Mystery Buy in Online Stores: Goals and Objectives

In modern e-commerce, it’s important to control not only prices but also product supply channels, their authenticity, and compliance with the brand’s internal commercial policies. This is where the process known as “test purchasing in an online store” comes in handy. This article explains why and how to conduct such a check, especially for manufacturers, brands, and distributors seeking to maintain control over the online sales process of their products.

Price Control is ready to explain this topic from a practical perspective. Our goal is to help readers understand the mechanics, advantages, and hidden risks of this tool.

What is a Mystery Buy in an Online Store?

A Mystery buy  or Mystery Shopping in an online store is the process of making an actual or fictitious purchase to investigate and document the channel through which a product enters the online store and the actual price at which it is sold. The mystery buy service is one of the most effective tools for combating price dumping and trademark rights violations.

Mystery buys is a method of financial control involving a simulated sales transaction to verify compliance with trade regulations. Indeed, test purchases are typically conducted to ensure legal compliance and evaluate the quality of goods.

In our context, a mystery buy is often necessary for individuals or companies aiming to uncover how a particular product appears on an online store’s website and at what price it is being sold. This type of mystery buy e can become an effective tool for manufacturers and importers who need to monitor online pricing compliance.

Mystery Shopping in Online Stores and Its Objectives

A Mystery Buy can serve several purposes:

1. Monitoring prices and combating price dumping.
2. Identifying counterfeit and contraband products.
3. Verifying the accuracy of competitor analysis.

Ensuring consumer rights through online store audits

Mystery Buy in Online Stores for Combating Price Dumping

Objectives of Such Purchases

1. Expose Unfair Suppliers
   A Mystery Buy can reveal which partners are violating MAP (Minimum Advertised Price) policies. Penalties, such as significant fines for suppliers listed as “violators,” can serve as a warning to other partners. Halting product shipments to non-compliant online stores forces them into two choices: either sell at the recommended retail price or remove the product from their website entirely. Post-purchase price monitoring demonstrates the effectiveness of such actions.

2. Identify Redirect Stores
Some online stores include a manufacturer’s products in their catalog with no intention of selling them. Instead, they list these items at dumped prices to attract potential buyers, only to redirect them to products from other brands.
These stores, known as “redirect stores”, can be detected even through a standard order. Typically, they advertise on price aggregators and set low prices to increase site traffic.

3. Determine Availability and Real Selling Price
Manufacturers who routinely monitor online stores and enforce strict measures against MAP violators often encounter deceptive tactics:

4. “Out of Stock” Strategy: Stores label a product as unavailable to claim that a low price isn’t considered dumping since the product can’t be purchased. However, Mystery Buys frequently reveal that the product can still be bought despite its “out of stock” status. For instance, monitoring on the Ukrainian marketplace Rozetka showed that even though the product appeared unavailable, it was still possible to purchase it.

5. Hidden Discounts: Stores might offer a hidden discount during the ordering process while reporting to suppliers that the customer paid the full price upfront.

These deceptive practices emphasize the importance of regular Mystery Buys to uncover and counteract such strategies effectively.

Mystery Buy on Marketplaces to Confirm the Sale of Counterfeit Goods

The most convenient way to sell contraband or counterfeit products is through marketplaces, social networks, and classified ad websites. Large businesses often exploit small entrepreneurs to import and sell massive volumes of goods worth millions of euros in Ukraine, bypassing taxes and customs duties.

If an online store is selling products under your trademark that you did not import and you are unaware of their origin, there is a high likelihood that the goods were brought into the country illegally. Additionally, there is a risk that the store might be selling counterfeit goods under your brand, providing consumers with low-quality imitations.

How to Detect Counterfeit Goods Online

Identifying sellers of contraband or counterfeit goods online can be done efficiently by utilizing monitoring services such as Price Control. The likelihood of purchasing counterfeit or contraband products significantly increases when shopping on platforms like Prom.ua or classified sites such as OLX.

