Welcome to this week’s edition of the Amazon News Digest. There’s a lot to cover this week, so I’m categorizing the news into 3 categories: General, Seller Central, and Vendor Central.
You can also listen to an audio version of today’s newsletter if you prefer to download and listen on your commute instead. Access audio edition here.
General News
Amazon trims portfolio of private label fashion brands
Another data point to support the argument that Amazon’s private label brands are not necessarily the death knell for national brands -
Marketplace Pulse reports that 32 Amazon private label brands have been axed from the site.
The issue is primarily limited exposure on the platform - these unknown brands have the same limited equity as any other fly-by-night unknown brands. As the article says, “They [private label brands] are left competing with the rest of unknown brands mostly on price, although they are rarely the most affordable."
What this means for brands:
Although there are over 400 private label or exclusive brands on Amazon, many are not legitimate competitors to national brands that have a strong connection with their customer. National and independent brands invest in R&D, product design, listening to customers, and building a brand presence outside the Amazon platform. Amazon’s brands are always just following what successful national/independent brands are doing. Keep up the good fight and continue investing in your relationship with customers.
Amazon launches new private label alcohol brand in UK
What does this mean for brands:
Amazon continues expanding its PL portfolio into new categories.
Unlikely to happen in the US. Alcohol distribution rules vary significantly by State, making sales on a national platform like Amazon.com almost impossible.
Its not you, its me (your product category)
Interesting insights from this chart I found on Reddit which shows the average rating (out of 5) of the top 100 sellers in each of the major departments on Amazon. The data was scraped from Amazon's pages using Python & Selenium, but I can’t verify this. What it means for brands: when validating whether the average rating of your products is “good” or “bad”, consider the average performance of your category. You might operate in a category where average ratings are higher or lower relative to other categories.
Seller Central News
Reminder: November 5 is the deadline for Black Friday and Cyber Monday inventory for FBA.
New: add videos to Sponsored Brand placements
Amazon launched a beta version of ‘Video in Search’ this week. Brand-registered sellers who are invited to the Beta can now show a video in a Sponsored Brand placement instead of the normal ASIN listing. These ads currently only show on mobile, not desktop.
What this means for brands:
This is a very exciting development that underscores Amazon’s strong video thesis. If you’re not already developing video content for your products, its time to start making that investment.
New beta program: North America Remote Fulfillment
Still in invite-only beta, this program allows FBA sellers to expand to the Canada and Mexico markets without any supply chain investment. It’s like Amazon’s ‘Pan European Fulfillment’ option in Europe - inventory is housed centrally in USA fulfillment centers, and Amazon will shift your inventory around at its own expense.
What this means for brands: a way to expand to these markets at basically zero cost - yes please! The same downsides exist as in the EU program however: lack of control over the depth and breadth of your catalog offered in those markets. It’s also still in closed beta, and seemingly available only to high-volume sellers.
“Enhance listings” tool spotted in SC
It’s easy to miss all the meta-data fields that Amazon suggests you add for every ASIN in your catalog. This new tool identifies all ASINs with missing back-end data and allows you to easily edit. If you have a large catalog, it might more sense to make these changes with a bulk flat file upload (see article in our Knowledge Base about bulk files).
“In-Stock Head Start” program doesn’t consistently deliver
Covered in a recent weekly digest, this program is supposed to help with shopper buying ability on ASINs that are en-route to Amazon FCs. But the Bobsled team has found that some clients have product showing as unavailable despite having inbound inventory on a partner carrier. We reached out to Amazon support and they responded with - "Note: To protect the customer experience, Amazon may not make all of your out-of-stock ASINs available for customers to find and buy before the items reach the fulfillment center, if we are not confident that the shipment will arrive on time and contain the expected number of items."
What this means for brands: We can’t rely too much on this program as a silver bullet for out-of-stock issues just yet.
Vendor News
Low PO volume reported ahead of peak holiday season
Vendors have reported unusually slow PO volume in October. The spectre of out-of-stock issues is exacerbated by the upcoming shopping holidays. Some vendors say that even when they have had Deals approved, it has not triggered POs that will cover the expected sales volume. Low PO volume has been seen across all our Vendor clients at Bobsled this week. Our thoughts on possible causes: technical issues with the PO system; storage issues at warehouses; and a final more conspiracy theory is that Amazon wants vendors to panic and use the ‘Born to Run’ program. This way, Amazon would hold vendors responsible for the Q4 inventory and if there's overage in units sent, vendors either need to pay 100% of the product cost to return overage units, plus standard shipping and handling fees OR they can have Amazon keep the inventory with a retention fee equal to 25% of the cost of the unsold units.
What to do: if you’re impacted by unusually low POs, raise the issue with your VM and continue to push, advising that you’ve heard from other vendors that they are having the same issue. Make sure you know what you’re getting yourself into with the Born To Run program as well - don’t over-commit to sales volume as this could prove costly.
What else we’re reading (and writing)
Earlier this month, Amazon posted a blog explaining its position on controversial issues facing the company, such as corporate tax and counterfeiting. Very interesting reading - and I will certainly be dissecting the Counterfeiting piece line-by-line soon - there’s a lot of subtext here. “We created this page to provide customers, investors, policymakers, employees, and others our views on certain issues,” - Noticeably absent from this list of stakeholders, and in the issues selected for discussion, is any mention of brand partners. We are on our own.
The latest Ecommerce Braintrust podcast episode is all about Amazon Attribution. If you’re running advertising on off-Amazon channels, this is an essential program to utilize.
Shopify continues to try and out-do Amazon, by being exactly what Amazon isn’t. Their philosophy of empowering brands to connect with customers is an interesting foil to Amazon’s “your customer is our customer” approach.
With this week's news of out-of-date products being sold on Amazon, consumers might be thinking twice about their purchases on Amazon, but the brands that sell on the platform are also increasingly concerned with the recurring theme of brand safety. In a piece for Forbes this week I cover what does Amazon today that creates serious heartburn for brands, and why its important for Amazon to address the underlying trust issues for the future of the marketplace.