# Strategies for Balancing Amazon Vendor with Traditional Retail Channels

## Overview

## Podcast transcript

**Introduction**

Hi, and welcome to Marketplace Masters, the podcast where we go beyond the headlines to uncover the real strategies driving success on the Amazon vendor platform.

Paul Sonneveld

I'm your host, [Paul Sonneveld](https://www.linkedin.com/in/paulsonneveld/), and today we're exploring a fascinating intersection: how Amazon fits within the broader world of traditional retail and offline sales. To help me unpack this topic, I am joined by [Christoph Krauss](https://www.linkedin.com/in/christoph-krauss/), Associate Partner at [Prof. & Roll Pastuch](https://www.linkedin.com/company/prof--roll-%26-pastuch---management-consultants/), a leading management consultancy specializing in pricing, sales, and strategy. Christoph brings more than two decades of experience in marketing and sales, both as a senior executive with top consumer goods companies and as a trusted advisor to B2C brands navigating strategy, pricing, and commercial growth.

Christoph, welcome to the show. It's an absolute pleasure to have you with us today.

## Challenges in Balancing Online and Offline Channels

### The Evolving Landscape

Christoph Krauss:

I think as most of you might have noticed, times have changed. Amazon commercial is getting tougher, which is mostly due to limited dynamics in retail and other marketplaces. This puts most vendors in a situation where they have to balance their sales channels, especially with the growth lacking on Amazon in the last couple of quarters.

### Common Mistakes in Multi-Channel Distribution

#### Magnification of Issues

Amazon has always been a magnifier. It sheds light on existing issues that might have gone unnoticed. For instance, vendors see new players popping up in the buy box, which leads to questions about why other retailers can offer products there. Often, the root causes lie within the vendor's company rather than Amazon.

### Channel Prioritization Questions

#### Understanding the Consumer

When setting up or rearranging your channel prioritization, it starts with the consumer. Brands should ask themselves:
1. Who is my consumer?
2. Where do I actually sell to the target segments?
3. What does the consumer journey look like?

These questions create a foundation for a strategy that leads to prioritization.

## Pricing Strategy in Multi-Channel Distribution

### Starting with Value

When thinking about pricing strategy:
1. What is the value that my products provide?
2. What are my unique selling propositions?

Beginning with retail prices in the market, vendors should calculate the price waterfall considering retailer margins and trade terms. The key is to ensure that the minimum margin is high enough for sustainability.

### Challenges with Pricing

Many vendors find their pricing strategies on Amazon don't translate well into actual sales. This often leads to downward price spirals and issues with the buy box, requiring a strategic approach to repair rather than wipe the slate clean.

## Regulatory Environment

### Differences Across Regions

There are major differences in regulatory frameworks across regions. In the European Union, for example, brands are limited in how they can dictate pricing and enforce agreements with retailers. This often makes it harder to control distribution conflicts, particularly with online marketplaces like Amazon.

### Future Outlook

Looking ahead, Amazon is likely to maintain its dominant role across e-commerce markets. Vendors should focus on improving communication and collaboration within their organizations, especially between traditional and online sales teams, to navigate future challenges effectively.