The problem of counterfeit goods in e-commerce grows more severe each year, particularly in regions with highly developed online markets, such as the United States, India, and China. Experts estimate that the counterfeit market grows by 30-40% annually. China remains the world’s largest supplier of counterfeit products, followed by India, Turkey, and others. Industries most affected include apparel and footwear, with more than 27% of footwear worldwide being counterfeit. Popular brands like Nike, Puma, and Adidas are frequently sold online at half the original price.

Challenges of Tracking Sellers on Marketplaces and Social Media

Online platforms often obscure the identity of sellers. For example, on the Ukrainian marketplace Rozetka, it is impossible to determine the actual name of an online store since merchants operate under fictitious names. Many sellers on domestic marketplaces lack Ukrainian citizenship, and their goods are often stored abroad.

Recently, counterfeit sellers have shifted to social media. Platforms like Instagram, Facebook, and even Telegram (despite not being a traditional social network) have become hotbeds for counterfeit sales due to their group and channel functionality.

While the operating formats of social media, classified ad platforms, and marketplaces differ, they share one common feature: enabling sellers to post ads and sell goods at low prices. In Ukraine, the most popular platforms among counterfeit sellers include Rozetka, Prom.ua, OLX, Bigl.ua, and Shafa.ua

The Solution: Mystery Buy

If you discover products under your trademark being sold online without your authorization, the best course of action is to conduct a Mystery Buy. Purchase the product, examine it thoroughly, and analyze the accompanying documents. Ensure the documents include the online store’s name, not just the sole proprietor (FOP) who shipped the goods.

Once you gather evidence of illegal imports or counterfeit product sales, you can file a complaint with law enforcement and regulatory authorities. Intellectual property rights protection for trademarks is guaranteed by state legislation.

In all of the above scenarios, and many others, the only way to trace the supply chain of goods to an online store is through a Mystery Buy.

Mystery Shopping on a Competitor’s Website for Price Analysis

A Mystery shopping in online stores can be a valuable tool not only for manufacturers or government agencies. Online retailers themselves can use this method to analyze the activities of their competitors.

The primary marketing tool for market analysis is price monitoring among competitors. However, there are situations where price monitoring alone is insufficient. For instance, if the target website is aware of price scraping activities and has implemented protective measures, the collected data may be inaccurate. The site might display false prices to bots that differ from the actual prices at which identical products are sold.

In such cases, a phone-based fake order can reveal the product’s availability, actual price, and the range of post-sale services offered. If the goal is to trace the product’s supply channel, it’s worth placing an order for delivery through a postal service. Upon receiving the product, closely analyze the item and its accompanying documents. This approach allows for a more comprehensive evaluation of the competitor’s pricing and marketing strategy.

Mystery Buy in Online Stores to Protect Consumer Rights

A Mystery Buy in online stores can also be conducted to address consumer complaints about poor product quality, subpar service, or missing accompanying documentation. Such investigations can be initiated by consumer protection agencies.

In addition to authorized regulatory bodies, non-governmental organizations often use mystery shopping to assess and address these issues. This practice not only ensures that businesses comply with legal standards but also improves consumer trust and satisfaction by holding retailers accountable.

Types of Mystery Shopping in E-commerce and Their Applications

freepik.com

The types of Mystery Buys vary depending on the objectives you aim to achieve. Here are the main options:

1. Ordering a product over the phone with a subsequent cancellation.
2. Placing an order for delivery to a pick-up point to photograph the product and accompanying documents, followed by rejecting the parcel.
3. Purchasing a product outright for expert evaluation of the product and its accompanying documents.

Below is a detailed overview of each type and its use cases.

1. Phone Order with Cancellation

This is the simplest method: attempt to order the desired product either through the website or over the phone, then cancel the purchase.

• Advantages:
  • Low cost and simplicity.
  • Helps identify redirect stores, delivery timelines, and the real sale price.
  • Requesting an invoice may reveal the legal entities behind the online store’s sales.
• Disadvantages:
  • Often fails to uncover the source of supply for the online store.

2. Pick-up Point Order with Rejection

In this approach, you order the product for delivery to a pick-up location, where you inspect and photograph the product and accompanying documents, then reject the parcel.

