Holistic Omnichannel Control Strategies for Optimal Marketplace Revenue and Profitability

Feb 16, 2023 12:00 PM1:00 PM EST

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Key Discussion Takeaways

Many brands have been struggling to mitigate the effects of unauthorized sellers. Each year, new issues arise in the marketplace that make control strategies even more complex. Is there a tried-and-true approach to successfully combat unauthorized sellers and optimize revenue?

Although there’s no silver bullet to solve the problem, there are key strategies to help your brand create a secure foundation. One of the most crucial aspects to remember is that your plan shouldn’t only surround unauthorized sellers on Amazon; it should encompass the entire omnichannel ecosystem. When you take a holistic approach, your brand can get to the root of the issue and ensure that all departments are invulnerable to unauthorized sellers.

In this virtual event, Aaron Conant is joined by Daren Garcia, Partner at Vorys eControl, to talk about dealing with unauthorized sellers and creating a holistic omnichannel strategy. Daren discusses the potential impact of unauthorized sellers, steps to address these disruptors, and the key departments that should be involved in the approach.

Here’s a glimpse of what you’ll learn:

  • The complexities of omnichannel control
  • What is the typical net impact from unauthorized resellers?
  • Daren Garcia describes the steps brands should take to address potential disruptors
  • How long does it take to implement a secure foundation?
  • Why legal action might be a favorable approach for your brand
  • Daren talks about MAP, distribution contracts, and international solutions
  • The key points within an omnichannel control strategy
  • Why eCommerce, sales, and legal stakeholders should be involved for a successful holistic approach
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Event Partners

Vorys eControl

Vorys eControl is a top 150 law firm that has an expertise in implementing legal strategies to stop unauthorized re-sellers, control MAP pricing, eliminate channel conflict which all ultimately lead to online marketplace sales growth.

Connect with Vorys eControl

Guest Speaker

Daren Garcia LinkedIn

Partner at Vorys eControl

Daren Garcia is a Partner at Vorys eControl, an online seller enforcement team. He leads the firm’s international programs and advises US-focused companies about their online sales control initiatives. Daren has been with the Vorys team for over 19 years and has worked with hundreds of brands around the world to implement cutting-edge solutions.

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Event Moderator

Daren Garcia LinkedIn

Partner at Vorys eControl

Daren Garcia is a Partner at Vorys eControl, an online seller enforcement team. He leads the firm’s international programs and advises US-focused companies about their online sales control initiatives. Daren has been with the Vorys team for over 19 years and has worked with hundreds of brands around the world to implement cutting-edge solutions.

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

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Aaron Conant

Co-Founder & Managing Director at BWG Connect

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution.

Co-Founder & Managing Director Aaron Conant runs the group & connects with dozens of brand executives every week, always for free.

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Discussion Transcription

Aaron Conant 0:18

Happy Thursday, everybody. My name is Aaron Conant, I'm the co founder, Managing Director here at BWG Connect. We're a giant networking group of brands over 8500. At this point in time, we network knowledge share together to stay on top of the newest trends, strategies, pain points, whatever it might be that shaping digital. I spend most of my time talking to brands, I try to make 20 to 30 a week somewhere in there. Just to kind of, you know, feel out where, what's going on in the digital space? Who's winning? Who's losing, you know, what are the platforms that are great, what ones need to be worked on, who are the best partners around. And when the same topics come up over and over again, that's how we get the topics for these events. We're gonna do close to 85 dinners this year. So if you're in a tier one city, and you'd like to join, just let us know. We'd love to have you there. And we're in about six full day in person events in New York City. And then a ton of these webinars like this. And so I love to have conversations with people look for follow up email for me, would love to catch up. I know a lot of people on the line today, sponsor new people. And I don't sell anything here. We just networking knowledge share. So I'm more than happy to schedule time with anybody. You'll see me admitting people along the way. So if I'm not staring straight at the screen, we're just letting people in. But the thing is, we want this to be as educational informational as possible. So at any point in time, if you have a question you want to jump in, just go ahead, and you can drop it into chat and drop into the q&a. But we're also going to bounce around a little bit as well. We're just going to bring in people in the conversation and see what they're having, you know, their thoughts in this space. But you know, this particular event, holistic, Omni channel control strategies for optimal marketplace revenue. It's a it's a mouthful, but it's something that people are struggling with at this point in time. They have been for years now. And every time we think we get closer to figuring it out. There's a new shift. There's a new pivot, there's new issues that pop up. We've got some great friends partner supporters in the network for I don't know Daren, how long have you been friends? Like five years? It's been a

Daren Garcia 2:21

It's been a long time. It will be five decades. eCommerce world.

