Amazon Inside Out: HQ2, Teens, Taxes, Bogus IP Claims and Australia

Chris McCabe casts a critical eye over Amazon stories that have been making headlines, from HQ2 to the much anticipated launch in Australia

This post is by Chris McCabe, a former Amazonian and founder of ecommerceChris.com. ecommerceChris shows Amazon sellers how to keep their accounts healthy, or, if the worst should happen, how to get their account back from a suspension.

Amazon has whipped officials across America into a frenzy as it invited invitations from cities wishing to be the home of Amazon’s new second HQ. How much will local officials hurt themselves to make long-shot bids?

The MTC has extended the deadline of their sales tax amnesty until November 1st, and the number of sellers being suspended for making bogus IP complaints is on the rise. What do both of these developments mean for sellers?

Meanwhile, over in Australia, the anticipation for Amazon’s new marketplace is building, as more than 500 Australian businesses have now signed up to sell on the marketplace when it launches next year.

And, will we be seeing an increase of teenagers shopping on Amazon, as they launch their new Amazon Teens service?

Surprised Man
Want to grow your Amazon business?
Automate pricing, request feedback and reviews, improve your marketing & SEO and a lot more. Amazon consultants help with difficult issues like suspension, or help grow your business. All in the Web Retailer directory.
View Amazon Selling Tools Now

Outside Looking In: The Big Amazon Stories

Pick Me Pick Me! The Masochistic Obsession With “HQ2”

Bloomberg: Amazon Second HQ Bid Ignites ‘Sadistic’ Frenzy Across North America

Amazon is inviting proposal from cities who want to be the home of their second U.S. headquarters. It has sent officials across the country into a frenzy as they vye to receive the investment and job opportunities that Amazon’s new HQ would bring.

Every city wants the biggest piece of this new pie. Pick me, pick me! They all scream. Is it going to be Boston or will it be New York City, since Amazon already has huge presences in both? Will it be somewhere like Memphis, will it be Minnesota, or will the speculation ever cease?

Yes, it will, but only when Amazon decides where to go and makes their selection. Until that day, we will keep hearing about the various creative efforts by cities to get noticed by Amazon and only this week did stories appear about the downside of having Amazon come to town.

Every city wants the biggest piece of this new pie. Pick me, pick me! They all scream.

We need to write an open letter to Amazon, asking them to choose sooner rather than later. Please spare us month after month of guessing and reading stories about, according to Bloomberg, any more of the masochistic efforts that individual cities have put themselves through. The articles repeatedly ask “who will win this amazing lottery?”, so now we simply need an answer.

By my reckoning, the decision will not be based on the comfort level of Amazon employees or their concerns over cost of living in this or that city.

I have a rooting interest here. I don’t want to see Amazon increase their Boston presence more than what they already have in the area. I’m from the Boston area, and I live in the Boston area, and I remember well what Amazon’s influence did in the Seattle area. I don’t want to see the same tech-related gentrification which includes omnipresent, large construction pits, and high-priced, unattractive, cookie-cutter condos, and mom and pop shops replaced with generic looking storefronts with logos designed by marketing experts. Also, traffic…you think it’s bad now? Just you wait. You get the idea.

Naturally, a permanent visit from Amazon delivers jobs, and local service industry businesses thrive. We know there will be a positive economic impact for developers, construction companies, food service providers, entertainment companies, and so forth.

But what else is Amazon promising to deliver and what specific answers do they have for concerns from those calling for an increase in corporate transparency and responsibility? Amazon is known for its opaqueness, not its transparency. Their interest in social responsibility matters largely remains to be seen.

Teenage Wasteland?

TechCrunch: Amazon introduces a way for teens to independently shop its site, following parents’ approval

Amazon has announced a new way for teenagers to buy products on the site. The new service, aimed at 13-17 year olds, allows teens to browse the site independently and place their own orders. Parents can then choose to review the order before their children are allowed to complete the purchase.

Amazon like any major retailer, and marketplace, would love to integrate young adults into their ecosystem as early as possible for obvious reasons. Customers start identifying their brand preferences at young ages, and advertising tailored to kids, and their tastes, goes back to the early days of television. In fact, I’m surprised we did not see this move sooner.

Yesterday’s debt-ridden teenagers are today’s Amazon adult buyers.

The answer to that may lie in the long history of debt piled up by teenagers running amok with their first credit card. The pre-Amazon logic ran that teens didn’t have enough experience to control their spending and think ahead to how or when they’d pay it back, right? Their parents were the ones who had seen the pain of late payment penalties on bills, or high interest rates, paying back the likes of Visa, Mastercard and American Express.

At this point, yesterday’s debt-ridden teenagers are today’s Amazon adult buyers that still make impulse buys. The difference now is that they expect Amazon to cover them if they change their minds. A refund policy that makes it easier for buyers to return products was set into motion weeks ago, plus the average person’s expectation that Amazon will refund for a “viable reason”, tends to lessen a customer’s motivation to think ahead.

