We’re co-hosting a webinar with Levin Consulting about opportunities and challenges facing consumer technology brands in 2021. It will be held on January 19th at 10am PT / 1pm ET.

Here are 5 reasons why you should attend!

5 Reasons to Attend our Electronics Webinar

1. Levin Consulting has 33 Years Experience in the Consumer Electronics Industry

Levin Consulting has spent the past 33 years serving consumer technology brands in the retail space. From emerging technologies to Fortune 100 giants, they’ve seen the evolution of many electronics brands and will be sharing a wealth of industry insights at the webinar.

2. Now is Peak Planning Time if You’re an Electronics Brand

With the latest technology unveiled at CES, now is the time to plan your overall strategy for both traditional and e-commerce retail so you’re ideally positioned for the year, but especially Black Friday & Cyber Monday and next holiday season. Our webinar will take an overall look at the state of the industry and provide actual takeaways you can implement into your current planning.

3. We’ll Provide Actionable Advice About Launching or Optimizing Your Brand on Amazon

One of our pet peeves are webinars that are all fluff without any actionable advice, so we will never produce a webinar like that. With our 12+ years of experience selling in Electronics on Amazon, the webinar will be jam-packed with category-specific advice such as compliance regulations, advertising nuances & strategy, and listing optimization techniques we’ve found to be successful. 

4. You’ll Gain COVID-19 Trend Insights and Explore What They Mean for 2021

The pandemic has affected every category, and consumer electronics is no exception. Levin Consulting will explore these industry trends as a whole and Kaspien will narrow in on what it means on Amazon. 

5. You’ll Get a Free Copy of our eBook, The Amazon Seller’s Guide to Electronics

We have all sorts of good things in store, and one of them is providing a free copy of our popular eBook, The Amazon Seller’s Guide to Electronics. This 28-page guide is our compilation of everything we’ve learned about selling in the electronics category on Amazon. 

Register for the Webinar

Date: January 19th at 10am PT / 1pm ET

Duration: 60 minutes

Even if you cannot attend at this time, register and we’ll send you a recording of the webinar!

Kaspien 2020 in Review

2020 has been a year like none other. As we approach its end, I want to take a moment to review all that we’ve achieved in this remarkable year. None of it would have been possible without our partners, who trusted us to get through this year together. Thank you for your partnership. Here’s to growing together in the new year! 

What We Planned 

In December 2019, I shared a blog post recapping my first 90 days at Kaspien and our vision for 2020. In that post, I outlined six goals: 

  1. Scale our platform 
  2. Grow our retail division 
  3. Grow our agency and software divisions 
  4. Increase automation and operational efficiency 
  5. Improve our customer experience 
  6. Revitalize our focus on our employees 

 

What Actually Happened 

While 2020 went in directions that we could not predict, I’m proud to say we delivered on all six fronts.  

We’ve brought more services into our platform, grown our net revenue, grown our subscriptions business, improved operational efficiencies (in large part through automation), invested in our customer experience lifecycle, and added more programs and benefits for our employees. 

In fact, even as turbulent as the year has been, we saw many successes in 2020: 

We Raised $30.2 Million 

We started our 2020 fiscal year with a bang. On February 21, 2020, we secured $25 million in new financing to expand and enhance our offerings. In April, we raised another $5.2 million in funding as our parent company, Kaspien Holdings, shifted its entire focus to ecommerce. 

  Kaspien Raises 25 million dollars

Kaspien Raises 30 million dollars

We Successfully Adapted to Remote Work 

On March 16, 2020, our corporate office shifted to working from home. Many of our employees took desktops and monitors home, but left belongings on their office desks with the expectation of being back in a few weeks. Oh, how little we knew then.  

Kaspien Office March 2020

But we adapted, quickly and efficiently. We left the office on a Friday, and by end of day Monday, we had 150 employees working from home while maintaining their duties and delivering results for our partners.  

Kaspien Work From Home

We had our share of bumps along the road, and remote work certainly came with a learning curve for us as an organization, but I am very proud of how well and how quickly our employees adapted.  

We Launched our Amazon Ad Management Software 

In late 2019, we launched our Amazon campaign management software, AdManager, in beta. In April 2020, we launched our full release.  

AdManager originated from internal needs – over our history, Kaspien has served over 4,000 brands as their ecommerce partner, which means that our advertising portfolio quickly grew. To successfully scale, we had to automate that process without sacrificing performance.  

We spent over 4 years and over 5,000 manhours developing AdManager, refining and enhancing it to better meet our internal teams needs. We built AdManager into something truly remarkable, and eventually, we realized that others might like this software too.  

We Defined a New Leadership Principle 

Even faced with a pandemic, this year saw protests across the nation drawing attention to violence and racism that still haunts our country. In late June, we added a seventh “leadership principle” to guide our company culture and vision:  

We believe in the power of diversity and teamwork. 

While Kaspien has always welcomed diversity, it was done too passively. With the addition of this leadership principle, we made attention to diversity part of our company DNA. It is shifting from a passive welcome to a conscious consideration that permeates our culture and work.   

We Rebranded from “etailz” to “Kaspien” 

On September 3, 2020, we announced our rebrand from “etailz” to “Kaspien.” Rebranding was exhilarating, full of opportunities and potential risks. We had built our reputation as etailz, but we had also outgrown the name as our company evolved to offer so many more services than just online retail. It was a risk, but one we believed worth taking.  

Three months later, I’m proud to report that our team didn’t miss a beat. Operations and business expansion continued uninterrupted, and our marketing department did a phenomenal job implementing the rebrand across all our assets in one fell swoop.  

We were Named One of the Best Places to Work 

In October 2020, we had the honor of being named as one of the best places to work in the Inland Northwest by the Journal of Business and Best Companies Group. 

This award recognizes our progress toward the sixth goal I designated at the end of 2019: renew focus on our people.  