Aaron Conant 2:25

Yeah, right. And there, he's over at Vorys eControl. And they're just all around great friends, partners, supporters of the network. But Daren, if you want to jump in briefly, you know, kind of give everybody a background and yourself and eControl. That'd be awesome. And then we'll kind of jump into the deeper conversation and get some questions answered. Sound good?

Daren Garcia 2:45

Yeah, for sure. Thank you. And thanks to everybody for hopping on. I'm Daren Garcia. I'm a partner, I’m a lawyer. I'm a partner at Vorys, which is a large law firm and one of the leaders of a group called eControl which invented the category of online sales control many years ago now, and is the world leader on that issue. We work with over 800 brands on helping them to achieve control over their online sales and to leverage that control to do better business across all of their channels. And so, you know, kind of hence the title for the for the discussion today. But I am based out of London, and run all of our international business as well as a lot of the US strategy. Work still. So thanks. Thanks for coming on, and hope it's informative.

Aaron Conant 3:33

Yeah, so as I said, a couple more people in here, you can always check changed. In others. If you have questions, feel free to unmute and jump in, or drop them in the chat or dropping the q&a. You know, we've been chatting for years now. You know, what's, you know, are there any new things that are popping up that we should tackle? And then I want to kind of jump into some of the basics and then kind of do a dive? What's new?

Daren Garcia 3:57

I mean, I think that I think that, you know, in terms of what's changed?

I think the answer is that it's become it's and we'll define all of these things, but it's become more complex. The, you know, back back in the day, when we first started doing these dinners, Vorys really had the only viable solution for dealing with unauthorized three P sellers on Amazon. And there's a particular legal strategy for doing that. We've talked about that today. But brands were trying a lot of half measures and we kind of had some some secret sauce in that respect. And so that's all that anybody wanted to talk about. And now, you know, that's that's very much still a threshold pain point. But I think in terms of complexity, what brands are starting to figure out is okay, if I have resellers on marketplaces, that means that my marketplace businesses disrupted but also my retail businesses disrupted because they won't follow my map or MSRP programs. And then, you know, I have distributors coming at me and not wanting to pay me and then I have stuff coming from overseas. into these markets that are disrupting me. And you know, the list sort of goes on. And it's one of those things, it's like you pull a thread and one on one side, and, you know, it has all of these impacts over and in a totally different set of channels, and potentially different teams within your, within your organizations. And so that's, I think, being the biggest evolution, we can look at just some schematics of this as we go along to help guide the conversation. But really, it's gone from Hey, how do you how do you stop an unauthorized seller of otherwise genuine product on Amazon to how do I control my entire sort of Omni ecosystem online? You know, just your.com, D2C marketplace? And the brick and mortar traditional distribution world is really what brands even though they don't necessarily know, they're asking about what they're really asking about today.

Aaron Conant 5:49

What is the normal? Just a quick question? What is the normal net impact you see from unauthorized resellers? I think, and I'm going to jump out a couple people. But, you know, that's one of the top questions that I get routinely is, you know, everybody, everything has a cost to it. And belts are getting tight and budgets are getting crunched. I mean, we just, you know, I just had there's a podcast that came out today, you know, the case for not cutting content, you know, so there's all these different things that are popping up around, like, I need to tighten the belt somewhere. But, you know, this is one of those areas where you're protecting brands. But, you know, what's the net impact on sales? Is there an average that people are losing? That's, it seems like a lot of things are getting down to what the dollars mean, at this point in time?

