Recovering revenue is essential to prevent damage to your bottom line and brand reputation. Unfortunately, revenue leakage is inevitable for any business but can be recuperated.
In this blog, we have partnered with Getida to highlight the importance of revenue recovery for a profitable eCommerce business and outsourcing revenue recovery and brand protection to expert partners like GreyScout and Getida.
What is revenue leakage?
Revenue leakage occurs when a business loses potential revenue due to failing to capture it for various reasons. Customers have paid money and bought your product, but the sale and the money do not get attributed to your business’s P&L, and this can significantly impact your bottom line.
E-commerce fraud resulted in $40 million in losses in 2022, which is expected to increase. It is estimated that 42% of companies experience revenue leakage up to 5%. While it is problematic to prevent fraud from happening, revenue can be recovered.
What causes revenue leakage?
Various factors, such as discrepancies in Amazon FBA refunds, unauthorized sellers, counterfeit products, unauthorized discounting, and the encroachment of distribution agreements, can cause revenue loss and brand abuse.
On Amazon’s platform alone in 2022, they stopped over 800,000 attempts of account creation by bad actors and more than 6 million counterfeit product units.
How to identify revenue leakage
You can isolate unauthorized sellers by monitoring who sells your products on all e-commerce marketplaces like Amazon, eBay and Walmart. Price erosion is another factor that can indicate revenue leakage.
When 3P unauthorized sellers sell your products or parallel imported products without your consent, they can undercut a product’s price. By doing so, they can win the Buy Box on Amazon, which can pressure your business to offer a more competitive price. Losing the Buy Box could mean you lose sales.
Not only that, but customers’ discernment of your product can diminish, which lowers its perceived value. In some instances where products are damaged, expired, or counterfeit, they can also harm consumer safety.
Why is revenue recovery important?
Revenue recovery is indispensable for any e-commerce business to protect your reputation and bottom line.
- Increase your bottom line.
Counterfeit products and unauthorized sales can significantly impact your bottom line, but recovering your revenue can help you maintain financial stability and be more profitable.
You also have more opportunities to invest in your business, which allows you to grow.
- Protect your brand
Counterfeit products can be materially different and of a lower quality, damaging your reputation as the customer likely won’t realize it is not the original product.
Unauthorized sellers can sell damaged goods or provide inadequate customer service, which can dissuade customers from purchasing these products again and damage your brand’s equity.
- Increase customer loyalty
When you address unauthorized sellers and counterfeit goods, your customers can be confident that it is the original when they purchase your product.
Your customers will trust they will receive a consistent and smooth customer experience, encouraging repeat purchases.
- Market positioning
Ensuring consistent pricing across all authorized channels can maintain your market positioning.
This means your customers’ perception of the value and quality of your product is protected. Consistent pricing reinforces your value proposition and helps to encourage loyal customers.
- Minimize legal risks
In some cases, counterfeit products can be challenging to separate from the original, which means a customer could generate a legal claim against your company if they find a problem with the counterfeit product.
What are the Challenges with revenue recovery?
When you are mindful of revenue leakage, it can be a multifaceted process to plug these gaps. Businesses face many challenges in recovering their revenue, including:
- Identifying unauthorized sellers
With 9.7 million sellers on Amazon alone, let alone other marketplaces, it is a full-time job trying to identify unauthorized sellers.
Identifying unauthorised sellers for any business is challenging before considering the tactics unauthorized sellers could use to avoid detection.
- Gathering evidence
It is not enough to identify any unauthorized sellers or counterfeit goods. You need evidence to enable your business to initiate action against these sellers.
When sellers are located in countries with differing laws, it isn’t easy to provide robust evidence and the time and resources to build cases for multiple infringers.
- Enforcement
When enough evidence can be gathered, undertaking legal action can be costly and complex.
You may even need to undertake legal action in multiple jurisdictions, making enforcement and legal action counterproductive.
How do you recover revenue and protect your brand?
You can recover your revenue through brand protection and revenue recovery strategies. Strategies you can include are:
- Implement a selective distribution model
Choosing authorized retailers and distributors should be done after careful consideration to ensure you can regulate how your products are sold.
Creating a process to do this will help sustain the standards of authorized retailers and distributors and enable your business to more easily identify unauthorized sellers.