Kaspien Work From Home

In the past year, Kaspien has instituted many new employee engagement programs, such as a Charitable Contribution and Giving Committee. This committee is focused on giving back to our Spokane community, and recently organized a diaper drive for the local Vanessa Behan Crisis Nursery after the committee became aware that the nursery was unable to host the annual diaper drive themselves due to COVID-19. 

We Beat Financial Targets 3 Quarters in a Row 

The fourth quarter of our fiscal year is still underway at the time of this post’s publication, but we’ve published our earnings for the first three quarters of FY20. In each quarter, Kaspien exceeded our target EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), testifying to our strong operating performance. 

In the third quarter, we reported a 36% in net revenue year-over-year and our Gross Merchandise Value (GMV) increased 127% year-over-year. Before that, in the second quarter, our total revenue increased 23.5% year-over-year and our GMV increased 46% year-over-year.  

We have been continually improving, and it’s showing. 

We Expanded our Offerings 

Over the course of the year, we continually expanded our offerings to include more self-service and managed service software solutionsUS Tax compliance for online sellers, and an unauthorized seller removal service. We also expanded our FBA warehouse network to include 7 facilities across the US and were among the first approved users for Walmart’s new FBA-like service, Walmart Fulfillment Services (WFS). 

What Lies Ahead in 2021 

As we’ve alluded to in our quarterly earnings reports, 2020 was all about building a strong foundation by centralizing our services into a platform. We’ve made tremendous progress on that initiative.  

As we look ahead to 2021, our focus shifts to scaling everything we’ve developed. We will expand to new markets and marketplaces, upgrade our existing software and services and release new offerings, and serve new clients. Kaspien is becoming the industry leader in Marketplace Seller Services.  

11 Strategic Themes 

Like last year, we’ve outlined our goals as a list of strategic themes we will focus on throughout the year: 

1. Centralize our Platform 
We will continue creating a centralized location for brands to access everything they need to flourish in online marketplaces, including reporting and management for sales, inventory, marketing, and more. 

2. Expand Our Platform 
We will increase the number and quality of features, products, and services in our platform, making Kaspien truly a one-stop shop. 

3. Continue Improving Tailored Offerings 
Each brand has different circumstances and different goals, so a “one size fits all” approach is simply a disservice. To be the ultimate online growth partner, we must continue to enhance our ability to tailor strategy and services for each brand.  

4. Build Upon Our Category Expertise 
As part of offering tailored solutions, we will focus on deepening our expertise in key categories so we can deliver ever greater results for our partners. Kaspien has and will continue to serve brands of every product category. We are not diminishing our breadth; we are deepening our knowledge. 

5. Expand to New Marketplaces 
Amazon is the dominant marketplace in the US, but other marketplaces offer immense potential that should not be ignored. We will continue expanding our offerings on other major marketplaces, including Walmart, Target, and many more. 

6. Expand Globally 
New marketplaces are springing up around the globe. To better meet the needs of current and future partners, we will expand our operations into additional markets to become the global leader in marketplace services. 

7. Expand through Inorganic Growth 
As we continue to scale, we will seek opportunities to grow Kaspien organically and inorganically. We will consider strategic partnerships and acquisitions that enable us to improve our existing offerings, add new offerings, and serve new audiences. 

8. Create and Enhance Automations 
We seek to empower brands through automation. By offboarding repetitive, manual tasks, we free brands to focus on more ambitious projects and strategy, without sacrificing quality. 

9. Optimize Our Value Chain 
We will continue to refine our internal structure and processes with the end goal of accelerating progress and improving outcomes for initiatives that add the greatest value for our partners.  

10. Diversify Our Value Chain 
We intend to support multiple corporate partners and tool providers on our platform, cultivating a robust ecosystem of brand services that delivers even greater value to our partners. 

11. Continue Operational Control Focus 
We’ve been EBITDA positive for the last three-quarters, which means we’re maintaining profitability and sustainability. We will continue increasing operational efficiencies across our business. 

Our goals are built around adding value for our partners. You’re the reason we come to work every day. We have seven leadership principles, and two of the most important are being partner obsessed and delivering results. 2021 will be all about continuing to uphold those principles. 

Giving Thanks to Kaspien Employees

With Thanksgiving coming up, we wanted to take a moment to give thanks to a few teams who go above and beyond for their coworkers and community. These teams make Kaspien a better place to work and Spokane a better place to live. 

Kaspien Processing Facility Donates to Spokane Organizations 

For the last several years, Kaspien’s warehouse team has been quietly making donations to local organizations in need. In just 2019, Kaspien donated over $200,000 worth of items!  

These donations are fueled by unfulfillables – products that cannot be sold on Amazon for a number of reasons, including damage, defective, or missing parts. At face value, it’s easy to think that one wouldn’t want these products, even as donations. However, our warehouse team manually reviews each unfulfillable and identifies items that are still fully functional. Some products are returned completely unopened and other items are returned as “defective” because of user error. 

Surmise it to say that the percent of unfulfillables that are still perfectly usable is higher than you’d think, and it is these types of products that our warehouse team donates.  

The warehouse team has worked consistently and quietly, without asking for recognition for their charitable work. As co-workers, community members, and in many cases, friends, we’re grateful to our warehouse team for their diligence and compassion. Their efforts make Kaspien and our Spokane community better. 

Kaspien Runs Diaper Drive for Vanessa Behan Crisis Nursery 

This year, Kaspien created the Charitable Contribution & Giving Committee, or CCGC for short. We have always valued giving back to our community, and we wanted to put some structure behind it, giving rise to the CCGC.  

Earlier this year, the CCGC met with Keith O’Brien, the Development Director at Vanessa Behan, a Spokane organization that provides free childcare, crisis counseling, and parent education for parents and children in need. Due to COVID-19, Vanessa Behan hasn’t been able to hold their annual diaper drive. After learning of this, the CCGC sprang into action and launched a Kaspien diaper drive to support Vanessa Behan. 

