The Web Retailer News Digest for June 4th, 2021
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With the official announcement of Prime Day for June 21-22, Amazon is now beginning to hype up the event – and they’re doing it with an excellent promotion to support small business sellers in the US and UK.
From June 7-20, Prime customers who spend $10 or £10 on selected products from eligible small business brands in the US or UK will receive a matching $10 or £10 credit. The credit can be spent on any products during Prime Day itself. The promotion is fully funded by Amazon, meaning sellers will receive the full amount for their products and shoulder none of the cost themselves.
On the surface, this promotion seems to be a win-win-win for customers, small brand owners, and (of course) for Amazon.
But is it too good to be true? What are the eligibility requirements? Will Chinese factories find a loophole and hoover up big checks from Amazon? How can small businesses make the most of it to increase sales and customer engagement? The good news is, we’ve got answers.
Amazon’s generous promotion for small brand owners
The first thing that both US and UK sellers will want to know is, “Am I eligible?” Amazon is being quite proactive on that front. According to both the US and UK announcements, Amazon will be sending sellers an email on June 7 with a link to view all products eligible for the promotion. In general, the criteria are:
- Your Amazon business must qualify as small per Gartner’s definition: fewer than 100 employees and less than $50 million in annual revenue.
- Your Amazon business must be based within the country where the promotion is taking place, either the US or the UK. (Note that the promotions are separated by country, and are not overlapping.)
- Your Amazon business must be registered with Brand Registry or participate in the Handmade program. The specific products in the promotion must be owned and sold exclusively by you, the seller.
Essentially, this means there is a very wide swath of sellers who will be able to take advantage of this promotion. There are FAQ’s available for both US and UK sellers that break it down in more detail (including how to opt-out, should you wish to).
How can eligible small business brands take advantage of this promotion? Marketing to previous customers directly (within the bounds of Amazon’s Ts & Cs) and via social media seem like the most obvious ways to share the windfall that could ensue. Considering that Amazon is essentially giving customers 50% off a $20 item, the marketing – and profit – possibilities are immense. Overall, this promotion seems like quite a gift Amazon is giving to small business brands.
On the downside, there is the strong possibility that businesses who are ineligible will try to manipulate the situation so they can benefit as well. Shell companies based in the US who simply act as a local importer and seller for Chinese factories would surely love to get their hands on this.
There are millions of marketplace sellers. Is Amazon going to vet each one of them to establish if they are genuinely a US business with their own products, and not just a local front company? The world will be watching, and if this cash starts getting funneled to the wrong businesses, people are going to notice very quickly.
Read more at Amazon Seller Forums (US and UK).
Amazon news
Arbitration clause dropped for consumers, but not sellers
In a victory for individual legal rights, Amazon customers will now be able to sue the company in court. Previously, all customer disputes against Amazon had to be handled in private arbitration.
The change was made in the wake of thousands of arbitration demands being brought against Amazon over the recording of conversations by its Echo smart devices. One catch (and with Amazon, there’s always a catch): all claims must be adjudicated in the state or Federal courts in King County, Washington (Amazon’s home) and without a jury trial.
For sellers, this news will engender some serious envy, as they are still covered by section 18 of the Amazon Services Business Solutions Agreement to binding arbitration for all disputes.
Amazon and you both consent that any dispute with Amazon or its Affiliates or claim relating in any way to this Agreement or your use of the Services will be resolved by binding arbitration as described in this paragraph, rather than in court
This same section also strictly limits sellers to individual proceedings, prohibiting any class, consolidated, or representative hearings – as well as any jury trial, should an arbitration find its unlikely way to a courtroom.
As savvy Amazon sellers are aware, an arbitration process can be long, winding, and end up with a negative result for a seller, even if they win. In a recent case reported, one seller ran up $200,000 in legal fees in his arbitration case. While he won his case, he settled for only half the value of damages asked ($700,000), of which nearly a third went to lawyers.
