Case Study
Blake - Strategic Adaptation in a Shrinking Market
About the Brand
Blake is a UK-based company specializing in the manufacture of envelopes. They have expanded their market reach by selling across Amazon Europe, operating as a vendor on the Amazon platform. Blake is known for its commitment to quality and innovation in the envelope manufacturing industry.
Challenges
Market Contraction: The envelopes market was shrinking by 10% year over year, with a 20% decrease in search volumes.
Amazon’s Profitability Push: Amazon began blocking listings unprofitable for them and requested additional funding from vendors.
Narrow Profit Margins: Blake was operating on very sharp margins, where only high-volume sales were generating profits.
Internal Pricing Issues: Inflated numbers in the Lost Buy Box (LBB) rate led to a substantial drop in weekly PCOGS numbers, affecting monthly sales targets. Internal price matching contributed to increased LBB rates.
Strategy
Cost Efficiency and Market Expansion: Blake focused on reducing costs to invest in advertising and new product selections while negotiating favorable vendor terms with Amazon to support market expansion and profitability.
Brand Control and Market Presence: They emphasized maintaining full brand control, ensuring they never lose the buy box on Amazon to maintain a strong market presence.
Diversifying Customer Base and Product Range: Blake increased their focus on the B2B segment to garner more repeat purchases and expanded their product selection to include sustainable packaging, addressing emerging market trends and diversifying their offerings.
Execution
Negotiating Profitable Terms: Reducing dependence on automated marketing and shifting towards Super PICs and straight payments to improve profitability.
Regaining the Buy Box: Implementing Amazon’s Transparency program and automating counterfeit violation report cases to regain buy box offers for top LBB offending products.
New Product Launches: Introducing new selections with a solid advertising launch roadmap, ensuring each new product received the necessary market attention and support.
