Case Study
National Tactical Gear Brand
How a Major Tactical Gear Apparel Brand Eliminated Showrooming and Grew Revenue Per Unit 60% on Amazon in Only 6 Months
About the project
Marketplace Valet partnered with a tactical gear brand to help manage their business, including the process of shifting the product catalog from Amazon Vendor (1P) to selling directly to consumers on Seller Central (3P).
Challenge
The tactical gear brand struggled with their wholesale relationship with Amazon. After coop advertising and claw-backs, Amazon whittled the price to about 42% of the retail price per unit.
The average payment time for the PO was 105 days. Claw-backs amounted to over $600,000 per year, due to Amazon’s strict policies with fulfilling POs.
Additionally, the brand suffered from showrooming, a practice where customers enter retail locations to try on merchandise but then order online.. Amazon vendors and 3P sellers were selling their products under MAP on many listings.
Lastly, while the brand had over 30 employees in the e-commerce department, only one managed the catalog of over 15,000 SKUs and 8+ figure annual business on Amazon.
Proposed Solution
Marketplace Valet offered our full suite of services, including advertising management, listing optimization and warehousing, to take on the operation and processes for selling through Amazon’s third-party marketplace. This allowed the brand to leverage our Seller Account, which has a 15-year history with Amazon and over 400,000 reviews.
This also eliminated issues with policy violations related to Amazon Vendor agreements, namely the Manufacturer on Amazon (MOA) policy, which prohibits brands with retail distribution from having a third-party seller account.
Additionally, we offered to clean up the listings and remove numerous unauthorized/grey market sellers.
Results
- The tactical gear brand transitioned its catalog from an Amazon 1P relationship to a direct-to-consumer 3P model with zero downtime on listings.
- Amazon Vendor “threats” stopped.
- The brand saw a massive increase in revenue per unit — from 42% from Amazon Vendor to 70% of the retail price through Marketplace Valet (a 67% increase). In addition, bi-weekly settlements increased cash flow and cut down the inventory they needed to float.
- After optimizing listings, setting prices, and removing grey market sellers, the brand’s nearly 100 retail locations reported that showrooming stopped and same-store sales were growing again.
- After breaking up the catalog into tiers to prioritize optimization, we worked through all 15,000+ SKUs during the first 120 days.Under our management, the brand went from selling $16M at wholesale to Amazon to over $30M in topline revenue through 3P Selling. This happened in the first year and didn’t require a large investment or additional in-house resources/ staffing to manage the process.
Conclusion
Partnering with Marketplace Valet unlocked additional revenue and profits on the 3P Amazon Marketplace side that the tactical gear brand wasn’t getting through Amazon Vendor. They cleaned up the catalog to shore up retail prices and establish pricing parity across the internet.
Having more control over their brand, content, and prices on Amazon led to significant offline improvements at retail stores as well. With minimal upfront investment or the need to staff up, the brand could move fast to make changes.
Since Marketplace Valet’s model is commission-driven, our interests align with the brand. So they can avoid fixed overhead. In a world where the expectation is to do more with less, this brand’s one internal Amazon resource in the e-commerce department started producing less like a single soldier and more like an entire army.
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