Daren Garcia 6:38

Yeah, absolutely. So here's, here's kind of one way to think about to think about it, we can just use Amazon as a as a starting point, because people are probably, you know, at least potentially most familiar with that in the in the eCommerce space. So you know, your brand, your product, you know, any particular product will do a certain amount of money on Amazon. And a certain percentage of that will be captured by your authorized seller or sellers, you know, whether that's Amazon itself, if you're, if you're in a one P vendor relationship with them, whether that's a three P reseller, or if you have a partnership with a three P reseller, or if you're selling three P yourself, or if you have some group of sellers that you've authorized to sell there, that team will win some percentage of sales. Now, the remaining percentage will go to other three P resellers that have somehow sourced your product and are selling there. So you know, there is the firt you think about this is just like a classic ripple effect. So let's say you're winning 80% of the sales and you're losing 20%. Now you've sold that 20% At one point already likely into distribution, where you potentially have a different margin structure. So that's kind of the first tranche of of loss or impact is what is the delta on just the last sale in terms of dollars in your in your pocket from a margin perspective? Then you start to look and say, Okay, now what is that? What is that 20% loss causing me in pricing erosion, because in order to beat out Amazon, or your, your authorized offering or whatnot, these resellers have to drop their pricing, or Amazon has to, you know, chase them, chase them all around in terms of pricing. And so if you look at your ESPs, over the course of a year, you will see an impact there now that will start to spill, well, let me stay on the marketplace for a minute. When you're not owning by box, you know things like certain ads and marketing strategies aren't aren't being utilized, you may be paying for advertising, but your ads aren't running. Or you're driving traffic to the wrong listing. So all of a sudden, your row ads or however you're quantifying your return on your marketing spend, is is rewarded or disrupted, then all of a sudden you have inventory issues, forecasting issues, all of those sorts of things, then you start getting into brick and mortar and you have, you know, retailers or distributors looking at your online pricing and saying, you know, how do you want me to compete with this, I can't and they're, you know, wanting, they're wanting margin guarantees, or they're restricting shelf space, or all of those sorts of things. And then, you know, all of a sudden, you start to see profitability erode across all channels, and really all of that, for many organizations can be traced back to just losing some percentage of sales on a marketplace like Amazon. And so that is the classic. You know, a lot of old school sales teams will still say, well, what's the difference? A sale is a sale. And that's that's the difference at the end of the day.

Aaron Conant 9:37

Yeah. Awesome. And then this is Have you seen this issue? Because primarily, I know, as we look back over the years, and you know, Kyle Molera it'd be great to have you jump in here. I don't know if you can unmute or not. But if you could, we'd love to pick your brain on a couple of things. Is this just prevalent across I know you're in Scotland now. Right. Are we here in London now? Yeah, but So, if you're looking at brands across the board where this is becoming, you know, an issue globally now.

Daren Garcia 10:09

We are absolutely, I mean,

Aaron Conant 10:11

because we've been we used to focus these calls, they were on Amazon US, right? Yeah. And

Daren Garcia 10:15

Amazon US. And I mean, everybody can tell I'm American, I'm based in Europe now. But the, the reason that I'm over here is because we just had too much going on over here. And either my partner, Whitney, who some of you may have seen out on the road, or I had to, had to come. So here I am. But, you know, I think that a lot of a lot of, like, major organization of big global companies have started to create centers of excellence around this issue where they are managing this or looking after this or setting KPIs or strategies at a global level, and how do they coordinate what was once in most instances, a very siloed country by country or region by region, even down to you know, totally distinct p&l, and all of those sorts of things starting to look at it in a much more holistic level. Because, you know, let's say you have I mean, I was just on the phone last night with a Japanese company with the US arm of a Japanese company that is being just undercut to death here by Japanese distributors putting product in the market here, because they have totally different pricing corridors and they can make can make a lot of money, and it's totally killing the US business. And so, you know, it has to be managed at a global level, because the marketplaces are Amazon, you go and give your product to Amazon one P, that'll show up anywhere in the world, Amazon wants to wants to put it at whatever price they want to put it at. And so that's the reality that that companies are leaning into with those sort of, you know, single point of, of truth internally type teams on all of this.

Aaron Conant 11:44

You know, there's the brand, Daren, you're pulling something up here, but I also like, a lot of times people miss the brand damage that's done. Right that it especially if somebody buys so I was in OTC pharma before this, right. And we had a massive issue with it. And the reality is if somebody buys a product that has that's consumable, I guess it doesn't have to be I was, then if it's not held in the right conditions, and it doesn't work, or there's an adverse event, like it just destroys the brand. Right? There's so many implications on the back end. And, you know, that's included in the beauty space, if it doesn't work it you know, it's been stored in a Tempe Arizona warehouse, or, you know, it seems like most of my products came out of like a Bronx warehouse, or warehouse in the Bronx. You know, it had an immediate impact of the brand from if there's an adverse event. So, no, I think you said it very well. Christian, thanks for jumping in.

