Steep competition often drives resellers to engage in unfair business practices as they seek to move more products. Price undercutting is the most popular way to get people to buy more products. You only need to slash the prices to score a bargain.
Unfortunately, such a strategy has an unintended blowback on the parent company. The sudden lowering of prices dilutes the value of your brand in the eyes of the consumer. Fortunately, you can prevent this from happening to your brand with the help of a price-monitoring tool.
Streamline Your Distribution Process
When you have a minimum advertised price policy in place, you have the assurance that most of your distributors will play ball. They will not undercut each other as a means to increase sales. If some rogue elements decide to go for it behind your back, you can wise up to them quickly.
You can get them to clean up their act or boot them from your network. On the other hand, you get to wise up to sellers outside your network carrying your products while breaking the rules. Although they’re not part of your system, you can take legal actions to compel them to stop the harmful practices. In the online scene, reaching out to the parent company is enough to get such sellers to pull the product or price it accordingly.
Boost Your Product Appeal
Everyone is in business for selfish gains, and that applies to the retailers and distributors in your network. They carry your products because they hold the promise of giving them tidy profits.
Should a significant number of retailers in your network drop your products, it can significantly hurt your sales and market reach. When your commodity becomes unavailable on the market, your customers are likely to make do with what’s readily available. If that happens, you might have a hard time trying to get them to switch back, saddling you with a smaller market share. Plug these holes that can have your distribution system holding on to old stock. Product popularity within your network depends on their ability to sell it quickly.
Clean Your House
If your range of products keeps popping up on the market at discounted prices, that might point to a more significant problem. It might mean that you don’t have a firm grip on your distribution system as you like to think. It can mean that you have an employee problem. Some people in your company might be stealing from you and supplying the market at below-market prices. A pricing policy can let you narrow down to these rogue sellers.
Each of the resellers in your distribution network wants to turn a profit. As such, they will go to great lengths to boost their sales and increase their product turnover. Some of these tactics might have a substantial effect on your brand and products. Therefore, you need to find effective ways to keep them from engaging in business practices that hurt your brand in the eyes of the consumers.