Virtual Scavenger Hunt Engages Employees 

The Kaspien events committee is tasked with creating fun and engaging events for our employees. With COVID-19, this task became markedly more difficult. However, they put their heads together and created a virtual scavenger hunt!  

The scavenger hunt included both indoor and outdoor activities, like taking a photo in one of Spokane’s gorgeous sunflower fields or sharing a photo of an art project made during quarantine. The scavenger hunt gave employees a chance to not only reconnect with one another, but also get outside (safely) to let their creativity flow!  

Lunch & Learns to Inform and Inspire 

For years, we’ve held monthly lunch and learns – events where internal and external speakers join us to talk about important topics or teach new skills. When we shifted to working remotely, we knew we couldn’t lose these popular eventsMore than that, we knew lunch and learns would be a great opportunity to stay connected.  

Since quarantine began, Kaspien has welcomed external speakers like James Krejci, a thought leader in Spokane, as well as focused internally, with our own CFO hosting a “Business Finance 101” lunch and learn! 

Women in Leadership Events 

About a year ago, Kaspien created a Women in Leadership group that aims to support our female employees through small group conversations and external speakers. We’ve had the pleasure of hosting Mary McDermid, volunteering together at Habitat for Humanity, and providing general support for one another. These events are a wonderful way to connect, ask questions, and have honest discourse about the impacts of gender in the workplace. 

Happy Thanksgiving! 

To our warehouse, CCGC, events committee, HR, and many other teams and individuals not mentioned above, thank you for all the work you do! This time of year leads us to reflect on all we have to be grateful for, but you work year-round to make our workplace and community a better place.  

Kaspien Inc. Is thrilled to welcome Lisa Meisenbacher as their new CTO of Software Engineering, Product Management and Data Engineering. Lisa has extensive technical executive leadership experience and brings over 20 years of experience in software development, enterprise cloud computing, SaaS architectures, and predictive analytics to Kaspien. Her breadth and depth of experience and proven leadership will help Kaspien continue to evolve as an industry-leader in marketplace retail technology.  

“I’m very pleased to have Lisa join the Kaspien team,” said Kaspien CEO Kunal Chopra. “We took the hiring process for this role very seriously, seeking someone who brought the right set of values, behaviors, and experiences to the table. It’s important that we get the right skill fit and culture fit, and Lisa does exactly that. I’m confident in her ability to help Kaspien continue to emerge as a major player in the retail technology sector.” 

Lisa is a PhD software engineer who has spent more than 20 years of her professional career in various executive level technical leadership roles of increasing responsibility in the healthcare, high-tech and financial services industries for both large and small global organizations including ADP, Siemens and Merck. Her most recent experience includes defining and executing digital strategies across industries using artificial Intelligence, predictive analytics and blockchain. In addition, she has in-depth experience modernizing and scaling large-scale, cloud-based SaaS platforms and mission critical distributed computing systems.  

Lisa will report directly to Chopra, focusing on developing Kaspien’s internal and Software as a Service (SaaS) technologies. Kaspien currently has a robust portfolio of proprietary internal software that helps with inventory forecasting, marketing automation, performance reporting, dropship optimization and supply chain management.  

Kaspien also offers a variety of SaaS products focused on marketplace retail. Most recently, the company launched an Amazon advertising SaaS game in April 2020, AdManager. Their technology portfolio also includes seller tracking and seller reimbursement software.  

“We’ve developed such incredibly useful internal software and now we’re ready to scale our SaaS offerings and share our technology with the world. Lisa will be a key player in driving this exciting initiative,” said Chopra. 

Kaspien is taking a company-wide paid holiday for Election Day on November 3rd. Voting is a critical part of our democracy, and we want to give each and every employee ample time to perform their civic duty. For those who have voted early, we are encouraging them to use this day off to help others vote, volunteer, or take a breatherElections can be stressful.  

If you have not yet voted, you can find your nearest polling place here: https://www.nass.org/can-i-vote/find-your-polling-place 

We’ll come back to work on November 4th to resume serving our partners. Until then, stay safe, and make your vote count! 

Amazon Q3 2020 Earnings Report

Today, Amazon released their Q3 earnings report. Amazon’s net sales this quarter grew 37% year-over-year, down from 40% YoY growth in Q2 but still staggering, nonetheless. Other highlights from the earnings report include: 

Overview

  • Operating cash flow for the trailing 12 months increased by ~$20 billion compared to the same period last year, up 56% to $55.3 billion 
  • Operating income nearly doubled YoY, up from $3.2 billion to $6.2 billion 
  • Amazon’s net income tripled YoY, up from $2.1 billion to $6.3 billion 
  • Amazon reports that it has created over 400,000 jobs globally in 2020 
  • Amazon Sweden launched yesterday, October 28

Segments

  • Third-party seller services grew 55% YoY 
  • First-party sales grew 38% YoY 
  • The “Other” segment, which consists largely of advertising revenue, grew 51% YoY, demonstrating that advertising revenue continues to be one of the fast growing segments
  • AWS grew 29% YoY, on par with growth in Q2 (the last two quarters are the slowest growth rate in the last 3 years) 

Other 

  • Subscription services are up 33% YoY 
  • Shipping costs are up 57% YoY 
  • Amazon’s logistics and fulfillment square footage is expected to grow 50% YoY in 2020
  • Amazon expects net sales to grow between 28% and 38% YoY in Q4 

A Record Breaking Quarter

At $6.3 billion, Amazon’s Q3 earnings shattered records, the previous record being $5.2 billion in Q2 this year. To not appear to benefit too greatly from the pandemic, Amazon has pledged another $4 billion to COVID-19 costs for the fourth quarter. It’s also worth noting that on Prime Day, which occurred in October this year, that Amazon did not appear to struggle with fulfillment. Their logistics success on Prime Day is reassuring as sellers head into the holiday season.

