The Web Retailer News Digest for April 16th, 2021
Photo credit: Jeff Bezos at the Amazon Spheres Grand Opening in Seattle, by Seattle City Council
It’s that time of year again – Spring has sprung, the Easter Bunny has hopped on by, and Amazon’s Jeff Bezos has dropped his annual Letter to Shareholders.
The 2020 missive is significant for several reasons. The letter is Bezos’ first – and presumably his last – since the announcement that he is stepping down as CEO. Effective the third quarter of 2021, Bezos will become “Executive Chair” of the world’s largest marketplace, and hand the keys to the store over to new CEO Andy Jassy.
For Amazon sellers, there’s interesting information in the many statistics shared by Bezos in his letter. Nearly 60% of all Amazon sales in 2020 were made by third-party sellers – the largest proportion to date. This serves as proof to what observant sellers have known all along – the marketplace continues to grow faster than Amazon as a whole.
But then Bezos went even further, and estimated that marketplace sellers made total profits of $25+ billion for 2020, which is more than Amazon’s own net income for the year. Clearly, it’s a fine time to be an Amazon seller. It must be, because Jeff Bezos has decreed it to be true.
A final sermon from Pastor Jeff
Unlike other shareholder letters, this one really has the theme “But wait, there’s more…” written between the lines. Bezos shares some frankly mind-boggling stats about Amazon’s growth over the last year. At no point does he acknowledge the fact that the world was sitting at home locked down and afraid to go to stores during a pandemic, which no doubt resulted in the massive growth spike for all things Amazon.
First the good stuff. Amazon has grown from 614 employees at the time of its 1997 Letter to Shareholders, to hiring 500,000 employees in 2020 alone. There are now 1.3 million people working for Amazon. Let that sink in a moment. It’s roughly the same as the combined populations of Alaska and Vermont. And with the recent trend of Amazon buying disused shopping malls to turn into giant new fulfillment centers, this will only increase further.
Then there’s the, well, odd stuff. Bezos goes on a bit of a rant discussing how much value Amazon has created for everyone – shoppers, employees, Prime subscribers, sellers, shareholders. It gets a bit patronizing when he includes a letter from a couple who thank him for changing their life with two shares they bought back in the day.
Then, it turns into a digression on his philosophy of life – how “you have to pay a price for your distinctiveness, and it’s worth it.” There’s also a lengthy bit about the new plan to make Amazon “Earth’s Best and Safest Employer”, as well as a long passage on Amazon’s efforts to deal with the inevitability of climate change.
By the time the letter reaches the sign off, we’ve reached the fervor of an old-school sermon:
To all of you: be kind, be original, create more than you consume, and never, never, never let the universe smooth you into your surroundings. It remains Day 1.
Or, if you’re a fan of Mel Brooks classic comedy films, the moment in History of the World, Part 1 where Moses descends from the mountain with the 15 Commandments.
Either way, Bezos has gone out with a bang, and it will be fascinating to see where Amazon goes from here. One thing is for sure, new CEO Andy Jassy has a difficult act – and shareholder letter – to follow.
Read more at About Amazon.
Amazon removes the last morsel of customer details
Imagine, if you will, a marketplace where $300 billion dollars of products are sold to customers by third-party sellers. For all practical purposes, those customers exist only as anonymous numbers and metrics to the sellers who serve them.
This is not The Twilight Zone, it’s Amazon, where FBA sellers will no longer have access to any identifying customer details as of April 8, 2021. Says Amazon, “the Amazon Fulfilled Shipments report will no longer include Amazon Customer name and street address.”
Sellers who do their own fulfillment will still have access to this data, because otherwise they wouldn’t be able to ship their parcels, but FBA sellers won’t. It’s a blow for enterprising marketers who used the information for Facebook Ad retargeting and direct mail promotions. While customer data has become more and more limited since 2016, more than a few sellers used what was available to skirt Amazon’s ban on marketing directly to buyers.
