Reseller Questions (Part 4): Where is Your Brand Being Sold?

Jennie Scholick Sep 16, 2014

For many brands, the primary, even sole, concern when it comes to working with a reseller is whether they drive sales effectively. We think, however, that brands should pay almost equal attention to the experience a customer has at a partner website. While working with retailers can be advantageous for a brand, the very real downside is that you have little control over what kind of experience your consumer might have once they reach your partner’s site. The range of negative experiences a consumer might have is vast--from misleading copy to poor customer service or slow delivery times--and these negative feelings may end up reflecting back on you and your brand, rather than on the retailer. Should this happen, the positives about working with a reseller are largely undercut.

Case Study: GoPro

While doing research for this series of blog posts, I set up some BrandVerity monitoring on terms related to popular camera brand, GoPro, and found evidence of exactly this kind of potentially harmful partner bidding. A new retailer website in the current Y Combinator S14 class, Greentoe, is seeking to become something like the Priceline for retail. According to their How it Works page and this TechCrunch article, Greentoe allows a consumer to state the price they are willing to pay for an item and then the company shops that price to a variety of anonymous resellers. If one of those resellers bites, the consumer can get the item for a dramatically lower rate. For the most part, Greentoe is starting out with high-cost, specialist consumer products, dividing their product categories into “Photo,” “Home Theater,” “Baby,” “Appliances,” and “Musical Instruments.” That puts GoPro right in their wheelhouse.

What I found was that during the last two weeks of July, Greentoe aggressively bid on keywords including “gopro,” “gopro.com,” “gopro dealers,” and “gopro coupon.” Often, their search ad would appear in the first or second position on both Google and Bing, either beating out GoPro’s own ad or appearing directly below it.


GoPro_SERP-edit

In the above image, someone is using Google to direct herself to gopro.com (by the way, that’s another blog post entirely—how are brands impacted when someone uses Google as a navigation?) but finds GoPro as well as a retail partner offering 22% off, “Don’t Ever Pay Retail Again”!

Potential Impact on GoPro

This situation is bad for GoPro for a variety of reasons. First, not only have they potentially lost a direct sale, but they’re being severely undercut by their partner. It’s likely that a consumer, even one searching for the GoPro website, will click on Greentoe’s link as well--who could resist such a good deal?! Should the consumer make a purchase there, GoPro will end up losing a direct sale. In this case, the retail partner is potentially cutting into GoPro’s margins without adding any real value.

Second, Greentoe’s website is hardly as glossy and high-end looking as GoPro’s own and its interface, wherein one needs to type a numerical offer and then a pendulum swings to show the likelihood one’s offer being accepted, is clunky.


GoProGreentoe

Add to that the wait time between making an offer and having that offer accepted (Greentoe does not disclose how long that may take), and the added friction for the consumer may thwart a sale entirely.

Finally, Greentoe is itself an affiliate of a few other retailers, including Amazon, Walmart, and Bestbuy. While GoPro itself would not end up paying those affiliate fees, should someone navigate through Greentoe to any of those sites, GoPro will lose out on the direct sale. Greentoe does not offer a link back to GoPro’s own site.

Options for the BrandGreentoe Meter

The biggest question here, of course, is what can GoPro do about a site like Greentoe? As far as we can tell, Greentoe itself is not a licensed retailer of GoPro products, instead they are a third party site that a) operates as an affiliate of licensed resellers and b) works with licensed resellers to anonymously lower prices for consumers, presumably then getting a cut of the sale. Assuming that is indeed the case, then GoPro itself has little recourse to keep Greentoe out of its search results or require them to change their marketing tactics. One option might be to require that authorized retailers not work with third party sites like Greentoe. Another might be to encourage partner bidding by retailers with whom GoPro has a better, more mutually beneficial relationship.

If there’s one thing this study has proven, it is that it is very much to a brand’s advantage, even if they work with retail partners, to know who exactly is bidding on their keywords, how effective those bids are, and what the content of those ads is. They also would be served by keeping an eye on the landing pages of those ads. For GoPro, the ability to monitor Greentoe’s actions is the only way to take any kind of action against them and protect their brand.

Greentoe does seem to have stopped bidding on GoPro’s terms as of August 2. While we don’t know if that’s because GoPro stepped in or Greentoe simply changed their strategy, we definitely think that GoPro should be pleased. However, as we stopped monitoring Greentoe's activity shortly thereafter, we don't currently know if they have resumed the activity.

Thoughts on this kind of new retail site? Questions about the relationship between retail partners and brands? Leave a comment below or contact us at BrandVerity!

Topics: Affiliate Marketing

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