The Web Retailer News Digest for December 3rd, 2021

A company used access provided under Amazon’s official developer’s program to gather data on millions of Amazon customers. Then they created a service called AMZReview which resold the data to anyone who would pay.

The whole affair, exposed in a report by Wired, is being compared to the Cambridge Analytica scandal at Facebook. This also provided customer data to a third party through misuse of an official API.

A subsequent Amazon investigation into third-party developers found that more than half were breaking the terms of service.

Amazon’s own customer data scandal

Amazon discovered the data harvesting in 2018 after they saw the AMZReview service being marketed to sellers, but the access route used by AMZReview had been open for years.

Amazon responded to the discovery by limiting how much data is shared with sellers, and asking its largest developers to delete historical data. AMZReview itself has since closed down.

Despite the huge volume of data that was misused, Amazon says this was not a “data leak”. And there has not been a lot of coverage of the incident in the media, compared to similar incidents of this size.

Data on five million customers being misused is bad enough, but what about all the other developers who have been breaking the rules? Are there other companies out there like AMZReview, that we just don’t know about yet?

This data was acquired through an official channel rather than a malicious hack, but that doesn’t change what data was exposed. Leaving a door wide open so outside companies can access your data is no better than if they break in past your security.

Read more at Business Insider.

FBA business valuations have doubled

Research by Marketplace Pulse has found that Amazon seller valuations have doubled in less than two years.

No doubt driven by the new breed of Amazon aggregation companies like Thrasio and Heyday, valuations have risen from 2.5x – 3x earnings in 2020 to 4x – 8x today, sometimes with post-sale earn-outs bringing the total valuation to 10x or even higher.

Amazon Seller Acquisition Multiples
Source: Marketplace Pulse

It’s no surprise that increased competition for the best Amazon brands has sent valuations up, and that’s good news for sellers. It’s not so great for the companies acquiring them. Despite the Amazon aggregation business model being so new, some companies have already landed in financial trouble:

More aggregators will enter, and more capital will flow in (and other types of buyers – aggregators announcing capital raises are attracting hundreds more private equity and other investment firms). However, some aggregators are already struggling; a few distressed firms are looking for an exit, but buyers typically only want to buy their best brands.

Read more at Marketplace Pulse.

eBay buys sneaker authentication company

eBay has acquired Sneaker Con, a company which verifies the authenticity of collectible sneakers.

Collectible and luxury goods, including trading cards, luxury watches and luxury handbags, have been big growth segments for eBay in recent years. The company offers an Authenticity Guarantee which provides a physical inspection of items, at no cost to the buyer or the seller.

We reported on the sneaker sniffers who authenticate shoes for eBay in May this year.

eBay sneaker authentication

Read more at The Verge.

Also in the news

  • Amazon updates seller policies to explicitly prohibit search rank manipulation. Amazon.
  • Amazon launches a new Compliance Reference tool. Amazon.
  • Study finds Amazon to be cheaper than Walmart. Profitero.
  • How Amazon sellers solicit fake reviews, step by step. CNET.
  • New features live for eBay Promoted Listings Advanced. eBay.
  • eBay refurbished Facebook livestream falls flat. Value Added Resource.
  • Amazon will surpass UPS and FedEx in 2022. CNBC.
  • Shopify edges closer to having a marketplace. Marketplace Pulse.
  • Etsy tech provides more accurate Christmas delivery dates. Etsy.

Webinars in the week ahead

For everyone

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

December 7: Retail Operations Lessons Learned in 2021. Tinuiti.

And finally…

Amazon’s Black Friday breaks records. Everyone else, not so much.

Amazon says it had record sales from Black Friday to Cyber Monday. It is remaining tight-lipped on the actual numbers, but did say that home, toys and apparel were among the top-selling categories. 

The best-selling items for Amazon were Apple AirPods, REVLON One-Step Hair Dryer, Fire TV Stick with Alexa Voice Remote, Echo Dot (3rd Gen), All-new Echo Show 5 (2nd Gen), Sengled Smart Light Bulbs, Beats Studio Buds, and Colorfulkoala Yoga Pants.

Online shopping as a whole didn’t seem to do so well though, with both Black Friday and Cyber Monday slightly down on last year according to Adobe Analytics

And then there’s in-store shopping. That is still doing horribly, compared to pre-pandemic levels, with Black Friday shopping down 28% compared to 2019 levels.

So it’s Merry Christmas to Amazon, as it continues to vacuum up evermore sales. And a lump of coal in the stocking for every other retailer out there.

Read more at CNBC.


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