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. 

Originally published in the Forbes Technology Council. Read the article here.

Despite its incredible growth and undeniable popularity with consumers, I’ve noticed that some brands are hesitant or even outright opposed to the idea of selling their products on Amazon. With major brands like Birkenstocks and Nike having pulled their products off Amazon, these brand owners have reason to feel even more justified in their feelings.

Truth be told, there are likely good reasons for Nike and Birkenstocks to have withdrawn from Amazon, but these brands are the exception to the norm (not to mention the fact that they already had established large and loyal followings before joining Amazon). However, in my experience as a general manager at Amazon and now CEO of a company that helps brands sell online, the overwhelming majority of brands I’ve worked with have seen tremendous benefits from expanding their brand onto Amazon.

So, today, I’m sharing a list of reasons your brand probably should begin selling on Amazon, even if you’re not over the moon about it.

1. If You Don’t, Someone Else Will

Let’s start with the risks of not taking your brand to Amazon. Amazon is an ungated marketplace, which means nearly anyone can create a seller account and begin selling products on the platform. Between retail arbitrage, counterfeits and unauthorized sellers acquiring inventory, your products are likely to end up on Amazon, even if you don’t take them there.

By taking your brand to Amazon yourself, you retain control of your brand’s representation on the largest online marketplace in the world. That’s power you don’t want to relinquish.

2. Shoppers Are Already On Amazon

After that first point, it may feel like you’re being held hostage by Amazon’s ubiquity. To a degree, you are. But Amazon is so much more than that, and it would be a disservice to your brand to not recognize the enormous opportunity Amazon represents.

Now more than ever, consumers are using online marketplaces to purchase essential and discretionary goods. By the end of 2019, Amazon had over 112 million Prime members in the U.S.and over 150 million Prime members globally. By selling on Amazon, you tap into a massive and growing audience, increasing revenue and expanding your customer base.

3. Amazon Is Expected To Remain The E-Commerce Market Share Leader

That growth is expected to continue in 2020, even with the current pandemic. Although Walmart is making strong efforts to capture ecommerce market share, Amazon is indisputably the dominant market share leader. Even during this pandemic, Amazon is expected to not only retain its market share, but actually grow it by another 1%. If you want to expand your brand online, Amazon is the place to do it, and that’s unlikely to change any time soon.

4. Amazon Is Improving Brand Protection Services

Perhaps you’ve resisted selling on Amazon because you’re concerned about retaining brand control after joining the platform. Amazon has earned a reputation for not penalizing unauthorized sellers in the past, but that’s been gradually changing. In recent years, Amazon has introduced several programs designed to help brand owners and their registered agents maintain control, including Brand Registry, Brand Gating, the Transparency Program and Project Zero.

Amazon is also facing increased external pressure to address the issue of counterfeiters on its platform. The department of Homeland Security released a counterfeit report that advised the government to take action against counterfeits appearing on e-commerce platforms that threaten the health and safety of consumers and harm the economy. This report contributed to the progress of the SHOP SAFE Act, which, if passed, could hold online marketplaces responsible for counterfeits sold on its platform.

In short, Amazon is and will continue to improve services for brand control as external pressure mounts.

5. Diversification Makes You Resilient

If all of the above failed to convince you, then consider this final point: eMarketer recently revised its forecast for retail and e-commerce growth in 2020, with consumer spend in e-commerce expected to grow 18%, while spend in brick-and-mortar stores is expected to decrease 14%. The revised forecast indicates that Covid-19 has accelerated the long-anticipated uptick in e-commerce spending as more consumers turn to online shopping.

The change in consumer spend patterns also means that brands that sell in both brick-and-mortar stores and online have been better positioned to weather the economic hardship. Diversification of assets is a tried-and-true means to protect investments, and retail is no different. Expanding to other sales channels can help brands endure unexpected headwinds. Even if you don’t want to list your entire catalog on Amazon at the start, establishing at least some small foothold on the marketplace will keep the door open, should you ever need it in an emergency.

The Benefits Of Starting Late

While in many ways starting earlier is more advantageous, joining Amazon for the first time at this stage does have some benefits. Amazon offers more and better marketing and brand protection tools than ever before, and you have more ways to launch on the channel (1P, 3P, direct to consumer or with an agency). Even now, Amazon is still growing. There’s a lot of competition, but the opportunity for growth remains as high as ever.