So there’s no point burning up lots of energy deciding if teens are less able to control spending than the typical Amazon buyer. Besides, why keep teens away from Amazon, a site they’ll eventually embrace anyway, if you can allow parents to make the final call for their decisions? Amazon cannot be blamed for their son or daughter’s spending if Amazon gives them veto power, which represents an incredibly savvy move in my view.

What Amazon needs to do next is to think about how teens communicate with each other and connect that with how they shop. Snapchat appears to be in a bit of trouble, why not look there or develop an in-house version? People entering adulthood now will be more interested in showing friends what they want to buy, and get pre-purchase opinions, via instant messaging.

Will Amazon create a shopping-style instant messaging service on Amazon.com? I would, if I were them. Facebook has already begun capitalizing on the synergy between social media and shopping.

Isn’t a data company like Amazon willing to invest in a method of communication between buyers beyond posting product reviews? I’d recommend that they look into that. It worked out pretty well in China, if you look at how people there share information with each other when they buy things. Success in the largest shopping population on Earth should provide incentive for any shopping app developers.

The Inside View: What’s Impacting Sellers?

Sales Tax Saga Update – Deadline Gets Extended

MTC: Online Marketplace Seller Voluntary Disclosure Initiative Deadline Extended

Following an emergency meeting, the Multistate Tax Commision have extended the deadline for their controversial sales tax amnesty to November 1st.

It’s good to see a “Dear Jeff” letter about something other than an escalation to Executive Seller Relations of an ignored account appeal. Everyone knows that in the end, Jeff will decide much of this based on the numbers, the input from senior executives, and hopefully, some limited input from employees. Otherwise, it’ll end up mainly involving costs and tax breaks and whatever tax incentives states offer.

In relation to the sales tax amnesty program I cited in my last column, will any state that bargains for Amazon’s attention listen to efforts by Amazon FBA sellers to dispute their obligation to collect sales tax in that particular state? Will Amazon’s tax-related interests in Massachusetts receive immediate approval if they’re willing to grace us with their presence? Unlikely.

The tax amnesty itself is far from a foregone conclusion, as indicated in the recent extension of the MTC deadline.

The tax amnesty itself is far from, well, a foregone conclusion, as indicated in the recent extension of the MTC deadline. I’ve covered the sales tax amnesty offered by states to sellers in the past. Now it’s crunch time, as many in the field prepare to counter these efforts and gather together sellers in a unified voice on this issue after the deadline comes and goes.

Amazon is also stepping up their lobbying efforts and they’ll be heavily invested in any effort to push sales tax collection responsibilities for marketplace sales onto their shoulders. Is there any point in continuing to resist the states’ efforts to force individual sellers to collect sales tax in up to 25 states? Yes, of course there is. Just because Amazon spends as much as Exxon on lobbyists, doesn’t mean they’ll win every legislative fight on the Hill, or every legal battle in the courts. It just means they may now be more likely to win most of them. Keep an eye on those guys!

Sellers Playing With Fire With Careless Infringement Claims

In recent days, I’ve seen an uptick in sellers contacting me about suspensions caused by their submission of “inaccurate and invalid” rights infringement claims against other sellers.

If a non-seller submits a false or misleading Notice claim of infringement to Amazon and there are no seller accounts associated with that party, all Amazon can do is reverse their original warning and reinstate the listing for the affected seller. If, on the other hand, sellers are trying to eliminate their competition by submitting unsubstantiated notice forms against them, the story changes remarkably.

Ever since Amazon tasked abuse teams earlier in 2017 with tracking down policy-breakers who submit Notice forms, many have found themselves targets of investigation, and received suspension notifications like this:

Hello,

Your account has been closed due to violations of our Seller Policies and Seller Code of Conduct. We have reason to believe that you have violated our policies by submitting inaccurate and invalid notices of infringement against other Sellers, which violates our Code of Conduct policies for Sellers. Please note that you are responsible for any notices submitted on your behalf by any companies or third parties you have authorized to do so.

We have provided our Seller Code of Conduct below for reference.

The consequences of submitting false infringement forms are both legal and financial, especially where Amazon policy teams are concerned. These teams have moved in the direction of aggressive enforcement over the course of this year, and if they see proof that you’re alleging right’s ownership that you can’t backup with documentation, your account will pay the price for it.

Naturally, I had to ask: why would sellers do this, if they’re not completely trying to game a process, or take advantage of heavily backlogged email queues and overworked account investigators? Why would you submit such a claim, if you had no legal basis for it? A lot of sellers who are active in the community know that Abuse teams work to identify people doing this, and put an end to their worlds as quickly as possible.

Of course, black hat actors deliberately break the rules. But many sellers who have found themselves suspended for this are unaware that to Amazon, they look like abusers. I discovered that many well-intentioned sellers are reluctant to retain attorneys to find out what their rights are, and they pursue these efforts on their own, based on their own (incomplete) understanding of the law.