- Enforce MAP policies in markets like the US
Creating a MAP policy and strictly adhering to it can deter unauthorized sellers.
When unauthorized sellers cannot advertise prices below the MAP, selling that brand’s product is less beneficial.
The MAP policy will also provide a framework for enforcement and legal action against unauthorized sellers, which will deter these sellers by the threat of enforcement.
- Use brand protection software
With brand protection software, revenue recovery is automated to save hours. It can quickly detect, authenticate, and take enforcement action against grey market sellers. Their revenue recovery and brand protection services can monitor online marketplaces for unauthorized sellers, counterfeit products, and other violations.
This can help you quickly identify sellers impacting your bottom line and address them before damage to your brand.
Brand protection software like GreyScout can also execute test purchases to authenticate sellers.
- Using Revenue Recovery services like Getida
If you are serious about maximizing your refund, consider hiring an FBA auditing service like Getida.
Recover revenue via Amazon FBA Refunds
Amazon FBA refunds offer Amazon sellers a way to recover losses caused by discrepancies such as lost or damaged inventory and fee overcharges, which can amount to 1% to 3% of their annual revenue. Sellers must file claims within specified timeframes, typically 18 months, to avoid forfeiting potential refunds. Common claims include lost inbound products, warehouse damage, and incorrect fee charges. Conducting regular audits is essential for maximizing refunds. Sellers can file claims independently, hire a Virtual Assistant, or use specialized auditing services like Getida, which can efficiently identify and manage discrepancies for a fee only when refunds are secured. Sellers can reinvest in their business by reclaiming these funds, turning potential losses into profits.
Amazon does not allow sellers indefinite time to claim their FBA refunds. Instead, you will have an 18-month window in which you can audit your records for discrepancies. Depending on the type of discrepancy, you may have even less time.
What types of claims can be made?
A range of discrepancies may merit an Amazon FBA refund, but there are a few everyday situations, including:
- Lost inbound products: If your inventory is misplaced during inbound receiving, you are eligible for reimbursement. Make sure you file your FBA refund claim within nine months in the US or within six months in the UK.
- Products damaged/lost in Amazon’s warehouse: Remember to file a claim if any of your products become damaged or lost while at the Amazon fulfilment centre. This is a widespread type of discrepancy.
- Fee overcharges: You are entitled to reimbursement if Amazon overcharges you on any fees. Keep an eye out for overcharges based on inaccurate product weights/dimensions. These overcharges can be incredibly costly as you will be paying more for every single product stored and shipped. When filing this type of claim, you must have accurate product information.
How Can Getida Help with Revenue Recovery
You may have tried filing FBA refund claims before, or it might be entirely new. In either case, finding an approach that gets as much money back into your pocket as possible is essential. Some sellers depend on Amazon to auto-reimburse them for discrepancies, but Amazon only sometimes finds all errors. To maximize your FBA refund, you must audit your account thoroughly.
Filing FBA refund claims independently is one option, but this means spending hours of focused effort reviewing your records. Another option is hiring a Virtual Assistant (VA) to help file FBA refund claims. Selecting the right individual is imperative since the VA will access your account. If you choose an inexperienced VA, they may miss opportunities for FBA refunds, ultimately costing you money.
Using specialized software like Getida will identify discrepancies in getting your money back. Then, Getida’s experienced case managers will take care of any follow-ups with Seller Support until your refund has been secured. This will leave you free to continue running the rest of your business.
How GreyScout can help you increase your profit
At GreyScout, our brand protection software can quickly monitor and detect online marketplaces for unauthorized sellers, counterfeit listings, and bad actors. The GreyScout platform can help verify product inventory and listings on eCommerce marketplaces like Amazon, eBay, and more to identify revenue leakage. Within the GreyScout platform, you can also create verification and enforcement actions against unauthorized 3P sellers suspected of infringing consumer safety and brand policies.
Using our brand protection platform, our client Lansinoh, a global leader in the baby product market, achieved a 14x return on investment in under five weeks. They also saw a 260% improvement in their Buy Box for priority SKUs.
By utilizing GreyScout’s brand protection software, your business can safeguard its reputation, increase customer loyalty, and enhance its bottom line.