Amazon's second quarter earnings soar in 2020

Amazon Revenue Soars in Second Quarter

Today, Amazon published their earnings report for the second quarter of 2020. Their earnings exceeded expectations, with Amazon reporting a revenue of $88.91B and a net sales increase of 40% compared to Q2 in 2019. Other notable results include: 

  • Net income increased to $5.2B, doubling their net income from the second quarter of 2019 
  • North American net sales were up 43% YoY, while international sales were up 38% YoY 
  • Amazon’s “Other” category (which consists mostly of Amazon advertising) grew revenue 41% 
  • AWS grew 29%, the lowest growth rate since Q1 2017 
  • Operating cash flow increased 42% YoY  
  • Free cash flow increased from $25B to $31.9B YoY 
  • Operating income increased from $3.1B in Q2 2019 to $5.8B in Q2 2020 
  • Third-party sales growth outpaced first-party sales growth 
  • Grocery delivery capacity grew by over 160% and online grocery sales tripled, YoY 

Amazon’s guidance for Q3 anticipates slightly more modest growth, with net sales expected to increase between 24% and 33% YoY. 

Amazon’s COVID-19 Efforts 

In Q1, Amazon promised to spend $4B on COVID-related costs during Q2. In Amazon’s earnings report, CEO Jeff Bezos stated, “As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand.”  

Bezos added that since March, Amazon has created over 175,000 jobs, 125,000 of which are planned to transition to full-time positions. 

Amazon promised to invest an additional $2B in COVID-19 related costs during Q3. As noted by Venture BeatAmazon does not wish to appear to benefit too much from the pandemic, even as their $5.2B quarterly profit marks the highest on record in their 26year history. 

Key Takeaways from Q2 for Sellers 

By looking at where Amazon is experiencing the most consistent, strongest growth rates, we can see where Amazon is likely to continue investing in the future. This report marks yet another strong quarter for third-party seller growth and Amazon advertising.  

Third-party seller sales yet again grew faster than Amazon’s first-party sales, indicating that Amazon is continuing to embrace the third-party approach to the marketplace. This makes sense, as holding inventory carries greater risks. By expanding the third-party network, Amazon reduces its inventory risk while still generating more revenue in the form of fees.  

Those fees include advertising. Amazon’s “other” category by and large consists of their advertising business. Revenue grew 41%, making it yet again one of their fastest growing segments. It’s likely that Amazon will continue expanding their offerings and capabilities for their ad platform, making it an even more appealing tool for brands selling on its platform. 

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

Jeff Bezos Testified Before Congress 

Amazon’s Q2 earnings report comes one day after Jeff Bezos testified before the US House Committee on the Judiciary. Amazon, along with Facebook, Google, and Apple, were brought before the Subcommittee on Antitrust, Commercial, and Administrative Law to answer questions for an antitrust case.  

It did not appear to go well. Members of congress grilled Bezos about Amazon’s alleged practice of using third-party data to create copycat products, then undercut the brands selling on its platform. The same accusation was made regarding AWS, with members asking about allegations that Amazon stole third-party data to create competitor products, as well as identify and then target competitors’ customers.  

Congress members also pressed Bezos to explain why sellers bear the burden and costs of combating counterfeiters instead of Amazon, implying that Amazon has taken too passive a role because Amazon still profits from sales even if the products are counterfeits.  

Bezos’s answers seemed unsatisfactory for committee members. In many cases, he stated he could not remember the details or was unaware of the alleged events.  

Mr. Cicilline shared the following story from an apparel company that compared Amazon’s first-party division, Amazon Retail, to a drug dealer: 

“Amazon strings you along for a while because it feels so good to get that paycheck every week. And in the past, for a lack of a better term, we called it, ‘Amazon heroine’ because you just kept going, you had to get your next fix, your next check. And at the end of the day, you find out that this person, who was seemingly benefiting you, making you feel good, was just ultimately going to be your downfall.” 

Bezos responded by saying that he “completely disagrees with that characterization.” However, the anecdote rang true for third-party retailers. It is not a rare occurrence for a brand to seek out partnering with trusted third-party retailers after having a similar adverse experience selling through Amazon Retail.  

What the Antitrust Hearing Means for Brands on Amazon 

The antitrust hearing could be a huge win for brands selling online. If Amazon is indeed exploiting brands selling on its platform through copycat tactics, actions taken as a result of this hearing could put a stop to it. Likewise, if the burden of combating counterfeiters is placed on Amazon, brands may not have to bear the costs.  

Unfortunately, both of the above are big “ifs” and will take months or years to be acted upon. As Amazon’s Q2 earnings report shows, Amazon is and will remain the dominant marketplace in US ecommerce for the foreseeable future 

Start Selling on Amazon

Brands that wish to sell online will need an Amazon strategy if they wish to grow their online sales. If you’re wary of doing that, work with an experienced Amazon retailer like Kaspien who already has the infrastructure and safeguards in place to protect your brand.  