I honestly think you should sit down calmly, take a stress pill, and think things over.

In one particular case, a suspended seller who reached out to me had created their own brand based on a generic product, with its own packaging and branding, and believed that they could report the other sellers on that particular listing for infringement. They couldn’t, and until we had managed to explain why, they thought that Amazon had made a mistake.

So, to quote HAL from 2001, “I honestly think you should sit down calmly, take a stress pill, and think things over.” Anything that resembles quick action and a lack of thoughtful review by a seasoned expert could result in more damage than you ever expected. I’m not an attorney, nor a legal expert by any stretch, but I think you’re risking legal action and payment of possible damages from other parties if you misunderstand this.

Where Was I? Oh Yes, Australia!

Australian Financial Review: Amazon Marketplace sellers surge in lead up to first seller summit

More than 500 Australian businesses have now signed up to sell on the Amazon Marketplace when it launches in Australia next year. This news comes ahead of Amazon’s first ever Australian seller summit on November 13th.

I already count sellers from Australia and New Zealand among my clients, because plenty of them are selling in the U.S., and UK. Amazon is always on new drives to get sellers in one marketplace to go global and sell in another, and Australia is no exception. Wherever you are, you’ll soon receive messages asking you to sell to Australians.

We’ve all seen what happens when retailers try to compete with Amazon on price.

If you’re in Australia and want to speak to the people running this, stay tuned to this space. I will have more on this subject as we get deeper into what one of my Aussie clients dubs “Amazon Oz”.

So, what will the impact be of Amazon launching in Australia?

In terms of identifying the benefits of global sellers entering the new marketplace in Australia next year, the sky’s the limit. I spoke with my colleague, and Australian ecommerce expert, Leah McHugh, about the increase in publicity around the Australia launch.

I saw an article suggesting Amazon in Oz would decrease existing retailers sales by 2%. I think this is an incredibly conservative number! The major Australian retailers have never really had to deal with competition. For the most part they’re only just starting to build a decent online presence, and Australian consumers are already purchasing from Amazon.com. It’s a big country, and with that comes certain logistical issues, similar to Canada.

We’re also seeing some retailers promising to match Amazon’s prices and we’ve all seen what happens when retailers try to compete with Amazon on price. Particularly in a country with high taxes that Amazon won’t necessarily be paying.

This means that nobody has even begun to scratch the surface in terms of ecommerce customers in Australia, and it helps explain some of the feverish excitement that’s building. There are 25 million people in Australia and I’d say that’s a decent base for building a new brand “down under”, would anyone disagree?

Australia’s retail history has been primarily brick-and-mortar, with only occasional discussion of Amazon, but that appears to be coming to an abrupt end. In my past visits there, I talked to eBay sellers who had only conducted limited business on Amazon in the past. That’s about to change too.

What’s new and impacting your business as a marketplace seller? Drop an email to thisimpactsme@webretailer.com and I’ll look into it for you.

Chris McCabe can be contacted via ecommerceChris.com.

Surprised Man
Want to grow your Amazon business?
Automate pricing, request feedback and reviews, improve your marketing & SEO and a lot more. Amazon consultants help with difficult issues like suspension, or help grow your business. All in the Web Retailer directory.
View Amazon Selling Tools Now

3 comments on “Amazon Inside Out: HQ2, Teens, Taxes, Bogus IP Claims and Australia

  1. Hi Chris,

    am I right in saying that what you mean here is that a private label seller can’t report an infringement where the same generic product has been added to the marketplace under a ‘new’ brand? Though a hijacking of a seller’s own brand (IP) “is” still reportable.

    “a suspended seller who reached out to me had created their own brand based on a generic product, with its own packaging and branding, and believed that they could report the other sellers on that particular listing for infringement.”

  2. I don’t think you have to worry about HQ2 setting up shop in Boston. And I’d bet good money that it won’t be NYC. I’m betting on the Carolinas. Maybe Denver.

    1. Well my top three bets will appear in the next column, and I’ll go through why I think each of them are likely finalists. Boston and NY, teaser alert, are not on my list of finalists. So I disagree with a few about that, but wishful thinking may be behind some of the obsession with Amazon. I think HQ2 needs to go beyond pure numbers and civic pride and people need to think about what a permanent presence of Amazon in your backyard really means. It’s not only about business development, or congestion on the roads or subways, or cost of living going up.

      It also means a permanent involvement by Amazon in local politics and most likely, long-term influence. Jeff isn’t in it simply to compete against Wal-Mart, or Alibaba, or any other company. He’s moving industry to industry for a reason, and buying the Washington Post was not an accident. He wants to get into the political game and protect Amazon’s interests across the board, going forward.

Leave a Reply

Your email address will not be published. Required fields are marked *