[Crew Review] More expensive Amazon ads?

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The future of Amazon and Google ads

Amazon has officially gone past the 10% mark last year in US digital ad shares. Google, on the other hand, is taking the blow of the ecommerce giant’s growth.

What can this mean for sellers who advertise on either platform, and will we see a similar trend in the coming years?

Prepare for the change.

China hits Alibaba again

After Jack Ma said some things that didn’t sit well with the Chinese government, nobody could blame him for lying low for a few months.

Now, his company is slapped with a $2.8 billion antitrust fine, otherwise known as an anti-monopoly fine.

It started with vendor claims that the company is punishing sellers who use other platforms in addition to Alibaba. The practice is known as er xuan yi, which translates to “choose one out of two.” 

This move makes sense in things like choosing a life partner or deciding which twin is slightly more attractive. But in this context, it potentially results in monopoly.

This is unseen in Amazon, where sellers are free to use other platforms, including their own sites, to market and sell their products. Some sellers might have their accounts suspended or their inventory destroyed from time to time, but at least they still have the liberty to explore other options. Thanks, Jeff.

This isn’t the first time the Chinese government went after a big company, however. In 2015, Qualcomm had to cough up $975 million to resolve a China antitrust dispute.

In addition to the fine, Ant Group, which is 33% owned by Alibaba, is forced to revamp its business. Specifically, they should

• Restructure into a financial holding company
• Create more separation between its payment app Alipay and its credit products
• Reduce its money market fund

Government probes like these are expected to affect more companies in the future.

Is Amazon lying about prices?

Last month, the State of California filed a complaint with the following allegations:

• A material number of Amazon’s reference prices were either misleading or had the capacity to mislead.
• In some advertised reference prices (ARPs) that referred to former prices, there was insufficient disclosure to the consumer of the methodology used to derive the former price.
• In some ARPs, there was insufficient disclosure that the reference price is not necessarily the prevailing market price or regular retail price.

In the decision, Amazon was ordered to pay

• $100,000 as cy pres restitution
• $1.7 million as civil penalty
• $200,000 for investigative costs

The company is also mandated to not do anything within California in connection with ARPs that can mislead or have the potential to mislead buyers. This is effective for 3 years, starting April 1, 2021.

In particular, there should be a hyperlink that explains clearly the definition of the terms used such as “List Price” and “Retail Price.” The definition should also include a statement that the List Price may not be the prevailing market or retail price.

This requirement also applies to terms such as “Former Price” and in using a strikethrough symbol to indicate lowered prices.

But let’s face it. Majority of buyers don’t really read the fine print. But at least the ecommerce giant is mandated to be transparent in some way.

More delivery stations are coming

Three new Amazon delivery stations are set to open in Texas in San Antonio and Schertz, while two others will also be opened in Las Vegas Valley.

Amazon says these new delivery stations will not only benefit sellers but will also create around 300 new jobs with a starting salary of $15 per hour. Full-time employees will also get medical benefits and 401(k)s with a 50% match since day 1.

The unionization efforts in the Alabama warehouse failed, but with the that-was-close feeling still in the air, maybe Amazon will treat its employees better.

The need for mentors

Plato had Socrates. Gates has Buffet. Zuckerberg had Jobs.

The greats had mentors that guided them towards the very greatness we know and aspire.

A good mentor is someone who

• Is an expert in the field
• Wants to see you succeed
• Gives personalized advice
• Is transparent and doesn’t hide the secret sauce

At EcomCrew Premium, we have two of those, along with a support team whose business is to make sure you get the best experience possible.

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