Sellers, in general, are deprived of their legal rights under Amazon’s terms and conditions. While the recent opening of legal action to consumers is a step in the right direction, sellers are left to wonder if their legal rights will ever be equal to those of their customers.
Read more at CNET.
Brazil joins the unified selling accounts system
In an announcement that should come as good news to professional Amazon sellers in the North American unified account system, the Amazon Brazil marketplace has been added.
This will allow sellers in the US, Mexico, and Canada to use their existing accounts to sell on Amazon Brazil; and conversely, will allow professional sellers in Brazil to use their accounts to sell in the US, Mexico, and Canada.
Brazil is the world’s sixth most populous country and the largest ecommerce market in Latin America, with 32.5% of all sales. Amazon Brazil hosts 54 million visitors per month. These factors make it an enticing market with great growth potential for North American unified account sellers.
There’s no word yet if Amazon will now be referring to the North America unified account system as simply the “Americas” system; or if Jeff Bezos has, in fact, purchased Brazil with petty cash and is moving it north.
Read more at Amazon Seller Forums.
FBA liquidations scheme comes out of beta
Are you tired of paying FBA fees for a warehouse full of stock that isn’t selling or that has been returned by customers in an unfit state to resell? Would you like an option to get some cash for it, rather than having to pay Amazon to throw it away? If so, Amazon’s new FBA Liquidations scheme might be for you. This program has moved out of its beta trial and into general availability effective for US sellers from June 1, 2021.
With FBA Liquidations, Amazon will find a wholesale liquidator for your unsellable or overstocked products, “allowing you to recover typically 5% to 10% of an item’s average selling price.”
This will allow sellers with excess merchandise to get out from under FBA warehousing fees and recover some value for their goods. There are some advantages to this for sellers: convenience; savings in storage and removal/disposal fees; and relief from the hassle of trying to contract with a broker yourself.
However, there are also the dangers of an unscrupulous reseller undermining your brand with damaged products that find their way back onto the marketplace and are sold as if they are “new”. There’s also the potential for buyer fraud, where customers return products then buy them back as clearance items at a lower price. Hopefully, Amazon will vet their liquidation partners thoroughly and hold them to the same strict terms and conditions as its sellers.
Read more at Amazon Seller Forums.
Other marketplaces
eBay gives trusted authorities a backdoor to remove items
eBay has announced that its new Regulatory Portal, a way for trusted authorities to report and remove listings, has entered beta testing. This program will allow a global group of partner agencies in law enforcement, health, welfare, and logistics to flag and remove any listing that constitutes a risk to consumer safety – without approval from eBay. The new program was likely set in motion by the proliferation of scam products during the pandemic.
While a safer marketplace is important for all stakeholders, the question remains: what happens if mistakes are made, or if this program is deliberately abused?
The Regulatory Portal is similar in function to eBay’s Verified Rights Owner (VeRO) program, which allows owners of intellectual property (IP) rights to report infringing listings; and to Amazon’s Report Infringement portal, which serves the same function. Both programs are known for cases where reports are filed that are abusive, or simply without merit, but result in harsh action being taken against sellers all the same. Under those programs, sellers do have a chance to appeal. Their appeals may fail, of course, but at least there is a degree of transparency and due process provided.
The Regulatory Portal will be operated (and listings removed) at the discretion of law enforcement and regulatory agencies. Will they all have the marketplace knowledge to operate with proper discernment? What if a mistake is made? A seller could lose everything if their product listing is pulled due to human error or a misunderstanding. How do they appeal? The closest hint of a remedy currently is:
Further functionalities, including the ability to communicate with buyers and sellers through the platform, are to be developed over the coming months.
Yikes. Is “communicating with you, coming soon!” really an appropriate answer when someone’s business is on the line? It’s also concerning that the authorized agencies can act unilaterally, without a second level of approval from eBay. While the basic intention of the portal is sound, there remains many questions as to how fairly it will operate for all concerned – especially for sellers.
Read more at eBay Inc and EcommerceBytes.
