As online shopping continues to outpace offline growth, so does the need for brands to ensure their e-commerce shoppers are receiving their products in the way the brand teams intended. With 3P marketplaces (Amazon, eBay, Walmart.com, etc) accounting for a significant share of that e-commerce growth – there is the significant unseen risk that unauthorized and rogue 3P sellers mishandle products with poor shipping practices. The main issues with this are seen when dealing with breakables and perishables in the summer heat, as failure to adhere to regulations can lead to melted or damaged products ending up in shopper’s hands.
Given we’ve just gone through a massive heatwave at Potoo’s HQ, I thought it timely to sit down with our EVP of Sales, Scott Albright, to discuss how brands should be proactive in managing their reseller’s shipping practices.
What are some of the things that can go wrong when shipping perishables during the summer heat?
The most impactful challenge has to be melting — it’s one of the worst experiences possible for all involved. Let’s say you like a certain type of chocolate — you buy it online as a gift and it has shown up melted and completely reconfigured and deformed. That’s going to reflect really poorly on the brand. In most cases the consumer is not going to care who the distributor is, they’ll just leave a review that says, “I had a bad experience with ‘x-brand’ because I received chocolate that was melted.”’
What other foods or perishables do you see issues with and why?
There are plenty of challenges – it could be olive oil, a condiment, a salad dressing, cookies, alcohol…. the worst thing you can do is open it up and it’s leaking all over the place. Many brands have worked hard to certify these products in frustration-free packaging – ensuring that the products are leakproof when sent through Amazon’s FCs — a 3P seller has no such requirements.
That sounds like it’s not only a sales challenge but also a brand reputation challenge — is this a growing concern that brands need to take notice of?
As e-commerce continues to grow at exponential rates, you’re going to see more of these problems. Even if these shipping errors take place at the same rate, you’re going to see more and more of them occur due to the increase in online sales. Let’s say you start with 4,000 orders of a certain product one year, and with that, you have 4 with a defective issue, then you jump to 40,000 the following year and have 40 issues, then increase to 400,000 units sold after that and all of a sudden you have 400 defective sales on your hands. It all begins to add up really quickly and before long every company is going to have widespread complaints about your goods being faulty. Brands should be proactively monitoring their product’s ratings and reviews to flag any potential problem – whether that is with the product itself, with shipping damages, or with the seller in question.
What can brands do to address an issue once it has been identified?
You have to ensure that your third-party sellers are authorized to sell your products and do it in a way that keeps the brand’s promise to consumers. Your authorized 3Ps should be meeting your material safety guidelines; whether it be a cold ship, hot ship, labeling, hazmat, or general packaging.
I think it is especially important in the food category that you have an authorized reseller strategy in place. This not only helps drive top-line sales but ensures a high standard of brand perception. For some ambient center store categories like confectionery or protein bars, normal retail-ready case packs may not be fit for flowing through online distribution channels…. or sitting on the shopper’s front porch in the hot sun for a few hours. This is a watch out for consumer experience. These are all important decisions for manufacturers to make in the summertime, and it’s made really difficult without a robust brand protection program in place to ensure sellers are adhering to these guidelines.
How can brands use Potoo’s brand protection services to track third-party sellers and how can it improve the quality of a brand’s shipping practices?
We can crack down on unauthorized 3P sellers so they can specifically see who the offenders are, where they’re located, and put in place a communications plan to identify sourcing. Often we see someone selling products out of a garage in New Mexico in the summer or a warehouse without air conditioning in Texas. Many of the challenges we’re seeing are coming from smaller brands that have chased volume through distributors to fuel growth and are at the edge of losing control. The large multi-channel retailers like Target, Walmart, and Kroeger are reading your product’s reviews about these issues that haven’t been addressed, and it makes it much tougher to get expansion at brick and mortar locations.
What other shipping malpractices do you see, and do they persist year-round?
Many of the non-seasonal shipping issues are with breakable products, which we see as a major challenge year-round. Short of a complete product redesign, such as moving from glass bottles to plastic — it comes down to brands being diligent on filing material safety guidelines for all products, whether it’s protein bars, batteries, hazmat, or glass bottles. Sellers must abide by those guidelines in order to be compliant with many marketplace or legal regulations — consumer centricity is key.
When brands work with Potoo’s managed service – we work on behalf of the brand to communicate regularly with authorized and unauthorized sellers to ensure they are compliant with those material safety guidelines. Our team performs test buys on behalf of the brand to ensure standards are being met. From that point, the sellers can work with the brand to either become compliant, or they end up being taken off the marketplace platform. The more proactive you can be in having in-depth conversations with your resellers, the more likely you are to ensure shipping standards are being met for great consumer experience.
Far too often, shipping malpractices and cases of negligence ruin the product experience for the consumer which ultimately reflects poorly on the brand rather than the distributor. These issues will only continue to grow, and they need to be addressed with the help of an outside consultant. With advanced analytics and an outsourced brand protection service, Potoo can help companies of all sizes take back control of their marketplace experience. Schedule your free diagnostic today!