Daren Garcia 12:51

So, so let's just kind of take all of this head on, because I really want everybody on the call today to understand what we're trying to think of the right word, what competencies or activities do you need to take to address each of the potential disruptors to your brand in the space? It's so here you are, you have your retailers, you know, national retailers that you're doing business with, you also are on Amazon and Walmart, in some strategy could be one p could be three P, it doesn't, it doesn't really matter. And everybody's trying to reach the end users out there. And you want to have map or MSRP at $30. Okay, great. So everybody starts off at $30. And you have your MAP policy. So now you're giving you know, incentives and whatnot to your distributors, you're selling them at 15, they over buy, and they start laying products off on diverters or just people that you wish that they wouldn't. Now those diverters go running to Amazon and now we start the race to the bottom, they offer a 2999 you're maybe if you're running a three P strategy start getting suppressed, you know, we have 28 they match 2899 Amazon one p. And all of a sudden Walmart now is coming down matching to that on the eDLP. And this all continues now, let's say that, you know, your customer out here sees the Walmart price. And now they go back and everybody's looking back to you wanting their money. Now all of a sudden there's a promotion run at retail, friends and family they come down 25% And all of a sudden now everybody's you know, Amazon matches that Walmart matches that. Now let's say that you know, maybe even some stuff is showing up on on Google Shopping and whatnot where there's some counterfeit marketplace sellers that are playing a good you know, pay per click game and things like that. And now you're starting to see further disruption from that. And then people start leaving bad reviews. And you know, all of a sudden you start getting bad shelf space. You're crapped out on Amazon, Walmart's upset. And this is this is what's going on now. A lot of companies come to us in this is really what they're facing some iteration of this and they'll say, Hey, I'd really like to do a map program. Or I think I need to, to do some brand registry stuff, or they have in their head, these very fragmented approaches on what is needed to deal with this. And so when we walk through here, you know, you need to take and that's this, this whole talk today is this concept of a holistic, you know, kind of 360 approach, because what applies to one situation does not apply to the other. So let's say, you first start with an authorized reseller program. Now that goes down to distributors and to their customers. And you say, Hey, you can sell in your authorized channels, but you can't turn around and resell on Amazon, or marketplace. So what does that do? Well, that will take away that one line right there, where the distributor itself is the one supplying Amazon, you know, assuming that they comply. And also, you know, hey, don't supply these diverters you can only sell to authorized resellers. So just that regional DTC sellers, so fine, great. But people will still get a hold of your products, okay? Because things like map and reseller policies, and all of those sorts of things have nothing to do with unauthorized sellers. So if anybody on the phone is thinking unauthorized sales problem and map in the same sentence, like you're talking literally apples and oranges that does not compute one across the other.

Aaron Conant 16:55

And so because they're not, there's no legal tie,

Daren Garcia 16:57

there's no time whatsoever. I mean, the only I mean a map program or Risa, I mean, those are just pieces of paper that set your expectations with your authorized customers, you have no hook into these authorized resellers, I mean, literally none visa vie those tactics and, and that's why I mean, it's it's a little bit self serving, but I wouldn't say it if I didn't believe it's true, anybody that's using a software or a scraping tool, or some type of technology company to go after unauthorized sellers, you will not fix the problem doing that. Because there's no legal foundation, you have to address this from a legal perspective, because otherwise, you may scare some of them away. But any disruptive seller, the ones that are active actually getting sales actually disrupting your set know very well that they don't have to listen to that. They don't. And so that's why those things are ineffective. And so in order to deal so you see this diversion and these dotted lines coming to to the marketplaces, these people are all hiding, I'm not going to get too deep in the law. I'm happy to talk offline with anybody about it, but there's just a rule of law that protects that. And to beat that you have to put in a very specific legal foundation. That is the one way to deal with those resellers. Now those can go away. Great. So now we have we have that squared away. Then we'd say okay, we want to do map. So that's gonna keep all of our authorized customers, so a retailer's in line. So they, you know, they their promotions come up, you're on a promotional calendar and sort of that that, that takes away that that level of price matching, or at least everybody's moving under a similar calendar visa vie your promotional schedule. And then you get into your advertising control. So you're controlling SERP and things like that in terms of how people can advertise your brand. And now you can appropriately represent yourself on the search engine results pages and make sure that that's taken care of, then you have your brand protection side of things, which is that the counterfeits and the infringements and things like that coming from, you know, really illicit resellers doing doing that. And so it's the combination of all of that is what you have to bring to bear when you are dealing with that spider web. And I just want everybody to understand if you're going out there thinking, you know, map is the answer map applies here. If you can see my cursor to your retailers, the unauthorized seller legal stuff does not apply to your authorized customers for examples why people a lot of times we'll combine the two, you have to create your authorized selling world and get them all in their lanes. And then you know, to the extent you have the things like the counterfeits and all of that you have to bring that into the mix too. But those are the that is the the slate of capabilities that you have to bring forward to deal with what really is the root cause of the issues. And so, you know, if anybody wants to go deeper on any of that I'm very happy but I just think it's fundamentally important to understand the limitations of each have these little red circles, and really what they apply to and what they don't apply to, because that will help you to shape your strategy or to know that the strategy that you're pursuing has really no prayer of getting to the result that you want to get to.

