amazon Listing Content and Marketing Efforts?

If there are twenty sellers on a listing, none of those sellers will spend the time and money to optimize or promote the product listings. They would be foolish to do so!

There are nineteen other sellers who would reap the benefit, and one of those other sellers could easily undo or change the product listing details. The result…? No one takes ownership of the listing.

When you want to run a PrimeDay, Black Friday, or Cyber Monday promotion, is it easier to coordinate with two sellers or with twenty sellers?

The answer is obvious!

Less = More

Let’s conclude with the solutions to these problems and review the benefits of having fewer sellers.

Less Racing to the bottom: If you only have one seller, there is no reason for them to drop the price. They want to keep the margins as high as possible. This maintains your brand’s value rather than eroding it.

(Side note: If margins are high for the seller, they won’t be asking you for deeper discounts in order to compete. That means higher margins for YOU, too!)

More sales: If margins are high for the seller, that seller has the incentive to sell more! One way they could do this is by capturing market share from competitors using ads, such as Pay-Per-Click campaigns.

If margins were razor thin, and prices were volatile, do you think that seller would invest time and money into advertising your product?

Absolutely not!

Ownership: A seller, who is sharing the sales with twenty other sellers, has no interest in making the effort to optimize the listing. However, that same seller, getting a majority of the sales, will be very motivated to optimize the listing.

Optimized product listings rank better in Amazon search results and convert more lookers into buyers.

When there is only one seller on your listings it becomes very simple to plan promotions and strategically implement your marketing game-plan.

About MegaRhino

MegaRhino is a retail brand-partner and an expert in the Amazon marketplace. We help your brand charge to the top by being a professional Amazon seller, not a parasite seller.

We make our money by buying your products wholesale and reselling them. We all win together!

You work hard on your brand. We make sure your brand works hard for you.

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