Etsy acquires fashion marketplace Depop for $1.6 billion
Seeking to broaden its reach to the Gen Z demographic, Etsy plunked down a handcrafted, artisanal $1.625 billion for secondhand shopping platform Depop. If you haven’t heard of Depop, it may be because you are not in the 24 and under age bracket.
Depop primarily has selfie-enthusiasts moving clothes, designer sneakers, and some crafts, in a heavily social media influenced setting. Encouraging its sellers to use Instagram and loved by 140,000 on TikTok (do you feel old yet?), Depop “popped” with $70 million in revenue in 2020. It boasts 4 million buyers and 2 million sellers, and 90% of its users are under 26.
Contrast that market with Etsy, where the average seller’s age is 39 and 86% are women. While the “housewife professional Etsy seller” is surely a stereotype, these numbers show a glimmer of truth in that.
Rather than try to attract younger people to its own platform, Etsy has simply chosen to invest its 2020 facemask profits into another platform that’s already the home of a desired demographic. This is similar to Etsy’s acquisition of Reverb, a major market for new, used, and vintage musical instruments.
Etsy’s long-term strategy appears to be building a portfolio of brands that do similar things but cater to different demographics or markets. It will be interesting to see if they are all eventually merged under one banner, like a FrankenEtsy, or allowed to grow their own separate ways.
Read more at Vox.
Webinars in the week ahead
For everyone
June 8: Prepare for Prime Day 2021: Top Sponsored Products strategies (Amazon).
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
June 7: Top Tips for Launching Your Amazon Sales (Amazon).
June 9: Prime Day Ask Me Anything (SellerLabs).
For UK sellers
June 7: What does the One Stop Shop VAT legislation mean for Amazon sellers? (Amazon).
June 8: EU VAT Changes (DIT).
June 9: Help grow your unique brand with Amazon Launchpad (Amazon).
And finally…
Amazon installs meditation booths to help mental health
For a company with a string of damning media reports on employee wellness and safety, Amazon certainly is going to new heights to improve their reputation. Jeff Bezos’ farewell missive, the 2020 Letter to Shareholders, went out of its way to shout down the haters and affirm a new goal for the company: Earth’s Best Employer and Earth’s Safest Place to Work. Now, with Bezos’ last day on July 5 rapidly approaching, we are starting to see the results of his master plan.
Step 1: The AmaZen booth, described as:
Phone booth-sized boxes for exhausted employees to meditate, receive positive affirmations, and listen to calming sounds.
Yes, when you’re getting that fulfillment center stress overload, you can now hide in a small box decorated with plants and listen to healing meditations on a networked computer that is definitely not spying on you. Just look at how chilled out and zen it is:
As you might expect, reactions have been mixed. One employee said that, “AmaZen gives me an opportunity to take time for myself to just pause and regroup which helps me be better at work.” But commenters online labeled it as “dystopian” and a “crying booth”.
Completely unofficially, we are hearing some interesting reports of unintended consequences regarding the newly installed AmaZen booths.
- A forklift supervisor at the Dubuque, Iowa, fulfillment center entered a booth and came out wearing a “Superman” onesie and demanding to be called only by the name “Kal-el”.
- In Guadalajara, Mexico, a booth was converted to a stand selling hot churros and carnitas tacos. No one claimed responsibility, but the tacos have since received their first Michelin star.
- At the Edmonton, Canada, fulfillment center, the entire third shift arrived for work dressed in clown costumes and attempted to cram themselves into the AmaZen booth. A Guinness Records review is pending.
OK, maybe those were more imagined than heard. But seriously, while we applaud the recognition of the importance of mental health and wellness by Amazon, perhaps recognizing the importance of living wages, protecting whistleblowers, paying a fair share of corporate taxes, and cultivating a great work environment would be a better legacy for Jeff Bezos than a “penalty box” for stressed-out package handlers.
At least, that’s what came to us in our meditation today.
Read more at Business Insider.
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