Aaron Conant 20:15

Yeah, how long does that? And others if you want to jump in, just feel free to unmute. I'm going to jump around to a few more people. Thanks, Chris and Kyle, for jumping in earlier. Like, how long does this take to put in place?

Daren Garcia 20:30

Um, I mean, we would call sort of all of this, these things of foundation. You know, that would be that'd be kind of here, the legal the legal foundation. You know, most brands have, they're committed and they have alignment between sales e comm and their internal legal can get through that, and about 60 days, maybe 90 days. So that's 30 45 days to build it and then to roll it out to your customer. Okay. Yeah.

Aaron Conant 20:55

So the tech after that is near meaningless. Oh, it's not meaningless, but near meaningless.

Daren Garcia 21:05

Yeah, so I think that the reality is that sellers fall into all sorts of different buckets. And we believe very, you know, deeply in this concept of precision, I mean, you see, it sort of referenced here. And that is, you know, if you're thinking about this from a control space, as opposed to like a whack a mole space. On the control side, what matters is what is the percentage of sales controlled by your authorized seller, it's not how many people are selling or who's violating map or anything like that, it's what percentage of sales to you or your authorized seller. Now, where the precision comes in is understanding from like the unauthorized perspective, who is taking the most sales, because that's where you want to focus your resources from a budgetary perspective. And so you know, somebody that's doing $500 A month of your product is probably going to be far less invested and willing to stand their ground than somebody that's doing 500 grand a month in your product. And so if somebody's doing $500,000 A month in your product, like, they're probably sitting on a bunch of supply, and they're going to test you. And, you know, I think that the reality is that you're going to have to be willing to show them a that you have the foundation needed to be able to sue them, but be, you know, if you have certain of those sellers, you may have to take one to task and you know, sort of prove your point with one. Um, you know, we've done 10s of 1000s of enforcement actions over the years, and I think we've only had to file around 250 or so lawsuits for all the, you know, which is a very small percentage, but we've had to do it in certain instances. And when you do do that, it sends a very clear message. You know, you just cite that up and down, hey, we just sued, you know, delta versus Joe Smith, you know, it can be very easily be delta verse, Sally Jones, if you don't, if you Sally, don't listen to us. But I think it's a fair point that those those very entrenched sellers will require more work. And in many companies say, you know, what, we're not interested in suing people. And that's totally fine, we get that. And so when that is the case, it becomes much more important that you start getting into what we call diversion diagnostics, and figuring out where they are sourcing their products. You know, and look, I mean, there isn't a magic bullet to all of this, if you can't pull the super aggressive enforcement lever, you have to pull the front end lever, meaning demanding sell through data from a distributors doing the hard work to do the data analysis in terms of who is the likely source of this, resellers products and really digging in and working to cut that off. I mean, that's a whole other a whole other webinar to go through that stuff. But, you know, understand that, that, that something's got to be pushed hard, whatever you can push hard in your organization just meant zeroing in on what that is. I mean, to your point, it just the last thing I'll sort of say is that, you know, to the extent that this isn't clear already, to everybody on the phone, like nobody is coming to save you in this in this spot, not Amazon, not Walmart, not any marketplace, you know, it in the only path lies in self help, and you have to position yourself in a certain way, put certain things in place and take control. There's nothing in brand registry. There's nothing that Oh, I have an API in the Amazon that all these you know, software people will tell you and whatnot like that. That is it is solely and exclusively a function of self help and putting the things in place that you have to put in place.

