Prestige Beauty brands in the E.U. often hesitate to sell products on Amazon, wary that the combination of third-party distributors and high discounts will hurt their image. Fewer than half of Index brands officially distribute on the platform, and most of those fall into the mass price point category. However, as in the U.S., the holdouts are making a mistake. L2’s Insight Report: Beauty E.U. Amazon finds that working with the e-tailer benefits brands by giving them more control over distribution, as well as heightened search visibility and product availability.
Looking at the Beauty brands that appear most frequently on first-page search results in the U.K., France, and Germany, a pattern emerges: they all sell directly on Amazon. This also holds true for all but three of the brands dominating the top spot in those results. Those include Rimmel London, which demonstrates the highest category visibility in the U.K., and L’Oréal Paris, the visibility leader in France and Germany.
Products sold officially are also generally more available, encouraging purchase. More than 95% of official listings are “in stock” for immediate fulfillment, according to the L2 study. In comparison, only 30% of listings not fulfilled by Amazon are labeled as “in stock” and 14% bear delayed delivery warnings.
And while brands might fear the gray market, working with Amazon is the best way to assuage that fear. As in the U.S., the retailer seems to lower third-party listings for brands that work with them. Prestige brands that officially distribute on Amazon have 31% fewer third-party SKUs in Germany and 23% fewer in the U.K., according to the study. In other words, brands should not be afraid of working with Amazon – they should be afraid of not doing so.