This year, a growing set of acquisition companies have turned buying up Amazon third-party sellers into an incredibly lucrative business. In exchange for an upfront payment, usually in the high hundreds of thousands or low millions, these companies will buy out successful Amazon third-party sellers and roll their products up into a larger conglomerate. That has made “getting acquired” an increasingly common goal among the most successful Amazon sellers -- and it might signal a broader shift in the culture of selling Amazon, as vast troves of outside capital floods into the sector.
Amazon is slowly offering an option that would let sellers fulfill orders outside of its marketplace in unbranded boxes. In doing so, Amazon is only deepening its influence over the e-commerce world -- so much so that, if sellers opt to use its fulfillment services, Amazon will continue to make money no matter where consumers buy from. In a world where Amazon controls much of e-commerce logistics, even consumers who want to avoid shopping at Amazon might still end up benefiting from the corporation’s massive reach.
At the same time as retailers are racing to perform ever-faster shipping times, they also appear to be upping the incentives for slow delivery. Retailers, including Amazon, Target and Macy's are all offering shoppers discounts in exchange for longer shipping times. And that split might signal a changing mindset for some retailers -- rather than focusing on speed at all costs, some are taking a more nuanced approach to logistics.
Things likely won't be as crazy as they were last April for Amazon. But if panic buying does happen again, Amazon seems more prepared to handle it -- and to neutralize a subsequent rush of price gouging. Experts say the company has tweaked its algorithms to deal with new challenges. But even more hurdles lie ahead, and sellers are worried their businesses may be impacted.
On the surface, Amazon Explore looks almost identical to Airbnb’s Online Experiences platform, even down to the layout. Users toggle through a series of live-streamed sessions -- like cooking classes, ghost tours and fashion tutorials -- broken out by continent. But instead of an attempt to disrupt the hospitality industry, for Amazon, Explore seems to be an experiment with another, more intimate model of selling goods. It's all part of Amazon's move toward live-streaming commerce and more organic product discovery.
A growing network of e-commerce platforms like Shop Where I Live and Bookshop.org have popped up to provide a close-to-home alternative to Amazon. Their vision is of an online shopping world that isn’t dominated by two or three giant companies, but instead is decentralized across hundreds of different, localized websites. Already in a number of cities worldwide, these websites focus on getting small businesses online and creating more equitable business models. But do they present a viable alternative to Amazon's growing dominance?
At the time of its debut, Amazon seemed late to the subscription box trend. After first gaining momentum with the rise of Birchbox in 2010, some experts thought the bubble was bursting. But subscription boxes have witnessed a bit of a renaissance during the pandemic -- and while the surge is led by the industry’s biggest names, more quietly, small retail stores like Speach’s are turning to Amazon to roll out their own subscription-box businesses. They see the boxes as a vital driver of growth in a time when brick-and-mortar retailers are still struggling to make ends meet.
While Section 230 might not be keeping Bezos up at night the way it is Mark Zuckerberg, the law does still have significant implications for Amazon’s future business -- especially when products bought on the site turn out to be dangerous. A small number of court cases are revealing an awkward contradiction for the company: One of Amazon’s greatest strengths as an e-commerce platform -- its vast logistics network -- might also be making it look a lot like the true seller of a third-party item, opening it up to new types liabilities.
Amazon unsurprisingly posted record third quarter earnings. Sales exceeded expectations, as did profit. Still there were a few things of note. Amazon didn't highlight its third-party sellers as much as past years, for example. It did, however, nod to its growing suite of new revenue engines. Here's a look at the e-commerce giant's most recent earnings.
In a sense, #BoxedOut was just a clever advertising effort. But the central thrust of the campaign — that a group of small independent booksellers would coordinate to fight Amazon’s disruption of its industry — felt oddly new. While plenty of one-off businesses have criticized Amazon before, coordination on a broader scale is rare. And it might signal a future trend among small retailers struggling to match Amazon and Walmart — if they want to beat the heavy hitters, they need to work together.
Lawyers and other experts who specialize in seller suspensions say that a recent wave of suspensions was among Amazon’s biggest. Craig Gedey, whose firm Thompson and Holt advises suspended sellers, told Modern Retail, “It’s the busiest weekend we’ve had all year.” But the mass suspensions represent a familiar pattern for Amazon -- whenever the company tweaks its algorithm, often without warning, sellers find their livelihoods on ice overnight.
Amazon would really like a peek at your Target receipts, all in the name of refining its ad business. The goal is improved micro-targeting -- if Amazon can figure out what people are not buying on Amazon, for instance, it can serve them ads for Amazon products that they might not think to buy online. What's more, Amazon is collecting all this data in order to learn what kinds of purchases it has yet to monopolize.
More than ever, Amazon sellers are having to trust their guts when it comes to producing inventory and completing Amazon orders during the holiday season. From capitalizing on fourth quarter traffic, to making up for the pandemic-related fulfillment blockage, this year poses a whole new set of challenges for the e-commerce giants' merchants.
Livestream shopping has taken off abroad, but Amazon has struggled to replicate that success on its own platform. So the company is trying a new way to promote its Amazon Live platform: Recruit micro-influencers. The program is still small, but participants say that it has the potential to bring a more social-media-like experience to buying on Amazon.
On Thursday, after the annual two day event, Amazon reported that third-party sellers exceeded $3.5 billion in sales during the promotional event, which was 60% higher than the year before. But the company was mum about some other key details it usually divulges. Meanwhile, other retailers like Walmart and Target tried to make their own promotions to bring Prime Day traffic to their own websites. Put together, with the little data that's been released thus far, we can see that the big retail leaders are scrambling as they try to get through the fourth quarter.
With in-person sales largely out of the picture this holiday season, brands must adapt to deliver the frictionless experiences that online consumers expect and demand.
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