Aaron Conant 24:54

Sometimes you have to push it all the way. And then once you've busted through, they all share it And, Daren, I'd love to hear your thoughts on this. Do you find this because you've gotten with so many with so many brands? Do you find that once you've really pushed it to the point of almost legal action or legal action that like everybody just goes look for somebody else to pick on? Like, you know, yeah, he will say, and they're all talking.

Daren Garcia 25:20

I mean, anybody can go anybody can Google Vorys, and Amazon. And you know, you'll just see all of the Reddit threads and things like that, and people discussing how to how to deal with us, because, you know, they all they all do start talking. And so yeah, I mean, some brands do have to sue somebody. I mean, again, it's a very distinct, distinctly small percentage of things that ever even merit commercially going down that far, but but it does happen, and you have to have the foundation in place to be able to deal with me. And Daniel, I mean, just the everything you said, I mean, what you're talking about is a 360 control strategy leading on distributors going after people on Amazon, if you have counterfeit stuff, working through transparency, you know, all of that. It's just it is a very multifaceted approach that brands need to take, and it's just people get still so hung up, and oh, I need a MAP policy or something like that. And I just want to say you really, and it's not even, you know, super expensive to do these types of things. It's just putting the you know, what we always say is the right tool, right tactic, right time to get the right commercial result is what we're always pushing for.

Aaron Conant 26:34

So really quickly talking about map, Nick writes in a question, is it crucial to have a MAP policy then?

Daren Garcia 26:40

No, no, I mean, it. Matt, we don't have the data on this. So you know, but my assumption, my guess would be that we write more MAP policies than probably anybody in the world. And map, again, is a tool. It's a, it is a document that applies only to your authorized customers, those with whom you can cut off the supply of product, if and when they violate your policy, and you enforce it. And all you're saying is I just want to do business with retailers that advertise my product at or above a certain level. And if you don't, yeah, I may have some strikes and whatnot, some some lesser to your punishments, but I'll ultimately move away from you. And it's your choice whether to follow it or not. And it's my choice whether to do business with you or not, that is all that a matte policy is, they can be a great kind of icing on the cake, once you have done the hard work to establish control. Because if you haven't, and let's say you sell one piece to Amazon to Walmart, and you have 60 resellers on the SKU on Amazon as well, you have totally, you know, nothing in your distribution channel. And people will call me 10 times a week in that scenario and say, and I'd like I think I want to do map. And the reality is, you don't have a prayer of doing map until you rein that in, because all of your good customers would love to follow your MAP policy, don't have any ability to compete until you've cleaned it up. Otherwise, they're just going to be penalized for wanting to do the right thing and invest in your brand when all of these others aren't. And so we would say that, get the control piece down, clean up your marketplaces, which is where everybody is looking at scraping 24 24/7and then put your map in.

Aaron Conant 28:28

Awesome. So another question comes in. So when you need a distribution contract instead of a MAP policy.

Daren Garcia 28:33

Well, kind of going back to our schematic here, let me see if I can just get one that's don't have to give bore you with all of the you have to control that distribution channel with your distribution policies. Okay, so you basically have to tell distributors, hey distributor, you're my authorized distributor, you can sell to authorized resellers. What's an authorized reseller? An authorized reseller is somebody who has received a copy of my reseller policy from you. My MAP policy if I have one and is not on my do not sell list, so they're not blacklisted. So that's the level or I mean, that's, you know, very quick simplification but those are the key tenants of a strong distribution control channel control strategy.

Aaron Conant 29:22

Awesome. So the next question that comes in is, you know, how does this translate internationally since map isn't applicable?