Amazon’s earning report covers much more, delving into Amazon’s contributions to communities, job growth, climate change, Amazon products, Prime Video, AWS, and more. As an Amazon seller/agency/software provider (we do a lot), we’re going to focus this coverage on what the report suggests for brands selling on Amazon. 

Our biggest hot take: Amazon’s feeling the heat from the antitrust investigation, and is taking time in this earnings report to try to deflect or minimize some of the allegations laid against it. 

Amazon Tries to Deflect Antitrust Concerns 

On July 29, 2020, Amazon founder and CEO Jeff Bezos testified before a congressional antitrust committee. Amazon also supplied written answers to the committee’s questions on September 4. The committee published a 450-page report on October 6 with their findings from a 16-month antitrust investigation into Amazon, Google, Facebook, and Apple.  

For those who listened to Bezos’s testimony or read the aforementioned documents, it’s easy to see that Amazon is making a defense for itself within its Q3 earnings report. We’ve broken down some of the most notable references to the antitrust concerns.  

Does Amazon Hinder S&MB Growth? 

Amazon has been accused of stymieing the growth of small and medium-sized businesses. In this earnings report, as with previous reports, Amazon points to its efforts to support small and medium-sized businesses, including: 

  • Amazon Accelerate, a program that teaches business owners best practices for selling on Amazon 
  • Ignite Digital Festival, an event for delivery service partners offering best practices and updates for logistics 
  • Stand for Handmade, a program in India that waives selling fees for local, handmade products 
  • Amazon Launchpad Innovation Grants, a program in Australia to provide grants to start-ups and S&MBs 

Amazon Takes Majority of Prime Day Sales 

During the antitrust hearing, Amazon faced questions about unfair usage of third-party data and unfair competition against third-party sellers by Amazon’s first-party retail segment. 

In their earnings report, Amazon makes a point to state that on Prime Day, third-party sales grew 60% YoY, up to $3.5 billion, “growing even more than Amazon’s retail business.”  

This note seems to be a defensive move by Amazon, as others have noted that Amazon’s firstparty sales hit an estimated $7 billion and accounted for 60% of all Prime Day sales. In year’s past, first-party sales accounted for closer to 40% of all Prime Day sales. Third-party sellers may have grown at a greater rate than Amazon’s retail segment, but Amazon took a far larger slice of the Prime Day pie this year. 

Amazon’s Efforts to Protect Brands & Consumers 

Amazon also drew attention to Project Zero, announcing that the tool is available in 17 countries around the world. Project Zero allows brands to remove alleged counterfeit sellers from their listings themselves, without going through Amazon’s approval process. The program has been historically difficult to gain access to.  

Bezos referenced Project Zero during his testimony when asked about what Amazon is doing to protect brands and consumers from counterfeit products.  Mentioning it again in the earnings report helps send the message that Amazon is continuing to expand its anti-counterfeit efforts.

Marketplace Earnings Reviews

Read our breakdowns of Amazon’s Q2 Earnings Report, Walmart’s Q2 Earnings Report, and Target’s Q2 Earnings Report.

Bezos answers congressional antitrust questions for house subcommittee on the judiciary

On July 29, 2020, Jeff Bezos testified before the US House Committee on the Judiciary. After the testimony, the committee submitted a list of additional questions for Amazon to answer in writing. The questions and answers were published on September 4th. We’ve reviewed Amazon’s responses in the Questions for the Record and identified some key takeaways for brands and third-party sellers that operate on the Amazon marketplace.  

Does Amazon Steal Third-Party Data? 

One of the most persistent lines of questioning was around Amazon’s use, or rather, alleged misuse of third-party data, including third-party seller data from the Amazon marketplace and third-party data from AWS users. Amazon has been accused of using third-party data to create copycat products and undercut its users’ prices. 

In short, Amazon openly admits to drawing on its enormous wealth of third-party data to improve its first-party offerings. However, it denies targeting any single seller because it anonymizes and aggregates data. 

Amazon responded in multiple instances that Amazon uses anonymized, aggregated data to inform its decisions, including which private label brands and products it pursues. Amazon argued that this is an ability that any retailer has, ecommerce or brick and mortar. Amazon also stated that, like any other seller, its private label developers research public-facing content on listings, such as price, reviews, rank, and features. 

Rep. Pramila Jayapal’s questions pressed Amazon to define “aggregated data” through a hypothetical: If a category consisted of one seller who accounted for 99% of sales and another seller who accounted for 1% of sales, would Amazon deem the combined data “aggregate data”? Amazon’s response that aggregate data is “data that is aggregated across multiple third-party sellers and, where available, Amazon’s first party sales,” suggested that it would. 

First-Party Share of Listings by Category

First-Party Share of Sales by Category

Amazon First Party Share of Sales by Category

 This question and Amazon’s answer are important to note for brands that release innovative products. Even if Amazon reviews data at a category level (and Amazon did not specify how deep category levels go for their product development purposes)successful products in niche categories are particularly vulnerable to copycat products based on Amazon’s aggregated data and frontend research. 

Does Amazon Unfairly Favor First-Party Products & Services? 

The Buy Box 

Chairman David Cicilline asked if Amazon considers profitability to Amazon when determining which seller wins the Buy Box. Amazon responded that profitability to Amazon is not a factor. Instead, factors such as price, delivery speed and cost, Prime eligibility, and seller performance determine Buy Box ownership. These factors are all things prioritized by Amazon first-party products. 

FBA vs Non-FBA Offers 

Cicilline also asked if Amazon favors products fulfilled through Fulfillment by Amazon (FBA) are favored over non-FBA options. As with nearly every answer, Amazon responded in a roundabout way, stating that Amazon’s data shows that customers prefer orders with FBA over non-FBA orders by 9.46%. This answer suggests that, yes, Amazon does favor FBA orders over non-FBA orders, but justifies it by claiming it provides the superior customer experience. 