If your business is not selling on Amazon yet, read this article on why your brand should probably be selling on Amazon, even if you don’t want to be on Amazon

Map of US and Importance of Dynamic Fulfillment Network

With the unexpected onset of COVID-19, many brands and manufacturers faced a production standstill ranging from weeks to months, jeopardizing and even killing their businesses. The coronavirus restricted supply chains, exposed structural fragility, and revealed a severe lack of emergency resources. In short, many companies just weren’t prepared. Even now, many states are not yet back to business-as-usual.

The impact on supply chains and fulfillment was one of the most pervasive and damaging effects inflicted on businesses. To safeguard against this in the future, brands and sellers alike have been exploring new fulfillment options.

At Kaspien, we’ve spent the last 12 years working with brands of every level, size, location, and structure as a third-party retailer. During that time, we’ve created a robust fulfillment network. From a small processing area in the back of our corporate office to now utilizing 7 fulfillment centers across the United States, we’ve built an efficient and resilient fulfillment network that has protected our partners’ businesses.

In this post, we’ll outline some of the key benefits of and advice for expanding your fulfillment network.

3 Benefits of a Dynamic Fulfillment Network

1) Mitigates Geographic Risks

If we’ve learned anything over the past few years, it’s that the world is unpredictable. Our partners are in every corner of the country, and as such, there are many different environmental and situational obstacles that can impact product fulfillment.

Whether it’s wildfires, hurricanes, or a pandemic, any business is subject to interruption when catastrophes arise. The West Coast Port Strikes of 2015 was one of those situations for us; we didn’t see it coming, and the sudden inability to process imported goods through west coast ports certainly impacted our normal business functions, and many of our partners faced similar issues. Lead times lengthened and we faced out of stocks.

The port strikes showed us that we needed fulfillment centers on the east coast in order to protect our and our partners’ businesses. Now that we have fulfillment and processing centers around the country, including both coasts, we can minimize the impact of geographically constrained events.

2) Lead Time and Freight Cost Improvements

Many manufacturers are facing tighter margins these days, as well as an added sense of urgency to have shipments turned around to Amazon quickly. By diversifying and growing our fulfillment network, we’ve seen a favorable upswing in lead time and freight cost.

According to Kaspien’s Strategic Warehouse Director, Jeff Bernatz, “In 2020, we’ve seen a ~20% decrease in overall turnaround time at our warehouses, directly tied to the increase in available locations and available staff to handle the workload.”

We work with many manufacturers who do not have the capacity or expertise to complete product preparation in compliance with Amazon’s fulfillment center requirements. For them, shipping to one of our processing facilities is essential, and that could translate to longer lead times and higher shipping costs. But, because we have a large fulfillment network, there’s always a processing facility close by, no matter where our partners are shipping from in the US. As a result, our partners pay a lower freight cost and shorter lead times since they’re shipping shorter distances.

For brands seeking to partner with retailers and/or logistics providers, always ask about their fulfillment network. A larger network will position you to get better margins and run a more efficient sales channel.

3) Handle Higher Volumes and Scale

A large fulfillment channel always enables us and our partners to scale faster, pushing more products at a higher rate. “Since expanding to 7+ warehouses, total unit volume through our warehouses has increased ~15% vs the same time YTD period in 2019,” said Bernatz.

More locations and a higher staffing capacity have allowed us to process more orders in less time. With this added capacity, we have room to expand into previously infeasible programs, such as direct to consumer fulfillment, distribution, etc. It also eliminates the backlog we can sometimes see during peak sales seasons, such as Q4 and summer.

The Benefits will Outlast COVID-19

For many companies, this pandemic has highlighted the extraordinary value of a diversified fulfillment channel. However, all the aforementioned benefits of a large fulfillment network will continue even after the pandemic ends. Though the coronavirus may have prompted you to explore new fulfillment options, it’s worth continuing that research so you can position your brand to weather future storms and continuing growing.

We’re always happy to share our learnings from the past 12 years. If you want to learn more or discuss a partnership, get in touch through our contact form or schedule a call with one of our ecommerce experts.

Walmart announces Walmart Plus to Compete with Amazon Prime

Updated 9/1/2020: Walmart officially announced that Walmart Plus will become available to all members on September 15th.

What is Walmart+ (Walmart Plus)? 

Walmart will be launching a new service in July called Walmart+, according to Recode. Walmart+ is a subscription-based service that will provide members access to unlimited same-day delivery for eligible items, discounts at Walmart gas stations, and early access to Walmart deals.  

