Midland Radio Transitions from Vendor to Seller Central Resulting in 64.4% Net Revenue Increase

Midland Radio is a consumer electronics company leveraging Amazon Vendor Central to reach a new audience. Although Midland joined the Amazon 1P platform hoping to increase sales, the brand quickly realized a biproduct of the relationship was decreasing margins for their Amazon business and retail price erosion across ecommerce and brick and mortar channels.

The issue started with an unsecure distribution network. Sellers were sourcing product directly through Midland and through 2 step distribution. The result was up to 30 sellers competing for buy box on the same Midland products and the brand had little to no knowledge of who was selling the product or where they received it. With multiple sellers competing for the buy box, ASPs were driven down and product pages became unstable due to multiple contributions. Declining ASP and eroding margin for Amazon as they matched reseller price. Brick and mortar chains also took notice. One large national retailer pulled Midland SKUs from their assortment, siting lack of competitive pricing.

On top of all this, Midland Radio was dealing with increasing allowances from Amazon 1P. With lower ASPs and margins eroding, Amazon was forced to push back on Midland for increased allowances, turning Amazon into one of Midland Radio’s least profitable channels.

In addition to declining margins on Amazon, brick and mortar stores took notice. On one occasion, a large national retailer pulled Midland SKUs from their assortment, sitting lack of competitive pricing as the reason. It was clear arbitrage pricing on Amazon was impacting the entirety of Midland’s distribution network.

The last step to a successful transition from Vendor to Seller Central was building out a timeline for when and how the transition would take place. Amazon has a strict policy against selling products to both 1P and 3P at the same time, so Brandwoven helped select a proper cut-off date for when purchase orders would no longer be accepted on Vendor Central. The entire process typically takes 1-5 months, depending on how many products a company wants to sell. For Midland Radio, after 5 months their Amazon Seller account sales eclipsed what they had been making on the former Vendor Central platform.

Once Midland Radio stopped accepting orders on Vendor Central, Brandwoven began building the brand’s presence on Seller Central. This process included setting up a Seller Central store, discussing logistics and inventory, publishing high-value content to generate traffic and conversions, and launching marketing campaigns.

See an overview of Brandwoven’s Seller Central action plan below.

Thanks to Brandwoven, Midland Radio executed a seamless transition from Vendor Central to Seller Central. As a result, Midland Radio saw a 64.4% net revenue increase on Amazon! This is a result of both increased margin and increased volume driven by Brandwoven’s actions. Reseller management and enforcement also resulted in 93.6% within the first 5 months of the transition. Furthermore, the inventory forecasting process Brandwoven executed allowed Midland Radio to maintain a 94% in-stock rate during Q4, the busiest time of the year.

The average sales price of Midland’s products also improved, showing a dramatic increase in the revenue per unit sold. Because of this, a major big box store that previously dropped the brand due to price cutting margins brought Midland’s products back in-store.

By working with Midland Radio, Brandwoven demonstrated that transitioning from Vendor to Seller Central can help increase ASPs, grow sales volume, and ensure long-term profitability on Amazon.