In subscription-based e-commerce, improving LTV and building brand strength are among the most important factors.
At the same time, these are also the areas where many online retailers are struggling to grow.
If you aren't focusing on measures to combat resale,
Implementing the right strategies could lead to improved LTV and stronger brand equity.
In the following two articles, we’ll be sharing information on measures to combat resale.
[1] The Risk of Our Products Being Resold and the Tactics Used by Resellers
[2] 6 Resale Prevention Strategies I’d Rather Not Share
In this article, we’ll discuss the risks companies face due to resale and
This article discusses the tactics used by scalpers that you should be aware of in order to take the right countermeasures.
Be sure to read this and use it as a guide for combating resale!
What Is Resale, Anyway?
Resale refers to the act of selling something you have purchased to someone else.
Platforms like Mercari and Rakuma, which many people are using these days,
Selling on flea market websites is also a form of reselling.
Reselling itself is not illegal.
However, those who make a living by reselling
The reality is that many companies are suffering losses at the hands of so-called resellers.
First, what risks do you face when reselling?
It is important to fully understand this.
Risks to Companies Arising from Resale
Since customers cancel after their first use, it becomes difficult to recoup the CPA.
When it comes to subscription-based e-commerce, many companies use advertising to attract new customers.
The advertising cost incurred to acquire one new customer is the CPA (cost per acquisition).
CPA is based on the expectation that newly acquired users will make multiple repeat purchases.
In most cases, these settings are calculated based on LTV.
However, if a reseller purchases the product at the special introductory price and cancels the subscription before the second shipment arrives,
We are unable to recover the CPA.
In addition, scalpers use various tactics to purchase items multiple times at the limited-time introductory price, so
Failure to implement measures against resale will cause significant harm to the entire company in the medium to long term.This is a possibility.
This could damage the trust in the product or brand
If there is a problem with a product you purchased from a reseller,
Buyers feel that way about the product or the company selling it
You can't help but get a negative impression.
For example, if the expiration date on a health supplement you purchased has already passed, or
For example, when cosmetics are not stored properly and you are unable to experience their intended effects.
From the company's perspective,We don't know who ended up with it, and,
We want to avoid a situation where products whose quality we cannot guarantee end up in the hands of our valued customers.That's how it is.
On e-commerce marketplaces, whether a product is being resold has a direct impact on sales.
Have any of you ever searched for your company's products on Amazon or Rakuten?
Are products other than those listed by your company appearing in the search results?
If there are products being resold on an e-commerce marketplace,
Since price competition occurs among identical products, this directly affects sales figures.
Resellers almost always list items at prices lower than those set by the company itself.
Therefore,Many users end up buying resold itemsThat happens sometimes.
Since specifications vary by mall, there are a wide variety of measures that can be taken to combat resale.
Even products being resold on e-commerce marketplaces,
This item was originally purchased at the first-time-only price offered through our company’s subscription service.
Therefore,The extent to which we can strengthen our in-house measures against resale is
A critical turning point in whether resales will increase or decreaseThat's it.
If we don't take action, we'll continue to be targeted by many scalpers.
Some resellers look for products they can resell
There are people who sell these compilations at high prices.
In other words,Once it is recognized as something that “can be resold,”
Unless measures are taken, reselling will continue to increase.That's the point.
By taking prompt action, we can maximize the company’s medium- to long-term profits.
Resellers' Tactics
Do you understand the disadvantages of reselling?
I know this, but I suspect there are many people who haven’t taken sufficient precautions, aren’t there?
To take the right measures, you first need to understand the trends in products targeted by resellers, and
It is important to have a clear understanding of the tactics used by scalpers.
Be sure to read this and use it to help combat resale!
Characteristics of Products Targeted by Resellers
The products that resellers target are,Products with a large price difference between the first purchase and subsequent purchasesThat's it.
For example, for a product that costs 1,980 yen for the first purchase and 4,980 yen for subsequent purchases.
As shown in the image below, this is a product that resellers can use to make money efficiently.
With subscription-based online sales, to make it easier to acquire new customers,
These products are often offered at a significant discount during their initial release, and that’s exactly what resellers target.
Therefore,The ultimate strategy to prevent reselling is to minimize the price difference between the initial price and the price for subsequent purchases,
Set prices so that reselling won't yield a profitI suppose so.
How to Obtain Products for Resale
Here are two ways resellers obtain products.
Please use this to help combat resale!
[1] Name, address, email address, phone number, etc.
Falsifying membership information to make multiple purchases at the first-time-only price
Resellers falsify the member information they provide at the time of purchase, as shown in the following example, and
I'll keep ordering at the first-time customer special price.
Enter and register Chinese numerals using various patterns
Pattern 1: 1-chome, 9-ban, 15-gō
Pattern 2: 1-9-15
Pattern 3: 1-9-15 etc…
＜メールアドレス＞
Gmail, Yahoo! Mail, BIGLOBE Mail, etc.
Mass-produce and register free-address seats
＜電話番号＞
Register a random number
For resellers who have registered using this information,
Taking a steady, step-by-step approach to implementing these measures will lead to the company’s medium- to long-term profits.
[2] Affiliates order products themselves and resell them
If you have set your affiliate program to "automatic approval" or "manual approval,"
There may be resellers among affiliate marketers.
In that case, scalpers would make a double profit as follows.
1) Performance-based commissions on sales generated through affiliate programs
2) Profit from Resale
When running an affiliate program,
It is necessary to configure the system in a way that ensures the quality of affiliates.
Summary
Thank you for reading to the end!
Do you now understand the importance of measures to prevent reselling in online retail?
Next time,6 Resale Prevention Strategies I’d Rather Not ShareWe will publish an article on this topic.
▼Click here for an article on 6 anti-resale measures I’d rather not share
Hide&Seek, the author of this blog, is,
We are a Fukuoka-based company that provides web consulting services.
As for reselling, whether through our own e-commerce site or an online marketplace,
We have implemented customized solutions for more than 40 clients.
We hope you’ll read our next post as well, and we’d be delighted if it helps you combat resale!
