A Tier-1 Consumer Electronics Brand retailer (‘The Brand’) noticed the numbers weren’t adding up across its large-scale distribution network – but couldn’t see why. The amount of product’ being sold by Unauthorized Resellers seemed to have greatly increased without any major changes in their Authorized Partner network.
Thanks to Ordian MI, The Brand was able to identify several 3P sellers selling 15-20% below MAP, causing significant disruption in the marketplace.
To compound the issue, Amazon algorithms were dropping below MAP to compete with the Unauthorized Sellers. This in turn led to legitimate Sellers also breaching MAP to compete with Amazon. The net result was a lot of unhappy customers at all points of the supply chain.
Ordian MI was used to identify and grade the major problem Resellers. It then conducted weekly, at-scale, Mystery Test Buying and serial tracking from all major sellers, including Authorized Partners.
The Ordian MI team was then able to identify, via packaging comparisons, that units with old serial numbers were appearing in newer packaging that did not match the manufacturing date (the units were produced prior to the packaging update).
Conclusion – the units were being repackaged as new and were most likely used or refurbished.
Ordian MI was also able to attribute the sales and inventory, identifying which path these units take in the recycling process. It built out a highly accurate network map of The Brand’s supply chain to identify and quantify the problem.
This led to an in-depth investigation into the secondary market for The Brand’s products across wholesale, offers, quantities, prices etc. Bi-weekly meetings were held with key roles within The Brand to discuss the finding and agree the next steps and actions to take.
In a relatively short space of time Ordian MI identified multiple professional Unauthorized Resellers who were reselling these used/refurbished units.
Further investigation into the secondary market identified a bulk recycler who had sold over half a million units back into the market that were supposed to have been destroyed. These units were being professionally repackaged and resold as new – at scale fraud. The Brand won back a multi-million-dollar revenue and margin opportunity after the recycler was terminated and an in-house refurbishment process was put in place with Protempo.
Ordian MI also identified characteristics of triangulation fraud allowing for quicker and easier detection moving forward. And, in addition, the at-scale Mystery Test Buys provided evidence for successful brand register claims against the Unauthorized Resellers. This led to the delisting of significant sellers for ‘wrong product’ and ‘used sold as new’ complaints. The Brand continues to reap the rewards of winning its ‘Brand’ back.