You are a seller product manager at Amazon (assume that it's a pure marketplace). You have to activate churned sellers (i.e., sellers who have stopped using seller producte e.g., catalogues, inventory, etc). How would you go about it? (Note: You have budget constraints to consider.)

Question

You are a seller product manager at Amazon (assume that it's a pure marketplace). You have to activate churned sellers (i.e., sellers who have stopped using seller producte e.g., catalogues, inventory, etc). How would you go about it? (Note: You have budget constraints to consider.)

Asked at Vedantu over a year ago

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Clarify the question

The first thing we might have to understand is the reason of the churn -

Churn rate vs time - Has the churn rate steady over last 2-3 years? (or) was there any technology/product change that could have caused sudden dip in the number of active sellers?
Landscape - Do we have entry of new competitors (or) any change of strategy from any of existing competitors.
Products/sellers – What kind of sellers have stopped using the platform? Were they selling products?
Buyers - Do we have any changes in the demand part of the marketplace? Since it is Amazon I am assuming the demand is not a problem at the current time.

What is the problem we are solving?

To summarize, we are trying to re-activate the sellers who have stopped using Amazon marketplace due to various reasons.

How can we solve the problem?

Give promotion to sellers if they are selling on competitors platform. The promotions can be free listings to sell their products on Amazon. (low budget, medium effort)
Provide reduction in the closing cost of the items. (low budget, medium effort)
Provide reduction in the closing cost of the items if the sellers meet some metrics in terms of product quality, shipping on time & providing returns. (high budget, XL effort)
Amazon is known for anti-competitive practices. They brand and sell products which are high demand. Experimentation can be done provide more visibility for products from Marketplace sellers. It is important to monitor the revenue/profit of these products. Important thing is to find the right balance without impacting the bottom line. (med budget, M effort)

Implement

We could identify the sellers who left the marketplace platform. Furthermore, instead of reaching out to all the sellers who left amazon platform. We could segment the sellers by the customer lifetime value (revenue they generated - loses). We can target the outreach to the top sellers who have left the platform and the sellers who are selling unique products.

Considering the budget - perhaps easiest would be 1 (possibly using marketing platform - build vs buy decision) & 2

Validate

Number of users to whom the promotion was sent
Number of users who saw the promotion (opened the email)
Number of users who clicked the promotion
Number of users who restarted selling on the platform

KN · Answer 2 · 2020-05-05T01:45:10+0000

So, the objective is to reactivate churned sellers on Amazon marketplace.

First, i will understand how much is the Churn and what has been the trend? Any sharp and major decrease might mean strong measures which will be a combination of product changes, marketing actions and sales drives.

After having determined the amount of churn, i will go for understanding the Why behind it

I will do a survey and reachout to sellers to understand what made them go away from the marketplace?

Possible reasons could be:

Problems in cataloguing
Problems in Inventory Management
Problems in Invoicing
Lesser/problems with integrations like PGs, courier services, transporters etc.
Commission Concerns
Poaching by competition

I will also read the customer support logs of the stopped sellers to see what their pain points were before stopping business.

Having arrived at the reasons, i will go about solving them in my Roadmap based on impact and effort. I can use the RICE method for Roadmap prioritisation.

As a quick fix, i will experiment with extra discounts on select fast moving products to woo back the sellers. I will do price- revenue testing to see maximum re participation from the sellers at the same time not hurting revenues of Amazon too much.

To evalue the success of my measures, i will calculte how many sellers i was able to re activate and what was their GMV and Revenue.

However, i will also closely watch out for any overall decrease in GMV/Revenue from existing sellers as a result of my experimentation.

The idea is that overall GMV and Revenue must increase.

Swati · Answer 3 · 2020-05-04T14:13:56+0000

I would begin by asking some clarifying questions:

       1. Are we looking at churn in some particular/ top categories?
       2. Are we focused on a timeframe- Last 1 yr. vs 3 months?
       3. Any recent policy changes by Amazon that could have directly affected sellers?

Assuming we are looking at all categories for last 1 year and no recent policy upheaval.

What sellers should we target?

I would focus on the top 20% sellers by revenue pre churn and gather the following metrics:

1. Avg monthly Revenue per seller from 6 months before churn

2. # Unique SKU’s sold per seller

3. Avg rating from 6 months before churn

4. # Sellers in the category

5. Seller margin in the category

6. Seller lifetime value

Apart from these it’s worthwhile checking some other questions:

1. Are the sellers from same geographical cluster?

2. Any macroeconomic factors that could affect the category?

3. Any complaints/ feedbacks received for the sellers?

What could be the potential problems?

Plausible issues:

1. Engaged by rival platforms

2. Lowering sales on Amazon due to competition with other sellers

3. Bad experience (Technical, customer ratings, relationship mgmt.)

4. Also, could be internal credit issues with the seller

How do we solve the problem?

Once we have figured out a list of sellers we want to activate, following actions can be pursued:

1. Renegotiate seller discounts

2. Offer promotions like free listing for some time, volume discounts based on metrics like lines sold, ratings, fulfillment time

3. Improved relationship management, frequent touchpoints

4. Offer in house training tools if required in listing, shipping, promotions etc.

How do we validate the returns?

Post implementation, campaign success can be measured through:

1. % Sellers engaging with the promotions

2. # Sellers activated per month

3. Avg. revenue per month per activated seller