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GUEST BLOG: The pitfalls of paid search

By Ben Lipscombe, Head of Biddable Media, Red Hot Penny

Your resellers are undercutting you on Google Shopping. What are you doing about it?

Google Shopping is one of the most important channels for generic online growth. But you might be shooting yourself in the foot thanks to the reseller agreements you have in place.

WHY IT’S A PROBLEM

Resellers will discount your product prices due to a lack of awareness around the agreements put in place and/or a lack of restrictions. And with no restrictions in place, your resellers can – and will – sell your products for cheaper.

By the time you realise it is a problem, it’s often too late and you’ll have very little room to negotiate because the agreement (without restrictions on undercutting) is already in place.

This not only strains relationships but also limits the potential you have to drive sales on your own site, so you need to be clear on expectations from the outset.

The ultimate point is that you don’t want to get beaten on price on Google Shopping. It’s essentially a product with a list of prices next to it so is hugely price sensitive.

Having a great brand and strong website won’t matter if someone else can get exactly the same product for cheaper elsewhere. And you don’t want to end up in the position where you’re struggling for growth because your own resellers are selling your products cheaper than you can.

The worst part? You’ll only have yourself to blame.

SOLVING THE PROBLEM

Google have recognised the issue and are bringing out a set of analytical tools that’ll help you pinpoint pricing differences across your product feed – so you can identify issues ahead of time and focus on the areas for growth.

But to help yourself out putting a pricing strategy in place when you first negotiate with your resellers will ensure you leave yourself with the option to sell online through your own site via Google Shopping without the fear of them undercutting you.

In most cases, there’ll already be contracts that exist with no mention of Google Shopping pricing restrictions. So, you’ll need to have a careful discussion with your resellers to reach a compromise without any party feeling hard done-by.

That’s why it’s so important to consider your reseller and partner Shopping agreements pre-emptively.

And remember, Google Shopping is a price-led channel, no matter how big your brand is.

NEXT STEPS

If you’re already in the position where you’ve got agreements in place but no pricing restrictions, or you’re considering working with resellers and don’t want to get tripped up, get in touch for advice on how to approach either situation so you can keep all parties happy.

www.redhotpenny.com

Industry Spotlight: Say hello to Mapp

Mapp is one of the largest independent digital marketing technology companies in the world.

Built by marketers for marketers, Mapp provides a comprehensive family of software and customer-centric services, including a sophisticated data management platform; tools that optimise email, mobile, app, social and web marketing; and campaign management and strategy consulting.

Mapp has more than 3,000 customers including Puma, PepsiCo, KFC, PacSun, Thomas Cook, Deutsche Telekom, Bon Prix, Cnet, Xerox, TUIfly, Lloyds Banking Group, TSB Bank, and Deutsche Bank.

Mapp Solutions:

  • Customer Engagement Platform: A cloud based customer engagement platform enables brands to leverage all data sources to understand customers’ behaviour and orchestrate engagement over email, mobile, social and web marketing with one simple dashboard. It also helps brands to execute fully automated, comprehensive, multi-step, and personalised marketing campaigns and drive targeted and relevant conversations across all channels.
  • Digital Marketing Services: A multi-channel, digital marketing services take brands the extra mile by helping them establish a lasting relationship with their customers and improve overall marketing results. Our customer-centric and data-driven services approach helps brands increase ROI, improve response rates, generate validated leads, enhance customer satisfaction, develop loyalty, and maximise brand profile.

Say #HelloMapp by visiting: mapp.com