Walmart+ is set to launch in July for $98/year, roughly $20 less than Amazon PrimeThe service is meant to rival Amazon Prime as Walmart continues expanding its ecommerce operations. Walmart has yet to clarify whether the service will launch nationally or in select regions to start. According to Recode, a Walmart+-branded credit card will also be introduced after launch. 

Walmart Plus vs Amazon Prime

What Does Walmart+ Signify? 

Walmart+ is the latest move in Walmart’s efforts to challenge Amazon for market share in online retail. Earlier this year, Walmart announced Walmart Fulfillment Services (WFS), a Walmart owned and operated fulfillment network for goods sold on Walmart.com. Walmart Fulfillment Services offers many of the same benefits as Fulfillment by Amazon (FBA). 

Walmart Fulfillment Service Benefits 

  • 100% nationwide coverage 
  • Increased product visibility  
  • Significant sales lift  
  • Fast & affordable fulfillment 
  • Free & easy returns, including in-store returns 
  • Consistent storage rates 

Download our free eBook all about Walmart Fulfillment Services. 

Walmart+ and Walmart Fulfillment Services make it clear that Walmart is taking advantage of Amazon’s successes and failures. They can see which services have proved most useful for online sellers and shoppers, and they are actively working to create comparable services for their own platform.  

How Will This Affect Shoppers and Sellers? 

Shoppers and sellers alike will benefit from the competition between Amazon and Walmart. Amazon Prime was largely unchallenged in the online marketplace space. With the introduction of Walmart+, the two services will vie for sellers’ and customers’ patronage, resulting in better features and deals. 

How does Walmart.com Compare to Amazon? 

Walmart has made excellent progress this year on their ecommerce platform. Along with Walmart Fulfillment Services and Walmart+, Walmart also offers brands better protection from counterfeiters and unauthorized sellers than Amazon.  

Walmart is a gated marketplace, meaning that sellers must be approved before they can sell on the platform. Amazon, on the other hand, is an ungated marketplace, so anyone can create a seller account and begin selling. Amazon’s approach contributed to its staggering growth, but it also made it vulnerable to exploitation. Counterfeiters and rogue sellers have long plagued brands on the Amazon platform, and the problem has even received attention from the Department of Homeland Security 

Walmart also has the upper hand in the online grocery business. Walmart+ will offer benefits for grocery purchases as well, helping defend Walmart’s position as Amazon works to take control of the grocery sector. 

Despite their progress, Walmart still has a lot of catching up to do. Walmart’s paid marketing services do not yet offer the same control as Amazon’s, resulting in lower ROI, nor do they offer the same breadth of services. 

Sell on Walmart Sooner Rather Than Later 

As Walmart continues building out its ecommerce platform, they are improving their ability to pull market share from Amazon. In their earnings report, Walmart shared that their ecommerce sales are up 37% year over year (partly due to the coronavirus). 

 Walmart is learning from Amazon’s history; brands should too. Establishing an early foothold on the ecommerce platform will position brands for long-term success. 

Kaspien is a preferred solutions provider for the Walmart marketplace. If you’d like to discuss expanding your brand onto Walmart, reach out through our contact form 

Amazon Upgrades US Seller Profiles

On July 8th, Amazon Services notified sellers in the US that, effective September 1st, 2020, Amazon will display a seller’s business name and address on their Amazon.com “Seller Profile page. For individuals, Amazon will display the individual name and address.  

This change will help eliminate seller anonymity on Amazon’s US marketplace, bringing it into alignment with their European, Japan, and Mexico marketplaces.  

Amazon US and UK Seller profile comparison

In their notice, Amazon Services states, “[…] We are making this change to ensure that there is a consistent baseline of seller information to help customers make informed shopping decisions.” You can read the full notice from Amazon at the bottom of this post. 

Why Does This Amazon Update Matter? 

This update will increase transparency on the Amazon platform. Though Amazon has not stated as much, they may be making this change as a result of the Department of Homeland Security’s counterfeit report, which was published in January 2020. The report exposed the full scale of the counterfeit problem on Amazon, stating, “global employment losses due to counterfeit goods were between 2 million and 2.6 million jobs in 2013, with job displacement expected to double by 2022.”  

Among the many recommendations in the report was a call to publicly display seller identities, which would make it easier for consumers and businesses to file legal action in the event of a counterfeit, IPR infringement, or other violation. 

Kaspien’s Compliance Manager, Jed Nelsen, commented, “Amazon is making a big step forward in transparency. This update will make it easier for brands to track down the 3rd party sellers who are selling their products.” 

How Will This Affect Shoppers and Sellers? 

The anonymity update is unlikely to significantly impact online shoppers, as few take the time to research the seller they’re patronizing.  

