Strategies of competitors on marketplaces: to recognize and neutralize
Nikolay Novoselov, New Business Director of Cuore, analyzes the main moves of sellers trying to survive and outlive everyone on marketplaces. It will be useful and funny.
Company information
Cuore is a trading and manufacturing company in Moscow. The manufacturer of a number of trademarks, which he sells mainly on marketplaces. The company has an R&D department that develops cosmetics and food products both for its own brands and to order. In addition to the production of goods (now there are more than 10 online-only brands), Cuore is engaged in online distribution of well-known Korean brands.
In 2020, our company entered the marketplaces a couple of months before the "non-working, wage-saving" week. With the beginning of the pandemic, we began to rapidly increase our presence: starting with antiseptics and goods for self-organization of holidays, in a year and a half we came to our own brands (more than 10) and became the official representative of several Korean brands.
One of the most frequent (and extremely useful) topics that we discuss with our colleagues on the shop floor is how competitors behave. It's no secret that marketplaces allow a young mother from Saratov, a Chinese warehouse in Yekaterinburg and a large supplier who has been working with all networks for 10 years to compete with each other. And each of them believes that he is the most cunning and skillful. It is the overlap of these cultures of competition, coupled with the specific rules of marketplaces, that gives a unique picture of the virtual shelf. This picture, by the way, is characteristic of almost any country in the world.
We have prepared a small fan guide on typical patterns to show the extremes faced by both the seller and the buyer. What is the task of the sellers who use them, what they want to get and what they get as a result.
Note that from time to time specific implementations on specific marketplaces may have a slightly different form. For example, the title picture of the card should have a white background (but the rest will be like in the guide); the seller loses the ability to set the price himself (yes, this also happens); the structure of the product issuance changes, and so on.
Cuore is a trading and manufacturing company in Moscow. The manufacturer of a number of trademarks, which he sells mainly on marketplaces. The company has an R&D department that develops cosmetics and food products both for its own brands and to order. In addition to the production of goods (now there are more than 10 online-only brands), Cuore is engaged in online distribution of well-known Korean brands.
In 2020, our company entered the marketplaces a couple of months before the "non-working, wage-saving" week. With the beginning of the pandemic, we began to rapidly increase our presence: starting with antiseptics and goods for self-organization of holidays, in a year and a half we came to our own brands (more than 10) and became the official representative of several Korean brands.
One of the most frequent (and extremely useful) topics that we discuss with our colleagues on the shop floor is how competitors behave. It's no secret that marketplaces allow a young mother from Saratov, a Chinese warehouse in Yekaterinburg and a large supplier who has been working with all networks for 10 years to compete with each other. And each of them believes that he is the most cunning and skillful. It is the overlap of these cultures of competition, coupled with the specific rules of marketplaces, that gives a unique picture of the virtual shelf. This picture, by the way, is characteristic of almost any country in the world.
We have prepared a small fan guide on typical patterns to show the extremes faced by both the seller and the buyer. What is the task of the sellers who use them, what they want to get and what they get as a result.
Note that from time to time specific implementations on specific marketplaces may have a slightly different form. For example, the title picture of the card should have a white background (but the rest will be like in the guide); the seller loses the ability to set the price himself (yes, this also happens); the structure of the product issuance changes, and so on.
Minus the ruble
The tactic is as simple as possible: to always be a ruble cheaper. With an identical card, with a score of 3.5 points, a mountain of twisted positive and negative reviews.
This steep segment peak begins the same way: there is a successful product that is sold with a good margin. Let's assume that with the cost of goods at 100 rubles, the seller earns 300 apiece. At this moment, a "creative" competitor comes, copies the card (more on this at the end) and puts the price one ruble less. And if the main seller also puts the price on a ruble less — this is the beginning of the end.
The fact is that formally, the goal of "squeezing out" a competitor by reducing margins is a fiasco. 99 percent of sellers do not know their COGS and count revenue, not profit (yes, like that hare), so the margin can go into a steady minus for a long time (if not forever).
The tactic is as simple as possible: to always be a ruble cheaper. With an identical card, with a score of 3.5 points, a mountain of twisted positive and negative reviews.
This steep segment peak begins the same way: there is a successful product that is sold with a good margin. Let's assume that with the cost of goods at 100 rubles, the seller earns 300 apiece. At this moment, a "creative" competitor comes, copies the card (more on this at the end) and puts the price one ruble less. And if the main seller also puts the price on a ruble less — this is the beginning of the end.
The fact is that formally, the goal of "squeezing out" a competitor by reducing margins is a fiasco. 99 percent of sellers do not know their COGS and count revenue, not profit (yes, like that hare), so the margin can go into a steady minus for a long time (if not forever).
"Alien" in the brand
Why download your brand if you can "go" to a brand that is already well searched for? Well, let the client look for another product. Ours is cheaper!
This is a fairly common story for cosmetics, where a large percentage of brand requests. For example, serums of other (mostly little-known) companies are sold at the request of “The Ordinary”.
Why download your brand if you can "go" to a brand that is already well searched for? Well, let the client look for another product. Ours is cheaper!
This is a fairly common story for cosmetics, where a large percentage of brand requests. For example, serums of other (mostly little-known) companies are sold at the request of “The Ordinary”.
What to do: big brands are quite well protected from such "integrations". A newcomer to their brand search will receive a friendly pre-trial letter and a few days to correct the error. Smaller brands try to either convey to the buyer "who is who" visually and develop cross-sales inside the cards, or write angry letters to the seller. However, sometimes such letters help.