However, this may change in the coming fourth quarter, as Amazon has been forced to impose inventory constraints across its fulfillment centers due to being unable to meet the surge in ecommerce purchases caused by COVID-19Since inventory space is limited and in high demand, Amazon is focusing on higher-volume, faster turning ASINs, as well as higher-profit items, to ensure that products stored in Amazon fulfillment centers (FC) are worthwhile for Amazon. 

The Amazon FC capacity constraints has driven many third-party sellers to establish hybrid fulfillment strategies for Q4, combining FBA with Fulfillment by Merchant (FBM). 

Purchases Through Alexa 

Cicilline also submitted questions about what ratio of first-party products are sold through Alexa compared to third-party productsAmazon stated that third-party sales account for 45% of sales made through Alexa in 2020, despite accounting for 58% of sales of physical products on Amazon. Amazon stated this discrepancy is due to the fact that many sales on Alexa are for consumable household items, like paper towels and diapers, and Amazon has a larger first-party presence in this category. 

Amazon also stated that only a low, single-digit percentage of customers complete the purchase of a product suggested by Alexa on Alexa. The clause “on Alexa” is worth noting, as it implies that the conversion rate for Alexa-recommended products could be higher if one tracked sales made on other devicesWhen Alexa recommends a product, shoppers may look it up on their phone to view pictures and read reviews, then purchase from their phone. Such conversions would not be counted in the low, single-digit conversion rate provided by Amazon. 

Does Amazon Do Enough to Protect Brands & Consumers? 

Project Zero Allows Brands to Remove Counterfeits 

Representative Henry Johnson, Jr.’s line of inquiry focused on brand protection services available to sellers on Amazon, and by extension, consumers who shop on Amazon. His first line of questioning focused on Project Zero, an Amazon program that gives brands the power to take down counterfeit listings themselves. 

According to Amazon, to be eligible for Project Zero, a brand must have a registered trademark, an Amazon account with access to Brand Registry, and have maintained an accuracy rate of higher than 90% for all notices of infringement submitted to Amazon in the prior six months. Requiring a high rate of accuracy for notices of infringement is critical to protecting honest sellers from abusive removals. 

Amazon stated that currently, 10,000 brands are enrolled in Project Zero. When challenged why brands should have to police Amazon’s marketplace for it through Project Zero, Amazon stated that their automated brand protections proactively remove more than 100 items suspected of infringement for every 1 item that a brand owner manually removes.  

IP Accelerator Expedites Trademark Registration 

Responding to questions about protecting intellectual property rights (IPR), Amazon brought attention to its IP Accelerator program, which connects brands with a curated network of trusted IP-focused law firms to help with trademark registration. According to Amazon, this program has connected over 1,500 brands to the network, and over 500 brands have received “accelerated protection” on Amazon. 

Accuracy of Seller Contact Information 

As of September 1, 2020, Amazon requires all sellers to list their contact information on their public-facing Amazon seller profile page. Representative Johnson, Jr. asked Amazon how they plan to ensure that the seller information is accurate.  

Amazon responded that they combine computer and human resources to validate seller contact information. However, many of their efforts seem to occur when a new account is created, so it is unclear how effective Amazon’s systems will be at retroactively identifying inaccurate information in existing seller accounts. 

Does Amazon Knowingly Permit the Sale of Counterfeits? 

Despite a plethora of anecdotes from consumers and brands about a pervasive counterfeit problem existing on Amazon and the Department of Homeland Security’s report from January 2020, Amazon continues to deny that counterfeit products are prevalent on the Amazon marketplace.  

Amazon claims that 99.9% of all products viewed by customers on Amazon do not have a valid counterfeit complaint, although Amazon did not state how it determines which complaints are valid.  

CJ Rosenbaum, founding partner of Amazon Sellers Lawyer, also cast further doubt on the sincerity of Amazon’s claim that it proactively fights the sale of counterfeit product on its marketplace. In an interview with Kaspien’s CEO and Director of Compliance, Rosenbaum shared that his firm recently represented a vendor who knowingly sold counterfeit product to Amazon Retail (first-party or 1P), and that Amazon Retail: 

  • Knew the product was counterfeit and bought it anyways, then sold it to consumers 
  • Simultaneously had an existing partnership with the competing authentic brand 
  • Stopped paying the vendor when the vendor’s account was accused of counterfeit, while continuing to sell the counterfeit product to consumers, resulting in maximum profits  
  • Instructed the vendor to create a new vendor account so that Amazon Retail could place another purchase order, then repeated the whole process several times before the vendor took Amazon to court 

The below video starts at the segment where Rosenbaum shares the story.

The frankly shocking allegations can be listened to in full, here. 

Other Notable Lines of Inquiry 

Because we are an ecommerce services provider with a large portion of our business and expertise focused on the Amazon marketplace, our review focused on key takeaways for brands and third-party sellers that operate on the Amazon marketplace. However, the committee’s questions delved into much more, including: 

  • Whether Amazon is seeking access to content rights for content available on HBO Max, Hulu, Disney+, or Netflix as part of its negotiations around Fire TV 
  • Whether Amazon’s initial and ongoing response to COVID-19 has been sufficient 
  • Allegations of wrongful terminations 
  • Amazon’s plans for the upcoming pilot commercial ecommerce program organized by the General Services Administration (GSA) (the program will essentially offer a marketplace specifically for federal employees) 

The Future of Amazon 

While Amazon is under fire from Congress for monopolizing the ecommerce space and stealing third-party data to usurp its customers, Amazon hasn’t broken its stride. Q3 is looking to be another strong quarter, with North American retail revenue forecasted to grow 30% year-over-year (YOY), compared to 21% YOY growth in Q3 2019. Likewise, Amazon’s advertising revenue is expected to grow 37% YOY in Q3, compared to 41% in the previous quarter.  

