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.

BUT…

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:

 

 

Wait… What!?

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.

 

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About the AuthorKaten is an Account Manager at CPC Strategy and works with e-Commerce merchants to get the most out of their PPC Campaigns. Using cutting edge techniques and strategic insight, Katen works to optimize the return for a variety of online retailers. Before joining the team Katen graduated from the University of California San Diego, with a double major in Economics and Psychology. See all posts by this author here.

  • A little odd that Amazon would opt you into that program without your knowledge.
    Are the links different at all?

    I imagine that this will be followed up with email campaigns later on to all these “new Webstore” merchants saying “did you know you’re already getting 10k visitors a month to your Amazon Store? Customize it a little more to get even more traffic.”

    It’s somewhat common knowledge that Amazon Webstores aren’t that popular. This is 100% a signup tactic for that platform.

    Did you ask them how to stop your products showing up in Google?

    • Hey Rick,

      The links are indeed different since they point back to the Amazon Webstore and not the actual seller’s website. They did also manipulate some of the tracking parameters for their own GA account.

      You make a good point about the email campaigns. I noticed that Amazon was not submitting the entire product line to Google Shopping, but a large % of our top sellers via the Marketplace were being submitted. I could definitely see the sales they spurned as fuel for sign up with the Webstores and the fact that they only used top sellers makes this even sneakier. For most merchants with popular products there could be anywhere from 10-50 sellers of the same product per Google Shopping comparison page, making it a little more difficult to catch.

      In order to get the extra listings down we reached out to them via Amazon Marketplace support. They then removed the Webstore entirely.

      I appreciate the insight.

  • I will say that’s some good advice. Thanks for the insight.

  • Isn’t this information old as google products is now paid.

  • Faced with what at times appear to be the limitless power and greed of both Amazon and Google, I often why I remain in the retail biz. With each passing year, I feel less like an independent retail business owner, and more like a serf, spending most of my time trying to keep up with the whims of these two Retail Overlords, in hopes I might, at the end of the day, have enough money to keep the business afloat and feed my family. Isn’t this what anti-trust laws were supposed to prevent? Or are anti-trust laws just so 1990’s? In any case, Amazon and Google have collectively made it more a stressful chore, and less a realization of the American Dream, to operate my own small business.

  • Faced with what at times appear to be the limitless power and greed of both Amazon and Google, I often why I remain in the retail biz. With each passing year, I feel less like an independent retail business owner, and more like a serf, spending most of my time trying to keep up with the whims of these two Retail Overlords, in hopes I might, at the end of the day, have enough money to keep the business afloat and feed my family. Isn’t this what anti-trust laws were supposed to prevent? Or are anti-trust laws just so 1990’s? In any case, Amazon and Google have collectively made it more a stressful chore, and less a realization of the American Dream, to operate my own small business.

    • I think multi-million dollar and even billion dollar companies can still be made from retail, but some serious out-of-the-box thinking needs to be done. What I do know is that tons of retailers feel the same way is you.

      From here, we can look towards the government stepping in and making changes to the current market, which I think will not play a major roll (maybe a minor one) in how successful you are with your business (remember the federal government is a monopoly as well, they’re not a SMB association),

      OR we can seriously re-evaluate what it means to be a leading online retailer in today’s market. Looking at past trends and evolving, some consistencies remain in the market:

      1. A great product or invention can go viral and make you a millionaire literally overnight. You just have to be the ones with the reins on all faucets of it’s creation. Or at least as many as you can. That’s why manufacturers weather the Amazon storm better than most retailers.

      2. A unique business model that presents products in such a compelling way your impulse is to buy them (think Groupon).

      3. The unfortunate realization that just like in any business, retail businesses fail often in the market just because of the same market trends seen in brick and mortar businesses, as Target and Walmart centers spread like wildfire and put thousands of small businesses out of business.

      So one thing I think we can agree on is major innovation needs to be done or you’re just waiting for your fate to be decided by one of these juggernauts slowly eating into your market share.