Before I begin, I must first pay my respects to the almighty Amazon as a consumer. Amazon you are the King of all things E-Commerce, the ace in the hole, the Great Bambino – You are Peyton Manning to the Denver Broncos.
Who am I kidding, I work in E-Commerce and all E-Commerce retailers understand the pain associated with selling on the Amazon marketplace. Whether it is feedback management, ASIN matching, paying seller transaction fees or my all-time favorite — the Undercut. If you have not had the pleasure of being undercut by Amazon I have detailed the struggle below.
Step 1: You optimistically sign up for the Amazon Marketplace.
Step 2: You capture sales and profit, you have an excellent store rating – Life is good.
Step 3: Amazon recognizes that life is good.
Step 4: Amazon then contacts your manufacturer and says, “I am the King of E-Commerce.” Provide me with these same products so that we can sell them under our corporate Amazon account.
Step 5: The manufacturer understands how many more units he can sell with Amazon and offers Amazon “aggressive” pricing for the products your seller account helped them identify.
Step 6: Amazon resells the same products you do but at a lower price because of their scale, efficiency and (potentially) a sweetheart distribution deal.
Step 7: Your margins have become razor thin, and you now compete regularly with E-Commerce super power Amazon. Life is not good.
E-Business pro Brian Walker elaborates on Amazon’s stance here.
“And while Amazon is contractually obligated not to observe individual merchants sales, it is not hard to aggregate data and gain insights. Some will see Amazon as a key partner in driving demand, others a lurking, very dangerous competitor.”
One way to avoid the Undercut but still tap into Amazon’s trusting consumer base, is to sign up for Amazon Product Ads. Depending on the inventory available, Amazon displays your listings at the bottom of SERPs or as product pages themselves. The kicker being that with Amazon Product Ads, the potential shopper is redirected to your actual website. You pay per click, avoid the fees, have the ability to remarket to your buyer and your information is kept safe.
But I digress…
As of yesterday I noticed another confounding issue with the empire that is Amazon. A client of mine that lists on Google Shopping and on the Amazon Marketplace mysteriously had two listings for the same product on Google Shopping.
I followed the first listing back to the product page of the website it’s supposed to. Then I followed the second listing back to an Amazon Webstore. FYI, the Amazon Webstore is an “All in One E-Commerce Solution,” where Amazon creates a destination URL for you to list your products. Think of it as a concrete extension of your marketplace listings where your products are grouped together. The catch is that for all sales on said Webstore, you still provide Amazon with their cut — the processing fees, transactions fees, and the standard 6-25% markup. It doesn’t a take a rocket scientist to see how interests can diverge here.
I contacted my client concerning the Webstore and he informed me that no one in his company started the Webstore. With this knowledge, I contacted seller support on his behalf and received the following response:
Amazon had been submitting the product data provided through its marketplace to the FREE Google Shopping so they could drive additional revenue to the sales channel they control and charge for. Not only was Amazon attempting to profit from an otherwise free listing but it was competing against my own listing. An otherwise cost free sale, is accredited to Amazon and subject to the associated CPA fee, all while I lose the ability to remarket to the customer I would’ve already acquired.
The “additional opportunity” Amazon offers should not include using Google Shopping as an affiliate, especially without the consent of the merchant.
We know every story has two sides; we encourage Amazon to reach out to us and submit a guest post to help the merchant community understand the purpose of the webstore program for marketplace accounts.