Predictions for the Amazon Marketplace, Near and Far 

  • Amazon will continue enhancing advertising services on and off its platform to further realize revenue from this rapidly growing segment. 
  • Amazon will continue expanding its brand protection services, including paid brand protection services, as pressure mounts from Congress and upcoming competitors, like Walmart and Target. 
  • Amazon will retain many of the inventory policies for its fulfillment centers that it put into place during the pandemic. Permitting only faster-turning products to be stored in Amazon fulfillment centers increases Amazon’s profits, and the baseline for consumer demand in ecommerce has been permanently raised as the result of COVID-19. As a result, Amazon can afford to impose stricter conditions. 
  • Amazon first-party sales share will continue to reduce, as Amazon enjoys better profits and less risk through seller fees and having third-party sellers carry inventory risk. Pointing to the shrinking share of first-party goods, even as total revenue grows, also helps Amazon argue against calls for trust busting. 
  • If other online marketplaces can rise to compete with Amazon, as Walmart has been making strides towards with the launch of Walmart Fulfillment Services and Walmart+, calls for trust busting may dissipate. As such, Amazon may limit competitive efforts to stymie their growth too much, so it can point to competition as antitrust pressure mounts.  
  • Though countries such as India have forbidden the marketplace owner from also being a seller, it is unlikely that the US will institute such a policy given that Amazon, Walmart, Target, and others all act as first-party sellers alongside third-party sellers on their marketplaces.  

On September 8th, Amazon announced updates to its communications policyThe update clarifies what buyer-selling communication is permitted by Amazon’s policies, something that was previously ambiguous at best. The update is intended to reduce the number and improve the quality of emails Amazon shoppers receive in the interest of improving the Amazon buying experience. 

Biggest Takeaways: 

  • Sellers can ask buyers for product reviews and/or seller feedback (although you still cannot ask for a positive review, only an honest review) 
  • Amazon clarified what message types, content, and formatting are not permitted 
  • The policy update applies to all Amazon marketplaces 
  • The updated policies go into effect on November 3, 2020 

Communications Updates 

Permitted Buyer-Seller Communications 

Sellers are permitted to communicate with buyers for the following three reasons: 

  1. If an order cannot be shipped or if it will be delayed. This must be communicated via Seller Central using the Manage Orders feature. 
  2. If additional information is needed to complete a return or if the seller is offering a partial refund. This must be communicated via Seller Central using the Manage Orders feature. 
  3. Communicate with buyers proactively (communication initiated by the seller instead of the buyer) to: 
    1. Resolve an order fulfillment issue  
    2. Request additional information required to complete the order 
    3. Ask a return-related question 
    4. Send an invoice 
    5. Request product review and/or seller feedback 
    6. Schedule the delivery of a heavy or bulky item 
    7. Schedule a Home Services appointment 
    8. Verify a custom design 
    9. Any other reason where the contact is required for the buyer to receive their purchase 

 

Proactive messages may be sent using email, Amazon’s templates in Seller Central, third-party applications, or via API. These messages must be sent within 30 days of order completion, include the 17-digit order ID, and be in the buyer’s preferred language. Amazon retains the authority to modify subject lines as it deems necessary.  

Learn more about how customer reviews impact Amazon sales or how to generate new customer reviews compliantly. 

Forbidden Message Types 

Amazon’s policy update states that sellers may not send the following message types to buyers: 

  1. Order or shipping confirmations 
  2. Messages that say only “Thank you” or that you are here to help if buyers have any problems  
  3. Marketing or promotional messaging, including coupons  
  4. Language that either incentivizes or persuades the buyer to submit positive product reviews or seller feedback, including by offering compensation, money, gift cards, free or discounted products, refunds, rebates or reimbursements, or future benefits  
  5. Language that requests removal or an update of an existing product review  
  6. Language that requests a product review only if they have had a positive experience with the product 
  7. A repeat request (per order) for a product review or seller feedback 

 

Forbidden Message Features 

Seller-buyer communications must not contain any of the following: 

  1. External links unless they are secure working links (https, not http) necessary for order completion or links to Amazon  
  2. Attachments except for product instructions, warranty information, or invoices  
  3. Logos, if they contain or display a link to your website  
  4. Link to opt-out of messaging  
  5. Sensitive content in images or text (e.g. bare skin, violence/gore, adult/offensive language)  
  6. Tracking pixels or images  
  7. Email addresses or telephone numbers  
  8. Images of purchased products as Amazon includes those on your behalf  
  9. Images that do not relate to your brand or company 

 

Forbidden Message Styling 

Likewise, the policy update also forbids seller communications from containing any of the following: 

  1. Accessibility issues as specified in the Web Content Accessibility Guidelines from the Web Accessibility Initiative  
  2. Emojis  
  3. GIFs  
  4. Message margins over 20% max width  
  5. Image or graphic sizes larger than 80% max width  
  6. Overrides of Amazon’s default line height, font family, or font color  
  7. Fonts in more than three sizes  
  8. Message bodies that are centered or that otherwise override default text alignment settings  
  9. More than two line-breaks (spacing between paragraphs) in a row  
  10. Unsecure images (http instead of https)  
  11. Spelling errors or grammar issues 

 

Compliance Required by November 3, 2020 

Sellers that fail to comply with Amazon’s updated guidelines by November 3rd may face temporary restrictions in proactive seller-buyer communication or a suspension of their seller account. 

etailz rebrands to Kaspien

Today, we’re thrilled to announce that we have rebranded from “etailz” to “Kaspien. Our parent company, Trans World Entertainment, has also rebranded to Kaspien Holdings, consolidating the two brands into Kaspien.  

Even more important than streamlining the corporate structure, this rebrand also reflects the next era of our journey. Our company has been evolving ever since our founding in 2008. We grew from a niche third-party seller of eco-friendly products into a top FBA retailer, created proprietary software for our internal teams that are now SaaS products, and launched an agency division to manage brands’ marketplace channelsWe were creating fantastic tools but realized that we were limiting their potential and efficacy by only leveraging them for internal needs.   