"Hit of Sales!" and other tattoos on the brand card
A hit of sales without sales: inscriptions and designations appear directly on the product card, which can even mimic the dies of the marketplace. There are even "fake" reviews, stars, phantom sales. And this is an extremely effective tool. It works especially well in highly competitive commoditized segments (hundreds of identical products without brand importance, such as protective glasses for phones, charging wires, extension cords).
A hit of sales without sales: inscriptions and designations appear directly on the product card, which can even mimic the dies of the marketplace. There are even "fake" reviews, stars, phantom sales. And this is an extremely effective tool. It works especially well in highly competitive commoditized segments (hundreds of identical products without brand importance, such as protective glasses for phones, charging wires, extension cords).
What to do: spend money on a high-quality (moderately) product card design, its description, and so on. Why in moderation? We must not forget that people do not come to buy a product card, but the product itself. Therefore, the product should not be a bonus to the card.
Multicooker
Another legend from the past: create many, many identical cards for the same goods and score the delivery of goods. As a maximum, this approach contradicts the rules of the marketplace, and its author may be fined/blocked. At a minimum, the author of such a strategy falls on marketing expenses: control of the uniformity of sales and deliveries, the drop of cards in the search even for direct queries, greater sensitivity to the difficulties of shipping goods under different SKUs and problems with price control.
Another legend from the past: create many, many identical cards for the same goods and score the delivery of goods. As a maximum, this approach contradicts the rules of the marketplace, and its author may be fined/blocked. At a minimum, the author of such a strategy falls on marketing expenses: control of the uniformity of sales and deliveries, the drop of cards in the search even for direct queries, greater sensitivity to the difficulties of shipping goods under different SKUs and problems with price control.
What to do: if your competitor has chosen this tactic, you are lucky — you have the opportunity to effectively take and hold the first place while he is busy with reconciliation. And a complaint to the marketplace won't hurt either.
Photo thief
Some sellers really bother with the delivery of goods: they order good photo shoots, design, write the right words in the cards with an emphasis not only on the issuance of the marketplace, but also the search engine. We are one of such sellers.
And some sellers are just waiting for content to steal it. Someone steals a photo, someone steals a description, someone steals the whole thing. Some even steal photos directly with the models in the photo!
Some sellers really bother with the delivery of goods: they order good photo shoots, design, write the right words in the cards with an emphasis not only on the issuance of the marketplace, but also the search engine. We are one of such sellers.
And some sellers are just waiting for content to steal it. Someone steals a photo, someone steals a description, someone steals the whole thing. Some even steal photos directly with the models in the photo!
What to do: the main thing is that it doesn't make sense to write to marketplaces. They are not a judge between sellers and they do not have the authority to control the observance of other people's copyrights. Also, you should not brand the photos with anything other than your own trademark: extraneous inscriptions can lead to the ban of the product or the entire account.
Our experience and the experience of our colleagues shows that it makes no sense to fight in this case. It's easier to just focus on product sales and product improvement. The best thing to do is to sell your own products under your own brand. If the product cannot be under your brand - get official documents for the representative office. Some marketplaces, by the way, are already beginning to meet those who have an official confirmation of partnership with the manufacturer.
Our experience and the experience of our colleagues shows that it makes no sense to fight in this case. It's easier to just focus on product sales and product improvement. The best thing to do is to sell your own products under your own brand. If the product cannot be under your brand - get official documents for the representative office. Some marketplaces, by the way, are already beginning to meet those who have an official confirmation of partnership with the manufacturer.
Steam train backpack: connecting to other people's cards
This strategy can work in one way or another on different marketplaces. The bottom line is that competitors' goods can be issued directly in the card of other competitors and sometimes directly with their own reviews. In the best case, a competitor sells a similar product or at least just poorly packaged. But in some stores, fakes are sold like that. Then, in addition to capturing sales, he "dries" the product card and drops it in the issue.
This strategy can work in one way or another on different marketplaces. The bottom line is that competitors' goods can be issued directly in the card of other competitors and sometimes directly with their own reviews. In the best case, a competitor sells a similar product or at least just poorly packaged. But in some stores, fakes are sold like that. Then, in addition to capturing sales, he "dries" the product card and drops it in the issue.
What to do: the same as in the previous paragraph. Fighting is ineffective, and creating your own brand or officially representing someone else's is the opposite. The marketplaces themselves can help you here.
Super discount
The most legendary way. They say that in the old pre-pandemic times, a 90 percent discount increased sales 10 times. And they also say that somewhere there are customers who do not know the real value of the goods and believe that it is always cheap on the Internet. But the marketplaces have already begun to shoot those who do this quite effectively themselves. For example, they prohibit lowering the price in the first two weeks, use automatic price quarantine, and so on.
The most legendary way. They say that in the old pre-pandemic times, a 90 percent discount increased sales 10 times. And they also say that somewhere there are customers who do not know the real value of the goods and believe that it is always cheap on the Internet. But the marketplaces have already begun to shoot those who do this quite effectively themselves. For example, they prohibit lowering the price in the first two weeks, use automatic price quarantine, and so on.
What to do: marketplaces are constantly struggling with such sellers. Price quarantine, price fixing, prohibition of interest changes, discounts from the original price. Therefore, do not use "superskids" — it is very easy to get significant losses with them. In addition, customers no longer respond to such "bounties".
Look at marketplaces as a new market and a new business
This is true even for very well-known brands. Often large companies and sellers fail only because they do not adapt their competition model to online platforms. Marketplaces are a huge new world with their own rules of competition and interaction. And success here is a way to get to the basket of millions of already existing and very loyal customers.
This is true even for very well-known brands. Often large companies and sellers fail only because they do not adapt their competition model to online platforms. Marketplaces are a huge new world with their own rules of competition and interaction. And success here is a way to get to the basket of millions of already existing and very loyal customers.