Customer information will still be available to US FBA sellers via the Amazon-Fulfilled Shipments – Tax Remittance report. However, using the information contained within for anything other than tax purposes is strictly forbidden.
At this point, it’s difficult for entrepreneurial FBA sellers to have a true feeling of agency about their business. Amazon has made it clear that the customers are theirs, not yours. And so is all the customer information – unless, of course, you choose to sell dangerously.
Read more at Marketplace Pulse.
Prime Day might come as early as June
Along with annual shareholder letters, one of the other great Amazon rites of spring is speculating on when the next Prime Day sales event will be held.
The latest from rumor control: sources told Recode that Prime Day 2021 will be held in either mid or late June. Due to the pandemic, Prime Day was moved from its customary July position to October last year. This year, it’s “primed” to return to a summertime showcase, although earlier than previously rumored.
Speculation is that the June start is due to pressure from Wall Street on Amazon to level up its Q2 revenue numbers, which may be lagging behind last year’s totals as the pandemic starts to abate. More evidence pointing towards an early Prime Day comes from the European markets, where sellers can already submit their Lightning Deals and Prime Member Vouchers.
Whenever Prime Day 2021 occurs, it will have a tough time surpassing last year. 2021’s results were the biggest ever for small and medium businesses worldwide. Third-party sellers achieved over $3.5 billion in sales, which was a nearly 60% increase from 2020.
Since it began in 2015, Prime Day has become a major summer shopping holiday unto itself, rather like Black Friday. While there have been rumors of Amazon adding a fall event as well, that has not yet come to pass – although it is interesting to wonder if the October Prime Day last year could have been a test run. In any case, expect a Prime Day date announcement from Amazon soon, and be sure to have plenty of stock ready to offer the 200 million Prime members worldwide.
Read more at Vox.
New escrow option for luxury watches
Psst. Hey buddy, wanna buy a watch? If you answered yes, then eBay wants you to know that they are positioning themselves as the world’s best marketplace for luxury watches. According to their recent press release, more people are buying high-end watches on eBay than ever before, and they are aggressively marketing to attract more luxury watch aficionados to buy and sell on their marketplace.
Now, luxury watches priced $10,000 and up can be purchased through escrow with eBay’s partner Escrow.com. The escrow system benefits buyers and sellers by confirming identities and facilitating safe wire transfers.
While the spectre of possibly buying counterfeit goods in a person-to-person eBay transaction lingers, the platform is also offering an Authenticity Guarantee to ensure that buyers get the real deal and sellers are protected from fraudulent returns. Human authenticators inspect and certify all products on the marketplace that show the Authenticity Guarantee badge.
What’s interesting here is not so much the numbers of Tag Heuer timepieces passing through the marketplace. Rather, it seems that eBay is claiming a new identity in certified authentic, high-end niche goods such as luxury watches, trading cards, and collectible sneakers. This is fascinating when you consider eBay’s origins as an online flea market, which was then followed by a period where they attempted to out-Amazon Amazon by focusing on little but mass-manufactured products.
Now it seems they have found a new niche – as the biggest venue for collectable, vintage and used luxury items. It’s an interesting turn of events, and eBay seems to have capitalized on it by taking advantage of gaps in the global market for certain high-end items. Of course, you can still buy old car radiators or new Levi’s on eBay – but now you can do it while wearing a Rolex and with a near-mint 1952 Topps Mickey Mantle baseball card in your back pocket.
Read more at eBay Community.
52% of sellers use Promoted Listings
eBay released a report this week showing how their technology products are leading to greater success for sellers. Almost hidden within the colorful infographics and mundane stats is a nugget about eBay’s advertising system. According to their own survey, 52% of sellers now use Promoted Listings.
eBay was a bit late to the party with its advertising tool compared to Amazon. Promoted Listings launched in September 2017. Like the tin says, it allows sellers to promote their listing rank by paying a percentage of the item’s sales price, in addition to the usual fees. Ranking placement is determined by how much of the sales price the seller wishes to pay.