When Kunal Chopra joined the company as our new CEO in September 2019, he brought a new vision, one that harnessed all the different components we had built, expanded them, and brought them together in a unified, cohesive system. 

Guided by a strong executive team, we underwent a metamorphosis, evolving from a top Amazon third-party retailer to a robust platform of ecommerce services and software. Through the platform model, we now provide leading services, software, and strategy for all aspects of an online business, regardless of what, where, or how a brand chooses to sell.  

Why is etailz Rebranding?  

In short, we outgrew our old name. 

“Kaspien is in a different place in the market than we were 1 year ago, much less 10 years ago,” said CEO Kunal Chopra. Today, there are thousands of third-party sellers, agencies, and software providers offering brand services for online marketplaces. It’s a fragmented market. As etailz, we were one of those fragments. As Kaspien, we are defragmenting the market, pulling together all the services, tools, data, and integrations brands need to succeed on ecommerce under one roofWe’re a onestop shop. 

“By defragmenting the market, we enable brands to grow and evolve without having to change systems. Through Kaspienbrands can continue building upon the same strong foundation of insights, results, products, services, and committed relationships no matter how their ecommerce needs change, Chopra said. 

etailz’s name was synonymous with third-party retail, and after 12 years of experience, weve become exceptionally effective at it. Our success was built upon our software and strategies, and these tools have now become the core of our platform as we know it today. While we’re still a third-party retailer, it’s only one of many parts. As Kaspien, everything we’ve developed to drive our past success is now available in flexible models to suit your business’s needs.  

Listen to our CEO, VP of HR, and Creative Director discuss our rebrand to Kaspien on our podcast 

 

What does Kaspien Mean? 

The Name 

The name “Kaspien was inspired by the Caspian Sea, the largest inland sea in the world. Like many waterways, ita hub of commerce. There is also debate whether it’s a lake or a sea; it’s more than it appears to be, and so are we.  

Unlike a traditional retailer, we operate in three sectors – as a retailer, agency, and a software provider – and we wanted a name that can grow with us in the future. Kaspien does this. 

The Logo 

The logo utilizes an abstract ‘K’ as a graphic element. The negative space subtly incorporates a forward pointing arrowrepresenting forward thinking, innovation, and leadership – traits that etailz was founded upon and Kaspien will continue to embodyThe hexagon behind the ‘K’ is inspired by patterns prevalent in nature due to the hexagon’s efficiency, from bees’ honeycombs to the Giant’s Causeway. Our value proposition is rooted in maximizing efficiency, and Kaspien’s logo is an homage to this. 

The Future of Kaspien 

We’re as committed as ever to being “partner obsessed” and providing the best possible service for our partners. That mission and promise will never change. 

We’ll continue expanding our services and software through internal development, integrations, and partnerships, unlocking greater efficiencies and performance. It’s an exciting time at Kaspien, and our partners will reap the benefits. 

We’re thankful for all that we have learned over the last 12 years and to the etailz name for getting us here. Now, we’re excited for our bright future – together – as Kaspien. 

 

On August 4th, Amazon published a press release announcing the impending launch of Amazon Sweden. On August 11th, Amazon sent an email to sellers with more details about what to expect with the new marketplace.  

In this email to sellers, Amazon stated that Amazon Sweden will be available within EU Seller Central accounts as Seller Central Sweden. All Professional Selling fees and referrals fees will stay the same with this expansion.  

The email also outlined how products currently in Amazon’s European Seller Central will synchronize to Seller Central Sweden. Amazon has created the Build International Listings (BIL) tool to automate and accelerate this process. If a seller does not wish to have his or her listings synchronized, they must override it manually. Amazon notes that products subject to the Swedish Chemical Tax will be excluded. 

It is uncertain when Amazon Sweden will launch. In January of this year, Amazon sent a similar announcement for Amazon Netherlands, which was publicly launched in March. If Amazon maintains a similar timeline for Sweden, we could see the marketplace publicly launch in October, though an official date has not yet been released. In the meantime, Amazon asks sellers to go into their EU Seller Central account and check to ensure all of their product listings are synchronized accurately. 

If you’re interested in expanding your brand to Sweden, we can provide a full suite of Amazon services for marketing, brand protection, logistics, and more. 

Amazon’s Email Announcement to Sellers 

“Dear Selling Partner, 
 
We are pleased to announce that we have started the work to launch the Swedish Amazon.se Store, to delight local customers and give Selling Partners the opportunity to expand their European business even further.

Seller Central Sweden will soon be available to you as a seventh country option in your EU Seller account. With the same monthly Professional Selling fees and referral fees, you can access all seven European Amazon Stores.

To support you with the expansion of your business, we will synchronize your eligible product selection with your Seller Central account for Amazon.se. You will be notified via email once Seller Central Sweden is available and the synchronization is complete. You can then revise your synchronized selection.

How will we synchronize the existing product selection: 

  • We will enable the Build International Listings (BIL) tool in Seller Central, which allows us to list your eligible existing products from your Home Marketplace on Amazon.se on your behalf, to save you valuable time. You can edit the BIL connection between the Seller Central accounts of your choice afterwards at any time here by clicking “remove connection”. 
  • Please note: When the BIL tool is active, it will regularly synchronize your existing listings and prices for all linked Seller Central accounts. Please check your preferred tool settings here after the synchronization is complete.  
  • The product descriptions will automatically be translated to Swedish, using BIL’s Machine Translation functionality. 

Learn more about BIL and its functionalities here 

What product selection will be synchronized? 

