Over-the-counter (OTC) brands face a tough distribution challenge on Amazon. While all the OTC brands in L2’s Amazon Performance report officially distribute on the platform, they often end up competing with third-party merchants that sell the same products.
During the study period, L2 researchers conducted multiple OTC-related keyword searches. A third of results featuring Index brand products came from listings by third-party vendors, rather than the brands themselves.
Some brands exhibit tighter control over third-party distribution of their products than others. For example, the study finds that 97% of Theraflu products are shipped and sold by Amazon, while over three-quarters of Nexium 24HR listings are sold by third-party merchants including Pharmapacks and Quality Plus OTC.
Official third-party sellers can help brands market their products. However, as the gray market grows, there’s an increased risk that counterfeit, unauthorized, or expired goods will put brand equity at risk. This is bad for brands because it means they’ve lost control of pricing and the customer experience around their merchandise. By cracking down on unauthorized listings and ramping up investments in search visibility, brands can regain control over distribution.