• Advantages:
  • Visual inspection of the product and documents can reveal critical details, such as serial numbers, warranty certificates, and product passports, which can trace the product’s actual supply chain to the online store.
• Disadvantages:
  • Higher costs due to:
    • The time and transportation required for the buyer to visit the pick-up point.
    • Shipping costs for both delivery and return (most online stores require prepayment for delivery).

3. Full Purchase for Detailed Analysis

This method involves making a complete purchase, including paying for delivery and the product itself, to thoroughly analyze the product and its accompanying documents.

• Advantages:
  • Enables a detailed examination of the product and its documentation.
  • Essential for collecting evidence of contraband or counterfeit goods.
• Disadvantages:
  • The most expensive option, as the product must be purchased outright.
  • The cost of the product can reach hundreds of thousands of hryvnias in some cases.

Choosing the Right Method

Each type of Mystery Buy serves a specific purpose, and the choice depends on the task at hand:

• Use the phone order with cancellation for quick, low-cost market research.
• Opt for the pick-up point order to gather supply chain details from accompanying documents.
• Choose the full purchase when you need in-depth product analysis or to document contraband or counterfeit activity.

While the complexity and cost increase with each method, so does the level of detail and evidence obtained, making them valuable tools for various investigative and competitive purposes.

 Order consultation with our specialist!

I would like to order a consultation with an expert

How to Conduct a Mystery Buy Online the Right Way

Despite the potential of Mystery Buys, not all manufacturers and suppliers are able to implement them effectively.

Out of the methods described earlier, only the first (phone order with cancellation) does not require additional prerequisites. The effectiveness of the other methods depends largely on whether the company monitors the volume and distribution of its products.

If a company maintains a registry of product serial numbers, employs additional markers or identifiers on packaging, warranty cards, and other product-related documents, a Mystery Buy can help trace the supply channel to the online store. Conversely, if no such systems are in place, Mystery Buys become far less effective.

Unfortunately, many companies only start considering product registration or unique markers after discovering their products being sold by unauthorized online stores with whom they have no agreements.

Preparing for a Mystery Buy

Before conducting a Mystery Buy, it is crucial to:

1. Know Your Distributors: Keep a record of which distributors receive your products, including the corresponding serial numbers.
2. Identify Supply Violations: Use this information to identify which distributor supplied goods to a non-compliant store, allowing you to impose sanctions on both the dealer and the online store.

Mystery Buys: DIY or Outsourcing?

When considering Mystery Shopping as a tool to combat price dumping or identify counterfeit goods, many companies assume the process is simple enough to handle internally. However, challenges typically arise after the second or third purchase.

Challenges of Conducting Mystery Buys Internally:

1. Exposure of Investigators:
   • Information about the purchases spreads quickly within online communities.
   • Store owners may identify phone numbers, buyer names, addresses, and even initiate threats.
   • Common responses include claims that the product is “out of stock” or “unavailable.” In worse cases, stores may accept prepayments but fail to deliver both the product and a refund.
2. Difficulty Identifying Store Owners:
   • Many online stores operate financial transactions through small individual entrepreneurs (sole proprietors), making it difficult to track the actual store owner.
   • Invoices, warranty cards, and receipts are often issued under fake names, with no mention of the online store itself.
   • Proving that the goods came from a specific online store requires significant effort and evidence.

The Solution: Outsourcing Mystery Buys

To overcome these challenges, consider outsourcing the Mystery Buy process to professionals. Companies like Price Control specialize in this service and bring years of experience in addressing the unique problems associated with Mystery Buys.

Advantages of Professional Mystery Buys:

1. Expertise:
   • Professionals know the tactics used by online stores to conceal supply chains and have strategies to counteract them.
2. Anonymity:
   • Experienced teams operate without raising suspicion, ensuring accurate results.
3. Efficiency:
   • Established procedures and resources make the process faster and more cost-effective.
4. Reliable Documentation:
   • Professionals collect comprehensive evidence, including product analysis and documentation, that can stand up in legal or regulatory investigations.

When performed correctly, Mystery Buys are an invaluable tool for combating unauthorized sales, price violations, and counterfeit products in the online retail landscape. By outsourcing this process, companies can ensure a more effective and seamless approach to protecting their brand integrity.