Holiday decor is now on the shelves, people are making plans for gathering and some even have their shopping well underway. That means it’s too late to make adjustments to your Q4 tactics or holiday e-commerce campaigns…right?

Not exactly. There’s still plenty you can do to manage the holiday rush and ensure a smooth season. Our Rithum Managed Services experts put together a list of “quick hits” to help you tie a bow around your 2022 holiday efforts. 

10 Last-Minute Holiday Planning Tips

You may have gotten a head start this year in anticipation of holiday challenges like supply constraints and economic pressures. Or maybe this holiday season got ahead of you and now your team is scrambling for holiday e-commerce best practices. Regardless, we recommend these quick tips to help you tie up loose ends as the holiday season approaches.

Ensure Stock for Fulfillment Services

If you work with a third-party fulfillment service like Fulfillment by Amazon (FBA) or Walmart Fulfillment Services (WFS), you should be in the process of stocking them with plenty of your top-selling items for the holiday. Ensure adequate supply now so you don’t have to spend money or increase stress rushing later.

Identify and Publicize Your Last Ship Date

Calculate your last possible ship date to ensure delivery by December 25. Pair this with your shipping carrier’s last send dates and make it clear to customers so there are no surprises.

Account for Lead Times

Review your on-time delivery metrics, and assess whether or not you need to adjust lead times for fulfillment and delivery.

Prevent Overselling

Keep tabs on inventory and listings to prevent overselling, especially on Amazon, resulting in frustrated customers. Implement a “supply buffer” so you always have some stock on hand.

Avoid Big Changes

Now is not the time to be trying something new. Avoid big changes in your e-commerce setup, including pricing strategies and product description page setups. Instead, adopt an “all hands on deck” approach that highlights your biggest strengths and doubles down on advertising and promotions. 

Know Your Deadlines

Anticipate marketplace cutoffs for adding new products to the site. Adjust accordingly and list all your items as soon as possible. 

Set Up Critical Data Monitoring

Make sure reliable monitoring is in place for your feeds, quantity/price updates, orders, listing errors and top-selling items. That way, you can stay focused on urgent needs and the bigger seasonal picture when you’re in the thick of holiday selling. 

Double-Check Promotional Pricing

Double- and triple-check any promotional pricing you have scheduled through a deal planner or promotional fields. Check pricing is correct and dates are formatted correctly. Make sure to allot extra time for your feeds on marketplaces that have longer processing times.

Boost Last-Minute Advertising

Go big! Plan to boost your advertising and retail media spend in the final weeks before Cyber 5 and Christmas. This is also an appropriate time to increase your budget caps. 

Watch Marketplace KPIs

Keep a sharp eye on your marketplace KPIs to avoid suspension during Q4. 

The Time Is Now

This is what you’ve been waiting all year to execute. Make sure your program is all buttoned up to not only put your best foot forward among digital shoppers, but also ensure the best turnout at the end of the 2022 holiday season. 

Need help? Rithum Managed Services leans on decades of holiday planning expertise to help e-commerce brands and retailers get ready for the biggest selling season of the year. Contact us for guidance and a more confident approach to your Q4 sales.

The post Scrambling Before the Holidays? Try These 10 E-Commerce Tips appeared first on Rithum.

Online marketplaces and cross-site price comparisons have made e-commerce more competitive than ever. How can you keep things fair among sellers while maintaining your brand integrity? 

Price floors and recommended resale values are key to leveling the playing field, but they can be difficult to implement when they involve so many subtle nuances. 

What Is a MAP Pricing Policy?

MAP stands for “minimum advertised price.” It is a policy a brand or manufacturer imposes on its sellers not to advertise a product below a certain threshold. 

For example, if a jeans manufacturer sets a MAP of $48.99, neither brick-and-mortar boutiques nor online marketplaces can advertise prices below that mark. 

Technically, distributors can still sell below the price, they just cannot publicly advertise below the set value. For example, a vendor who sells below MAP over the phone or behind a members-only website is still within the confines of the policy. 

How is MAP different from the manufacturer’s suggested retail price (MSRP)? MSRP is the price the manufacturer recommends selling a product at, while MAP is the lowest possible advertised price. Retailers don’t have to choose the MSRP (it’s more of a starting price), but the amount helps standardize prices across sellers.