Daren Garcia 29:36

Yet again? I just I don't even like golf, but to use a you know, a golf analogy would be like, well, how can I you know, possibly play golf if I don't have you know, one club in my bag? And the answer is, that's just one that's just one club and you can get around the course just fine without it. Because map again has nothing to do with unauthorized sellers and control. It is Just a communication to your customer saying, Hey, I'd really love it if you advertise that this price. And so I'm in Europe and map is not there's no form of resale price maintenance that's permitted over here map as a former resale price maintenance. And so the strategies internationally, revolve revolved I mean, in Europe, Australia and places like that, where the competition laws are very different and very strict. They revolve around marketplace bands, so prohibiting your customers from selling on marketplaces, they revolve around setting up things like what's called selective distribution, where you can totally curate everybody who's selling your product across brick and mortar online, and marketplace. And those sorts of things where you're creating essentially closed networks of authorized sales that in turn, you know, give you the ability to enforce against others are interfering with that.

Aaron Conant 30:59

Got it. And just a reminder to others, if you have questions, drop them in the chat there, or just unmute. And we'll, we'll bring you back into the conversation here, you know, over the next few minutes before we start to wrap it up. So as a whole, like, where do you see the future of this going? Yeah, you have to have tech at some point in time. Right? Yeah, no, no,

Daren Garcia 31:22

we have our own. I mean, we have our you absolutely do. I mean, we have our own,

Aaron Conant 31:27

I can't monitor this stuff.

Daren Garcia 31:31

You have to I mean, that's here. So you have to strategically say, and this is just, again, whether anybody on the call works with if you're doing this all internally, great, but this is the process that you need to follow. On the strategy side, like this is not something an eCommerce person can do by themselves. You have to align sales, you have to align legal, you have to say what are we truly, really trying to do commercially? Do we want to own the channel? Do we want to grow the channel? Do we not want to be there at all? Okay, what are we really trying to do strategically because that will dictate everything else? From there, going to your foundation, making sure that for example, if you have an unauthorized sales problem that you put in an unauthorized seller, Legal Foundation, there's no other there's no other way around that. And, you know, it wasn't us, I saw there's a there's a team at the Cato gates firm that practices in this space a little bit, too. And I saw him going back and forth on LinkedIn yesterday. And he was just he's saying, I wish brands would understand there is no magic bullet to this, you have to put in the foundation. Okay. And once you get that foundation in place, now we have to go out and use our monitoring and our data insights to say, where is our strategy being disrupted? Meaning where are we actually losing sales having our brand value disrupted? Because it's too big. The channels are too big. I forget who it was, I think it was Daniel was saying, you know, there's always new people coming in there will always be that these are open platforms, but you want to look at it from a control perspective and say, What when am I falling below winning nine times out of 10? Okay, when am I falling below, you know, 90 95% of sales going to my authorized seller, maybe a bit higher and like a one p and a one P model. And who specifically is doing that to me, and that's where you want to focus. And so anybody that's out there, monitoring map across 100 different websites and on marketplaces and things like that, like you're missing the mark and you're wasting money. You want to apply the right monitoring and insights in the right channels that tell you where you're being disrupted in a way that can be actioned. So we get that monitoring now we know Okay, now this is what's causing us problems. Now, you have to be able to enforce across the full spectrum of potential disruptors. So that could be a reseller policy enforcement, meaning it's one of your customers or an indirect customer of yours, it's selling cross channel. Okay, you'll see that a lot with people that sell to a lot of independent retailers that sell through like professional channels, so like doctor's offices, chiropractor offices, you know, spas, salons, those sorts of things, you have to be able to offer, enforce your authorized selling policies, yes, you have to continue to be able to do brand protection. So if somebody's selling counterfeit products, or bringing in stuff from overseas, and like a parallel importation situation, absolutely have to be able to do that. But for most of you, the biggest fight will be in grey market mitigation. How do you stop unauthorized sales of your product and that is what we need, you know, the legal foundations for on the on the enforcement side and to be the ability to get in and do those diversion diagnostics on the on the back end side. So I think where all of this is going is just brands, you know, continuing to shift into this and realizing up to the to the C suite level that our commercial success long term really depends on how much control that we have because I'm going to be just Think about it in the marketplace space. And there's a, there's a company called pattern that sort of pioneered this equation very simple. But they're the first ones to start talking about it publicly say, Look, your eCommerce revenue is a function of traffic times conversion times price. And each one of those variables, your traffic, I think it was, I think I don't, Chris, I believe was talking about using the marketing, you know, and all that, well, you know, all of your, your ads and all of that the efficacy and everything depends on when the brand owns the buy box on Amazon. And so that's dependent on control, then conversion, okay, how good is your content? How he you know, who does? Can people come in and manipulate your content? All of that depends on control, then where are your ESPs? Depends on how much control do you have. And so each one of those variables becomes harmed when brands lack control revenue suffer profits upper. And so I just think that, squaring that, that, you know, friction between a traditional distribution model that wants to be scaled out as far and wide and an online distribution model has to be very tight and very focused. And in getting those two worlds, harmonized is just a very big challenge today that brands are working through. And I just think it's going to, you know, you started this conversation here and talking about, you know, just a bigger focus on how are we going to eke out, you know, profitability in this environment. And you're just I think it's going to become a bigger and bigger deal.

