Amazon News Roundup, Volume 6

Seller chatter

Amazon wants sellers to expand internationally, and they’re offering people discounted subscription fees if they do it. They recently sent out the following letter to sellers active in the Amazon US marketplace:

Dear seller,

To help you grow your business internationally, we are offering a discounted monthly subscription fee of $39.99 (see footnote 1) that will allow you to sell in 10 countries. Register now to sell in North America, Europe, Japan and India, and we will limit your total monthly subscription fee for all your accounts to $39.99, a discount of up to $89.00 per month (see footnote 2).

Follow two easy steps to take advantage of this offer:

1. Register an account to sell in a new region. If you are already registered in multiple regions, go to step 2.
2. Link all of your accounts.

Your fee discount will be automatically applied to your account starting in your next billing cycle (you will pay the full fee in each region for the first month). You can view your fee discount in the transaction details section of your Payments report.

Go to this help page to learn more and get started: https://sellercentral-europe.amazon.com/gp/help/G201841950.

Thank you for selling on Amazon.

Regards,
Amazon Services Europe

Footnote 1: Estimate based on prevailing exchange rates on May 15, 2019.
Footnote 2: Referral fees, FBA fees, Closing fees, and other fees will still apply.

What does this mean?

Not only is this a win for sellers because of the great discount, it also tells us that Amazon is in dire need of sellers in those marketplaces. Europe and Japan, in particular, are large markets–second and third (respectively) to the United States store–but aren’t nearly as competitive as amazon.com.

And this isn’t the first time we’ve seen Amazon push for sellers to enter the EU market.

For years now, Amazon has worked diligently to get its US sellers into Europe. The EU marketplaces, combined, have almost as many shoppers as the US. So EU sellers could, potentially, experience the same volume of sales as the US, but without the same volume of competition.

Of course, selling internationally comes with its own challenges. Sellers will need to change the labeling on their products to cater to non-English speakers, and tax laws are different, too. For example, the EU uses a Value Added Tax (VAT), which is paid for by the vendor; unlike the US, where the buyer is responsible for paying the retail tax.

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A couple of months ago, Amazon stopped placing large orders from their first-party vendors, giving rise to a fear that Amazon may be scaling back on “Mom-and-Pop” vendors. But Amazon denies it.

They stated that this was part of a move to help clear out counterfeit products and improve the market place. But now, it looks like a larger “purge” might be coming.

Bloomberg reports, “…vendors selling less than $10 million in products each year on the site will no longer get wholesale orders from Amazon, although that will vary by category, said the people, who requested anonymity to speak about an internal matter.”

Of course, Amazon will continue to order from large partners such as Procter & Gamble, Sony, and Lego.

And keep in mind that this will just affect first-party sellers; those who sell their wares directly to Amazon. Third-party sellers who sell their products via Amazon FBA will not be affected by this change.

In fact, it would appear as if Amazon is doubling down on its efforts to support its Amazon FBA sellers by making this dramatic move. With Amazon acting as the distributor for fewer and fewer smaller brands, the competition will be greatly reduced.

According to Bloomberg, “About half of the goods sold on Amazon come from independent merchants, and the change will push the marketplace share of revenue even higher.”

– Bloomberg

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Starting in June, and running through January of 2020, Amazon will be offering up to 75% off inventory storage fees for Amazon FBA sellers. This is a push to increase the availability of their one-day shipping.

To qualify, sellers need to sell 60 or more items per month, or have their product hand-selected by Amazon. Furthermore, inventory levels must be kept at an acceptable level determined by Amazon.

Amazon needs to work closely with third-party FBA sellers in order for this push to work though. Amazon has the logistics in place, but without the assistance of their sellers, they won’t be able to keep up.

Of course, this move is in stark contrast to Amazon’s treatment of storage fees in previous years. Last year alone, sellers saw long-term storage fees more than double. Fortunately, this is something that Amazon has since pulled back on, and this move to boost one-day shipping looks to continue the trend.

Additionally, now that Amazon appears to be “purging” first-party vendors and suppliers (see above), this will leave even more room for Amazon FBA sellers to compete in the market place.

– Business Insider

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Every experienced FBA seller knows how difficult getting good reviews (or any reviews!) on Amazon can sometimes be. But what do each of those little yellow stars actually mean? And does Amazon play fair with its ranking system?

In a recent article, Wired.com looked at Amazon’s stars. Here are their major takeaways:

• Starting in 2015, Amazon began weighting stars using a proprietary machine-learning model.
• Some reviews now count more than others in the total average, based on factors like how recent they are and whether they come from “verified” purchasers.
• Amazon targets more than just “fake positive” reviews for removal. An Amazon spokesperson told Wired, “We estimate more than 90% of inauthentic reviews are computer generated, and we use machine learning technology to analyze all incoming and existing reviews 24/7 and block or remove inauthentic reviews.”

Of course, even a company with its tech-ear to the ground like Wired admits they aren’t totally familiar with how Amazon’s rating system works. However, the consensus remains the same: good reviews are still the key to success on Amazon.

So ask yourself this: “What does Amazon want?”

Amazon wants to be the largest retailer in the world, offering the best possible service to its billions of customers. That means it must provide an authentic and safe experience for its shoppers.

The more it can remove fraud and “black hat” strategists from its environment, the closer it gets to achieving that goal.

Amazon FBA sellers will discover that the best way to get good reviews is the same way it’s always been: do what’s right by the customer always and strive to be exceptional.

– Wired

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Amazon FBA news this week

Need to know for Amazon FBA Sellers

1. What brands are doing to prepare for Amazon Prime Day 2019 – Forbes
2. Should Amazon be liable for products sold in its marketplace? – JD Supra
3. Here’s an Amazon shift that could benefit Shopify – Market Realist

Also of interest:

1. More than ever, Amazon seems to be saying it’s no longer a retailer – Forbes
2. Despite Ocasio-Cortez’s best efforts, Amazon may be returning to New York – Townhall
3. How Amazon leverages data for its brick-and-mortar stores – Yahoo! Finance

 

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