It’s important to note that MAP policies primarily only apply in the US and Canada. In most cases, MAP pricing is illegal in other countries like the UK, where it is seen as a type of price fixing. 

What Are the Benefits of a MAP Pricing Policy?

MAP policies are important because they protect multiple parties, including brands, retailers and consumers. In fact, they benefit the entire market because they:

• Keep competition alive. MAP policies were primarily enacted to maintain fairness among distributors. By setting a minimum advertised price, brands prevent Seller A from undercutting Seller B and winning all the sales. Not only does this benefit a brand’s relationships with multiple sellers, but it fuels the free market with healthy competition instead of creating monopolies.   
• Protect profit margins. The prevalence of automated repricers has made it easy for sellers to stay in close competition with other retailers. Without a MAP policy in place, sellers are forced to follow suit with vendors who continually slash prices, resulting in a “race to the bottom” that erodes margins for everyone. 
• Maintain brand integrity. MAP policies are especially beneficial for luxury brands or manufacturers with high-ticket items. If a distributor sells a product significantly below the suggested price, customers will begin to see the item (and subsequently the brand) as less valuable. 
• Limit customer complaints. Consistent pricing also limits customer inquiries and complaints about finding cheaper prices elsewhere. MAP pricing keeps things fair among brands, retailers and consumers. 
• Increase sales channels. When competition is healthy, it encourages more sellers in various channels, whether offline or online. It also gives smaller resellers a chance to compete with major retailers. 

What Happens if a Seller Breaks MAP Policy?

MAPs are manufacturer policies, not contractual agreements with sellers, meaning they aren’t enforceable by law. In fact, manufacturers who require distributors to sign a MAP agreement are in violation of US antitrust law. This is according to the Colgate ruling, which stated that manufacturers may set pricing policies as long as sellers remain independent parties that are free to abide by them or not (while risking partnership termination from the brand). 

Each manufacturer may set its own policy in terms of dealing with MAP violators. Some companies may provide the distributor with a warning, while others choose to immediately terminate the relationship. In turn, resellers must determine if selling below MAP is worth the risk of never working with the brand going forward. It is in the best interest of sellers who want to maintain strong manufacturer relationships to adhere to MAP policies.

Why would a distributor even want to sell below MAP or market value? 

• To move inventory. Retailers who are eager to offload old inventory may be willing to take a loss just to make room for new products that will sell quicker. This is why it’s important for brands to reassess their MAP values from time to time, especially after releasing new generations of products that automatically lower the value of older versions.
• To win the buy box. Price-conscious shoppers will always choose the best deal. Sellers who price below MAP opt to lower their individual product revenue instead of withstanding slow or no sales at all. 
• To gain positive reviews. Some sellers price low to keep customers happy and boost ratings for their shop that will remain long after parting ways with the manufacturer. 

How Can You Set a MAP Pricing Policy?

Plenty of MAP pricing policy templates can help you draft your own, but we recommend working with your legal and compliance team or an e-commerce expert to tailor your approach and devise a plan that works for you and your reseller network. As you create your own MAP pricing policy, remember:

• Draft a unilateral policy, not a two-way agreement. Pricing contracts put manufacturers at risk of violating antitrust laws. For this reason, you’ll want to work with experts that can position your MAP as a one-way policy, not a contract that sellers are federally obligated to follow. 
• Don’t consult retailers. Write your policy independent from retailers or other selling partners so the price you set is free from perceived favoritism or price fixing.
• Include exceptions that make sense for your resellers. Consider offering specific situations and seasons where sellers can “break” the MAP policy to incite buzz and increased sales. This may include peak shopping times like Cyber 5 or other holidays that increase demand for your products. 
• Communicate clearly. Make sure your sellers understand exactly what they’re getting into when they partner with you. Opt for plain language instead of legal jargon unless necessary, and provide other resources like videos, checklists and examples to drive home the point. 

You’ll also want to devise a plan for dealing with noncompliant vendors. Will they receive a warning? Will you send written communication? Or immediately terminate? Remember to make it clear that by law, sellers are free to sell and advertise any price they want — but you also have the freedom to cut ties. 

Set the Right Price with Rithum

Pricing your products is hard enough without worrying about minimum advertised amounts and seller behavior. But it’s absolutely necessary in a world of increasing channels and marketplace competition. 

