Ordian MI Network Mapping to Uncover Unauthorized Selling Ring

The Result

Buy Box discounting reduced from 12% to 3%, saving USD8M+ per annum in lost margin via the elimination of distribution network leakage.

The Customer:

A Tier 1 Consumer Electronics Brand

The Solution:

After reviewing the data with the client a three-step approach was identified:

1. Ordian MI’s at-scale Mystery Test Buy program scheduled weekly purchases from the identified Unauthorized Resellers. This allowed us to identify the ‘shipped from’ address for non Fulfillment-By-Amazon Resellers, and obtain serial numbers for all products involved.

2. Serial number tracking by the client confirmed all products purchased from these Unauthorized Sellers were originally shipped to the same three Authorized Partners  – two Tier 2 retailers and one non-retail commercial customer.

3. When shipment dates and purchase dates were examined further, the data showed the Tier 2 retailers were supplying products into several Unauthorized Resellers prior to the start of promotions. Falsified  sell-through reports  claimed sell-through rebates for product they’d already sold.

4. The data also showed the non-retail, commercial customer was supplying 100% of their product purchases into Unauthorized Resellers. Its claimed construction business was a front used to obtain product in order to supply Unauthorized Resellers.

The Outcome:

The recommended action was to terminate the commercial customer and severely restrict supply and tightly manage the Tier 2 retailers, which resulted in:

Ordian MI reached out to its trading network for validation. The irrefutable conclusion: the commercial customer was a known supplier to multiple Unauthorized Sellers.

• Eight of the top 20 Unauthorized Sellers were removed as soon as the existing inventory was exhausted

• The supply chain was significantly disrupted for a further 18 downstream, Unauthorized Sellers, further reducing the inventory in circulation

This culminated in Buy Box discounting for the client being reduced from 12% to 3% within 6 months.

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