EcomCrew - [Crew Review] Investigating Amazon

Changes

It’s Not Only 3P Sellers

D.C Attorney General Karl Racine filed an antitrust lawsuit against Amazon last May to end the company’s alleged anti-competitive practices. The suit focused on the ecommerce giant’s relation with third-party sellers and how they are prevented from selling their products at a lower price on other platforms.

However, Racine recently pulled a “Wait, there’s more” move against Amazon and amended his complaint. He’s now alleging that it’s not only 3P sellers that are affected by the company’s monopoly. Even 1P sellers are at a disadvantage.

 

Karl Racine | Image Source: University of Virginia School of Law

He pointed to the “Minimum Margin Agreement” Amazon has with wholesalers. Under this agreement, 1P sellers guarantee Amazon a minimum profit. So if the seller doesn’t reach that margin, he has to make up for the difference somewhere else. This, according to Racine, will lead to wholesalers raising their prices when they sell their products elsewhere.

Amazon spokesperson Jack Evans has earlier defended the company against the original antitrust complaint, saying sellers are actually free to set their own prices. But there’s a catch. If the products are not priced competitively, they have the right not to highlight the offers.

Anyone who knows how the Buy Box works knows how crippling this refusal to highlight is. Price is not the only factor to get a share, but it’s a big factor.

So what does CEO Andy Jassy have to say about these accusations of monopoly?

He’s confident the company is far from it. Jassy pointed to other large companies Amazon is competing against, such as Walmart and eBay, and said that Amazon’s “retail business is just about 1% of the worldwide retail market segment. It’s nowhere close to a majority share.”

So this giant doesn’t see itself as such. The humility is admirable.

 

Unreliable Open Rates

For any email marketer, metrics such as open rates and click-through rates are very important in determining how they feel for the rest of the week plan their next marketing strategies. But in a move to protect users’ privacies, Apple is rolling out a new iOS that will make your open rates unreliable.

The iOS 15, which will officially be out on September 20, will have additional privacy features, two of which are Hide My Email and Mail Privacy Protection.

Hide My Email does exactly what its name says. So when a reader visits your website, for example, and you ask for an email in exchange for free materials, they can turn this feature on and Apple will generate a random email.

There’s really no harm at this point because all marketing materials will still be sent to their real emails. But they can eventually decide to delete that random email so they won’t even have to unsubscribe. The email just ceases to exist.

The Mail Privacy Protection, on the other hand, can

  • Stop marketers from using invisible pixels to collect user information
  • Prevent senders from knowing when an email has been opened
  • Mask IP addresses

So some September 20, don’t get discouraged if your open rates change dramatically. It’s just Apple showing how much they care about their users.

Despite these changes, however, email is still one of the top marketing strategies. Even though we won’t see accurate open rates, we know email marketing will remain one of our most significant revenue drivers.

If you want to know how we built a business using email, we developed a whole course around it.

 

Refurbishment and Liquidation

In case you missed the announcement last week, Refurbishment and Liquidation are now part of your value-recovery options for unfulfillable inventory.

Effective last September 9, this change will allow sellers to choose either automated refurbishment, liquidation, or both.

According to Amazon, eligible products can be available for wholesale liquidation, after which the recovery value will be transferred to the seller’s account.

On the other hand, under the Refurbishment option, new products that are returned by customers but require some refurbishing will be returned to sellable status—at no cost to you!

This sounds fine and dandy, but here’s the problem: it may lead to account health issues and more negative reviews. Customers may not be too happy to find a less than impressive packaging or product at their doorstep. And all blame goes to you as the seller.

 

The Last Live Webinar

One of our most valuable features in EcomCrew Premium is our monthly Q&A webinar, where our subscribers get to ask us their ecommerce-related questions so we can give actionable solutions.

Although we don’t have that feature in our courses, we’re including 3 live webinars in our newest course, From 0 to 100 - FBA for Beginners. The last one is just a few hours from now, at 10 AM (PST).

To join us and get lifetime access to over 20 HD video lessons that you can add to your new hire training track, access the course now.

 

Your Exit Plan

Want less stress and more cash? Let go of your business.

A lot of Amazon 3P sellers have chosen this route since last year when rollup companies began to aggressively acquire brands. But even if selling your business is the last thing on your mind right now, it’s never too early to plan a graceful and profitable exit.

If you want to take the initial steps in preparing your business for sale, join us on October 5 at 10 AM (PST).

Let’s face it. You can’t cram your way into a lucrative goodbye. So you better take notes now.

Sell your business for top dollar.

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