Rithum’s experts can guide you through the process, acting as an extension of your team to devise a pricing strategy, implement automated repricers and make the biggest impact on your profit margin. Rithum Managed Services draws on years of e-commerce experience to execute the best repricing options to accomplish your goals and continually monitor performance as circumstances change. 

Contact us today to learn how Rithum Managed Services takes the stress out of creating an ironclad pricing strategy. 

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Which would you rather choose: a $49 product with free shipping or the same product for $39 plus $10 shipping?

Free shipping was once a fast-growing trend in e-commerce. Today, consumers expect it for every online purchase. But someone has to pay for it.  

So, is it better to pass shipping fees to customers as part of perceived free shipping — or to itemize transactions so shoppers see a lower price and shipping added on?   

The Psychology of Online Pricing

There’s a reason we’re drawn to words like “discount” and “free.” Instead of weighing options equally in a traditional cost-benefit analysis, we fail to factor in the unspoken costs when products and services are free. This is called the zero price effect, or the irrational urge to get free stuff. Under this model, the free option always wins.    

Conversely, humans also tend to correlate higher prices with better value and quality. Robert B. Cialdini, an expert in the field of compelling selling tactics, describes this phenomenon in his book, Influence: The Psychology of Persuasion:

“Consider the strange behavior of jewelry store customers who swooped down on an allotment of turquoise pieces only after the items had been mistakenly offered at double the original price. The customers…were using a standard principle to guide the buying: expensive = good.”

But is shipping something people perceive as having different levels of quality based on price? 

What Consumers Say About Shipping Costs

The margins are thin between consumers who prefer lower-cost shipping to free shipping. According to a recent Shippo report, 49% of customers opt for lower cost shipping while 40% choose free shipping. (The remaining 11% just want their purchases fast.) Yet, when given the choice between free shipping and fast shipping, an overwhelming 83% prefer free. 

The report also states that 21.5% of merchants now always offer free shipping, whereas 31% don’t provide the option at all. Retailers may not be hitting the mark according to consumer responses, which tell us that more shoppers are only purchasing online to access free shipping, and some will even swap stores to find it. 

Source: Shippo, 2021

How to Decide between Free Shipping and Discounted Prices

There’s no one-size-fits-all approach to fulfillment pricing that works well in every instance. As with most e-commerce strategies, it should be tailored to your business. 

Conduct a Cost-Benefit Analysis

Before moving forward with one strategy over another, consider doing a quick analysis to determine which option is likely to help you gain more sales. For example, if specific SKUs have experienced a recent dip in sales, it’s probably not the best time to start increasing the price. On the other hand, you may risk lowering the perceived value of a product if you decrease the price too much when sales velocity is strong.

Keep in mind that you can change your strategy as needed. During peak holiday seasons, when consumers tend to spend more, you may want to use free shipping thresholds to increase average order value (AOV) and make shoppers feel like they’re getting a good deal. Just be sure your advertised minimum threshold exceeds your average basket size to make it a cost-effective pricing strategy.

Consider the Marketplace

The tactic you ultimately choose will depend on the marketplace or platform you sell on. It’s usually a good idea to vary your fulfillment pricing strategies from one e-commerce channel to another. For example, you might offer a best-selling product at one price on your e-commerce website, and then list that same product at a different price with multiple shipping options on Amazon. Diversifying your shipping pricing strategy across channels can help you reach different audiences with slightly different needs.

Use Automated Repricers

Automated repricing tools can also help you stay on top of changing variables. Whether you’re looking to win the Buy Box or simply move stale inventory, you can use algorithmic or rule-based pricing to secure the best offer spot while still maximizing profit. You can even predict how your repricing rules will compare to other retailers before you set your strategy. 

Rithum offers fulfillment services and repricing technology to automate your e-commerce processes and help you make smarter decisions. When you lack dedicated resources to constantly monitor competitor prices or you’re just not certain what direction to take, repricers remove the hassle, while still awarding you the biggest return possible. And you can optimize your fulfillment for the fastest, most cost-effective delivery. 

Still unsure what fulfillment pricing model is best for your business? Rithum Managed Services can help with a customized plan to fine-tune and automate your strategy.

Editor’s note: This blog post was originally published in June 2020 and was updated in July 2022.

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