  • We will synchronize your eligible selection which is currently exportable to Sweden and prices that are active on Amazon.co.uk and Amazon.de. For your self-fulfilled listings, we will synchronize your prices from your BIL source marketplace, adjusted for exchange rate* to Swedish Krona. 
  • For your Fulfilment by Amazon (FBA) Pan-European FBA (Pan-EU) listings, we will take into account:  
  • VAT differences between BIL source marketplace and Sweden. Example: If you are selling a product on Amazon.de for 10.00€, we will synchronize the product price on Amazon.se as SEK 114.5, taking the VAT differences in Germany (16%) and Sweden (25%) into account. 
  • Fulfilment fee differences between your BIL source marketplace and Sweden. 
  • You will be able to benefit from the Fulfilment by Amazon (FBA) and Pan-European FBA (Pan-EU) programs with domestic fees and offer your products to local customers. You can find the promotional fees that are valid until June 31st, 2021 here. 
     
    *The BIL tool adjusts prices periodically to reflect currency conversion fluctuations in the target marketplaces’ currencies. The frequency of these updates might vary from daily to weekly. These updates will not show changes of less than 1%.

Please note: If you are selling Consumer Electronics, we will not synchronize products that will become subject to the Swedish Chemical Tax that is expected to become effective in Sweden from 1st of October, 2020. We will provide you with more information in the upcoming weeks. Please reach out to your tax adviser for additional information.

What you need to do: 

  • In the next few weeks, we will notify you via email once the product synchronization is complete. Check here under Account Notifications, if your email address for important Technical Notifications and Business Updates is still up to date. 
  • Check your synchronized listings and prices under Manage Inventory in Seller Central.  
  • If you are already using the Build International Listings (BIL) tool, you can edit the connection between the Amazon Stores of your choice and prevent product listings from synchronizing here at any time. If you wish to opt-out from selling on Amazon.se, click here to “remove connection”. 
  • If you are not using the BIL tool yet, we will activate it on your behalf to synchronize your selection to Amazon.se. You can edit and remove the BIL connection here afterwards. 
  • Once Amazon.se launches, your listings will become available to our local customers from the start of the new Amazon Store.”

Target Earnings Q2 2020

Target released their earnings report today for the threemonth period ended August 1, 2020. Comparing Q2 2019 to Q2 2020, this quarter was a resounding success for Target. Notable highlights include:  

  • Second quarter sales grew 24.3% year-over-year (YoY), the highest Target has ever reported, with digital sales contributing 13.4 percentage points and store sales contributing 10.9 percentage points 
  • Digital sales grew 195% YoY  
  • 17.2% of total sales from the second quarter originated online 
  • Total revenue grew 24.7% YoY, from $18.4B to $23B 
  • Operating income grew 73.8% YoY 
  • Same-day services for Q2 grew 273% YoY 
  • Target gained $5B in market share in the first six months of 2020, exceeding gains made in all of 2019 

Target’s Q2 earnings snapshot also notes that more than 90% of second quarter sales involved stores in some manner, whether it be in-store shopping, pick-up, or delivery through Shipt. 

Key Takeaways for Online Sellers 

In February, eMarketer forecasted that Target would finally break into the top 10 US ecommerce retailers, capturing 1.2% of total retail ecommerce sales in the USEMarketer also predicted that Target’s ecommerce business will grow to $8.34 billion. Target’s second quarter earnings report supports this prediction.  

In the six months preceding August 1, 2020, digital accounted for 16.3% of Target’s sales. In that same period, Target reported $42 billion in sales, which indicates that they’re nearing $7 billion sales generated through ecommerce.  

This is impressive growth, but still trails Walmart, which generated roughly $5.5 billion from ecommerce in Q2 alone, and Amazon, which grew North American net sales to $55 billion in Q2. Brands interested in growing their online business should continue to focus on Amazon and Walmart’s online marketplace, but Target is clearly one to watch. 

Read our breakdowns of Amazon’s Q2 Earnings Report and Walmart’s Q2 Earnings Report. 

Walmart earnings report Q2 2020

Today, Walmart released their earnings report for the 13-week period ended July 31, 2020Notable highlights from the release include:  

  • Net sales in the US were up 9.3% year-over-year (YoY) to $93.3B 
  • Total revenue was up $7.4B YoY to $137.7B 
  • Walmart US ecommerce sales increased 97% YoY 
  • Walmart US ecommerce sales accounted for approximately 6% of Q2 net sales, around $5.5B
  • Sam’s Club ecommerce sales grew 39% YoY 
  • International net sales were down 6.8% YoY 
  • Ecommerce sales accounted for 12% of total international sales 
  • Walmart incurred $1.5B in COVID-related costs 

Global Ecommerce Growth 

As a company that operates in the ecommerce space, we took particular note of Walmart’s online sales performance. Just this year, Walmart has announced Walmart Fulfillment Services, an integration with Shopify, and Walmart Plus – all indicators of Walmart’s growing ambition for their ecommerce presence. As COVID-19 impacted shopping in physical stores, Walmart’s online sales growth boomed around the globe. 

Walmart Marketplace Ecommerce Net Sales: 

  • US: +97% 
  • Mexico & Central America: +217% 
  • China: +104% 
  • Canada: +215% 
  • United Kingdom: +98% 

Online grocery sales were a significant contributor to online sales growth in each of the below markets. Pickup and delivery services experienced record-high sales, with approximately 3,450 stores allowing pickup and approximately 2,730 stores offering same-day delivery. 

Key Takeaways for Sellers 

Walmart’s online marketplace has been building momentum since it launched, but it’s rapidly gaining speed in 2020. We saw with Amazon that brands who entered the marketplace early were positioned to seize and grow a greater market share. As Walmart’s online marketplace matures, a similar outcome is likely.  

In addition to general ecommerce growth, the current health crisis has also led to a surge in online grocery shopping. This is a fascinating space that’s likely to continue growing even after shopping in physical stores normalized again. You can learn more about the rapid rise of online grocery in our podcast episode with Chicory, a digital shopper marketing platform that specializes in the grocery industry. 

Read our breakdowns of Amazon’s Q2 Earnings Report and Target’s Q2 Earnings Report.

Want to learn about selling on Walmart.com? Check out our free eBook!

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WFS: Walmart’s Gamble to Challenge Amazon FBA