The Web Retailer News Digest for June 25th, 2021
The US representative for most of Seattle – Amazon’s home town – has put forward a bill that would see Amazon banned from giving sellers higher visibility on the site in return for using its fulfillment service FBA.
The bill, proposed by Democrat Pramila Jayapal, could even force Amazon to sell off its entire logistics operation, which includes billions of dollars of investment into a global network of high-tech fulfillment centers. Nearly 85% of Amazon’s biggest sellers use FBA.
Many lawmakers are now lining up to take down Amazon and its fellow big tech companies. With so many attacks being mounted, surely it’s just a matter of time before one of them hits the target.
Could Amazon and FBA be separated?
Amazon’s success has been built on FBA. The biggest selling point of the Prime membership program, with an estimated 147 million Prime subscribers in the US, is unlimited two-day shipping at no additional cost. It’s only by having its own highly efficient logistics operation that Amazon has been able to provide this.
When Prime was first launched in 2005, two-day shipping was virtually unheard of. The idea of receiving online orders so quickly, as a standard level of service, was radical. But Amazon wasn’t just offering two-day shipping, it was offering unlimited two-day shipping for one flat annual fee. Once you had signed up, you could buy as often as you wanted and never have to think about shipping fees again.
This has been the source of Amazon’s incredible growth – the main source of momentum that has set its famous flywheel of growth spinning at ever greater speeds. Prime and FBA, and Amazon’s rise to dominance, go hand in hand.
So what would happen if you split Amazon as a retailer apart from Amazon as a logistics operator? You would have one company that specializes in warehousing and distribution, selling its services to a separate company that specializes in ecommerce. Each one would need to survive independently, so costs would quickly rise.
Prime works because the annual fee is good value, and the more orders you place, the better value it gets. But there’s a limit to that. Would people still pay for Prime membership at $250 per year? What about $500? A thousand? At some point, the upfront fee will stop looking so attractive. Amazon’s flywheel will grind to a halt and the ecommerce landscape will start to take a very different shape.
Read more at Digital Commerce 360.
More anti-counterfeiting lawsuits announced
Amazon has filed joint lawsuits against counterfeiters, in conjunction with board game publisher Asmodee and clothing brands owner HanesBrands.
The lawsuit with Asmodee is against two defendants based in Brooklyn, New York, who tried to sell fake expansion sets for the popular card game Dixit on Amazon.
Amazon and HanesBrands filed 13 lawsuits against 17 defendants for selling earbud case covers with the registered Champion trademark. Again, the fake products were offered for sale on Amazon.
Amazon took action against multiple defendants in February, for selling fake versions of the Dutch Blitz card game and for passing off products as the Italian luxury fashion brand Salvatore Ferragamo.
The message here is clear. If you sell fake products on Amazon, there is a very real risk of being identified, pursued, and taken kicking and screaming through the legal system. Maybe only a small percentage of counterfeiters will feel the full weight of Amazon’s legal team, but if those few suffer harshly then many others will be persuaded not to follow in their footsteps.
Prime Day sales exceeded $11 billion
Total online retail sales in the US during Prime Day (actually two days) reached $11 billion – 6% more than in 2020, according to Adobe Analytics.
It’s important to note that these were not just Amazon sales, despite Prime Day being an Amazon invention. Conventional retailers including Walmart and Target were not above running their own sale events on Amazon’s day, and several others even borrowed the name with “primetime” events and the like.
Amazon was keen to highlight that customers spent $1.9 billion with small businesses on the Amazon marketplace as part of their spend $10, get $10 promotion in the run up to Prime Day. Amazon was footing the bill for the promotion, so it has effectively handed perhaps hundreds of millions of dollars to small businesses. We expect that more will be made of this by Amazon’s PR machine in the future!
The best selling products on Amazon this Prime Day were, as ever, Amazon’s own devices including Fire TV sticks and Fire tablets. Discounts were in the region of 40-50%, making these devices a great deal, while an endless parade of banal products with much slimmer discounts was also on display.
Now that the retail industry has co-opted Prime Day, maybe it’s time that Amazon went with a new name. How about telling it like it is, with “Amazon Devices Sale Day”?
Trading cards returns policy tightened up
In a rare change of policy in favor of sellers, eBay has reduced the window to return trading cards to only three days, in cases where the seller has a “no returns” policy but the buyer claims that the item did not match the listing.
Collectible trading cards have become more popular than ever during the pandemic, and prices can be highly volatile. Buyers have been abusing the returns system by claiming that items did not match their description, when actually the market value had dropped shortly after purchase and they simply wanted to renege on the deal.
The new policy goes into effect on July 29th.
Read more at ComicBook.com.
Webinars in the week ahead
June 30th: Outflank Competitors Using Amazon Market Intelligence Data (Prosper Show).
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
July 1: Unlocking Amazon Brand Analytics (Tinuiti).
For UK sellers
June 29th: Allegro: A Great Place for E-Commerce in Poland (ChannelAdvisor).
Amazon’s own listing gets hijacked
Many Amazon sellers have seen for themselves the different kinds of listing manipulations that take place on the marketplace.
Competitors have been known to sabotage listings, adding obscene images or changing the brand name, and causing severe damage to the merchant’s sales and reputation. They will also completely take over listings, often by finding an out of stock product with thousands of positive reviews then changing all the details to their own completely different product.
But posters in the Amazon Seller Forums highlighted a more novel kind of hijacking, involving several major brands and even Amazon’s own Echo Dot listing. An Amazon seller by the name of Krebly was able to offer a posture corrector featuring 80,000 reviews and over 800 answered questions… which actually belonged to the fourth-generation Echo Dot smart speaker.
Despite such a high-profile hijacking being posted on the forum on June 9th, it was still available to buy five days later. Krebly and their posture corrector have now disappeared, but we captured a video for posterity:
It’s no big secret that “bad actors” are running wild on the marketplace, and that the teams inside Amazon responsible for looking after the product catalog just can’t keep up. But if you ever doubt just how bad things are, remember that one of Amazon’s own flagship products was successfully attacked, and evidence was posted in a public forum, but the listing remained active nearly a week later.
Read more in the Amazon Seller Forums.