In the past, it seemed that eBay sellers were more resistant to paid advertising than Amazon sellers. eBay has more of a community feel, and paying to get what some see as an unfair advantage runs counter to that spirit. Selling on Amazon, in contrast, has always been a more dog-eat-dog affair, and spending to get ahead is just part of the scene. But with slightly more than half of eBay sellers now using paid advertising, the tide seems to have turned.
The question is, what about the sellers that aren’t using Promoted Listings? Has it become necessary to pay extra to make decent sales in the marketplace? Or is this only for certain products, such as mass produced goods and luxury items? eBay is a wildly diverse marketplace, so it’s not out of the question that sellers who have more direct competition now need to advertise to stay afloat. The guy selling old car radiators? Not so much.
Read more at eBay Inc.
Other ecommerce news
Selling to Europe? New rules are coming.
There are big changes coming this summer for ecommerce sellers in the US, UK and all other countries outside the European Union (EU). A 2020 survey of products being sold in the EU found many dangerous and unsafe goods of foreign origin, with no known local business to take responsibility for them. Following that survey, the EU has taken action that will affect any non-EU merchants selling within the region.
The upshot: Beginning July 16, 2021, foreign sellers (from the US or other non-EU countries) will require an “economic operator” based in the EU. Per a memo provided by eBay:
Economic operators are responsible for working with authorities by providing technical information or taking certain action for the products. An economic operator can be a manufacturer, importer, authorized representative or a fulfillment service provider.
The name and contact information of the economic operator must appear on the product or packaging.
In particular, these regulations will impact products carrying the CE symbol – a manufacturer’s certification that products meet EU safety rules and other legal standards. Under this new legislation, the framework has been set for customs to enforce and verify EU product requirements.
So, if by July 16 you haven’t got a local person or entity aligned as your businesses’ economic operator, or they aren’t named on your product packaging, you risk having your products sent back by EU customs authorities or rejected by online marketplaces such as Amazon.
While most big brands already have an economic operator, many smaller sellers do not. Be sure to check with your marketplace of choice to see if there are any additional requirements or recommendations for you to follow, so that you can continue selling in the EU in compliance.
Webinars in the week ahead
April 21: Key customer experience trends for ecommerce (Linnworks)
Various dates: Amazon advertising’s global webinar program rolls on with 20+ webinars scheduled, covering Sponsored Products, Sponsored Brands, reporting, optimization and tips (Amazon).
For US sellers
April 19: Learn how to find third party resources for your selling account (Amazon)
April 21: Discussion forum event for Amazon sellers (Prosper Show)
What we need is a great big melting pot
If you think the new EU regulations are tough, wait until you see what’s cooking at Amazon. Beginning April 22, 2021, a new Melting Temperature Attribute will be added to all ASINs. Currently, Melting Temperature is optional – but now it will be required to fill in when adding attribute information for:
- New ASINs
- All existing ASINs when you update any attribute on a product information page
Yes, all meltable items – such as chocolate, lip balm, and life-sized replicas of “The Wicked Witch of the West” will now have to have a listed melting temperature. As you might expect, Amazon Sellers who viewed the post on the Seller Forums are boiling mad about this new regulation.
Some have valid, practical questions, such as:
But some of the questions, are, well, more esoteric:
Or something you hadn’t previously considered:
Clearly, the heat is now on. As a public service to Amazon sellers everywhere, here are the melting points for several common items:
|iPhone (aluminum casing)||1221° Fahrenheit (in molten aluminum)|
|Toilet paper (or Fahrenheit 451 book)||451° Fahrenheit (well, they burst into flames)|
|Cheap plastic item from China||165° Fahrenheit (and definitely open a window)|
|Snickers bar (chocolate)||90° Fahrenheit (note: peanuts require extra heat to melt)|
|Amazon delivery van||Varies, but approx. 1 gigajoule of energy should do it (depending on the packages inside the van)|
As always, Web Retailer recommends an abundance of safety – do not try melting your inventory at home.
Read more at Amazon Seller Forums.