Aaron Conant 36:28

Yeah, I mean, that's what I'm hearing over and over again, in it mean that this interesting is the pattern in this around this issue, which over the past, it's repeated over and over again, it's in performance marketing, right now, it's in content, where, over the past few years, you know, we've ramped up, and we've got eight different, you know, solutions, that all do something different that, you know, at this point in time, we need to find a holistic way that they all either interact together or find one solution that does it all together. But as it's like, we're in the time now of Digital Strategy. Right? We've got every tool imaginable, every tool we ever wanted, right? Pretty much except for a multi touch attribution tool, we've got really, really works, we've got every other tool we could ever want. It's how do we actually put a strategy behind how we're using all those tools? So that comes to like one more question. And then if you have others, you know, just unmute or drop into the chat here. Where does this fall within an organization? Big thing? Is a big, big thing. Is this just ecom? Is this? I mean, obviously, we have a brand protection team.

Daren Garcia 37:33

Yeah. But the brand protection teams, the brand protection teams, you know, are often, you know, they may have non legal folks that, that do some of that, but a lot of in big organizations, it typically rolls up to the legal departments. On this issue, what you'll find is that many times people have gone to their lawyers internally. And the lawyer said, Well, there's nothing we can do about that. Because they, you know, again, thinking they're not familiar with illegal foundations against the grey market. And that's sort of the traditional response. But, you know, that's been proven incorrect over the past half decade. But, you know, that may be where their minds still is. So you may have some, some work to do there. Most people that reach out to us in this space are eCommerce, people that have been told to fix this by somebody, you know, more senior in the organization, you know, some type of of C level executive chief revenue officer, you know, those types of those types of personas, I think, at the end of the day, when, when you when, when it comes down to taking something forward, it's still often eCommerce led, but they have at the table with them sales and legal key stakeholders. And with that team, you can get it forward, it doesn't matter so much, who owns it, but those three groups departments, however you refer to them need to be there.

Aaron Conant 39:04

Awesome. Awesome. I don't have any other questions coming in here. So I always like to give people a little bit of time back at the end. I encourage everybody, you know, have a follow up conversation with Daren and the team. Over there, they're doing some fantastic stuff. I'm also going to if you want to thumb through, I'm going to put a link to the podcast because I know Daren, I've done a podcast with you on this subject. But I've also done you know, a podcast with Whitney and Blake and we'll drop that into the chat here for everybody to see. You know, basically on the podcast, everybody, we don't monetize it or anything like that. I'm just going through the resident experts across the industry and kind of doing a rundown like this but in a easily consumable format. So I encourage anybody reach out, take a look at the podcast scroll through you'll see Whitney and Blake on one and you'll See Daren on one. And then actually this next week we're launching one with I think Tim Armstrong overflow code. So should be fun. But with that, thanks again, everybody who was able to jump in. Thanks for Thanks for the great questions that came over, Daren. I mean, you guys are great friends, I want you to be back in the state so we can do another dinner together. But with that, we're going to wrap up this webinar today, again, look for a follow up email from us. I'd love to have a conversation with you and encourage anybody if you need more information, follow up with Daren in the team. Daren, anything else from your side?

Daren Garcia 40:34

No, no, thanks, everybody. Yeah, like Aaron said, reach out. I mean, I, you know, obviously I'd love to work with you. But truth be told, I spend most of my time just talking to brands and educating on the boat. So I'm happy to talk at any time, if anybody wants to reach out, so awesome. Yep. Thanks,

Aaron Conant 40:50

Daren. Thanks, everybody for dialing in and we'll chat for sure. Alrighty. Take care everybody.

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