Sellers, on the other hand, are much more likely to take advantage of the update. As mentioned above, access to more business information will make it easier for brands and sellers to take action against counterfeits and cases of IPR infringement.  

As Marketplace Pulse notessellers can fake business details to circumnavigate Amazon’s enforcement, so the update will not eliminate Amazon’s issues. But it’s a step in the right direction to protect consumers and businesses in the US. 

What Steps Do Amazon Sellers Need to Take? 

Sellers do not need to take any action, unless they’d like to update view and update their contact information. Amazon Services provided directions on how to do so in their notice: 

  1. Log into your Amazon seller account. 
  2. In the “Settings” menu at the top right corner of Seller Central, click “Account Info” to view your “Seller Account Information” page. 
  3. In the “Business Information” section, click the links for the information you want to view. 
  4. To change your business name, click “Display Name” and to change the address, click “Business Address”. Enter the new information or edit the current information. 
  5. Once completed, click “Submit” to save. 

 

Read the Full Notice from Amazon 

Dear Seller 

Beginning on September 1, 2020, we will display a seller’s business name and address on their Amazon.com “Seller Profile” page. For individuals, we will display the individual name and address. This is consistent with “Seller Profile” pages across the Amazon stores in Europe, Japan, and Mexico. 

Why are we making this change? 

Over the years, we have developed many ways for sellers to share more about their business, including through features like the “Seller Profile” page, “Store” pages for brand owners, and Handmade “Maker Profile” pages. These features help customers learn more about the businesses of a seller and the products they are selling. We are making this change to ensure that there is a consistent baseline of seller information to help customers make informed shopping decisions. 

Can I share more information to help customers beyond my business name and address? 

Yes, you are welcome to add additional information about your business and products that you think would be helpful to customers. However, remember that you should not include an email address in order to prevent spam and abuse. We ask customers and sellers to use our Buyer-Seller Messaging system to communicate electronically. 

How do I ensure that my information is up to date? 

You can view and update your contact information by following the steps below: 

  1. Log into your Amazon seller account. 
  2. In the “Settings” menu at the top right corner of Seller Central, click “Account Info” to view your “Seller Account Information” page. 
  3. In the “Business Information” section, click the links for the information you want to view. 
  4. To change your business name, click “Display Name” and to change the address, click “Business Address”. Enter the new information or edit the current information. 
  5. Once completed, click “Submit” to save. 

 

Regards, 
Amazon Services 

 

Listen to the podcast episode: 

 

The Difference Between First-Party and Third-Party Sellers 

If you’ve thought about selling online, you’ve probably heard of firstparty (1P) solutions offered by top marketplaces, like Amazon and Walmart. But what does that mean exactly 

First-party simply means that the owner of the marketplace platform also has a retail entity that partners with brands and represents their products. For example, Amazon has a retail division called Amazon Retail, though in the Amazon community, it’s frequently just called “1P.” Amazon Retail buys inventory from manufacturers and distributors at wholesale cost, then sells the product on Amazon.com. They also offer additional services to their brands for online protection and digital marketing. Walmart also has a retail division that functions much the same. 

What, then, is a third-party seller, or 3P? A third-party seller functions similarly to a first-party seller, however, they do not own the platform on which they are retailing, hence the “third-party” name. A third-party seller can be a dedicated retailer, as is often the case, or it can be the brand itself, if the brand chooses to sell their products without assistance from another entity.  

On Amazon, third-party sellers began as a minority, but now account for more than half of the sales made on Amazon. To compete with 1P, many 3P sellers have expanded or enhanced their services to make a 3P partnership more enticing than a 1P partnership.   

How to Decide if 1P or 3P on Amazon is Better for You 

Iyou’re a brand trying to decide whether to partner with 1P or 3P, look at the data. Where do you believe the market is going? At Kaspienwe look at this kind of market data quite frequently. For us, one of the most interesting pieces of data is how sales volume is oriented on Amazon. 2018 was the first time that third-party seller volumes surpassed Amazon volumes on the Amazon marketplaceIn Amazon’s latest earnings report, they reported that 53% of overall gross merchandise value (GMV) was from third-party sellersCompared to previous years, GMV has grown from 30% to 50%.  

Based on this data, we can infer thaAmazon wants their growth to focus on their 3P businessThat leads to the ever-important question: Why would Amazon favor 3P growth over 1P when they operate their 1P business? The truth is surprisingly straightforward: Ultimately, having other sellers on their platform provides a better economic outcome for Amazon because they avoid inventory risk while still profiting from commissions and marketing fees. 

Another key consideration when comparing 1P and 3P is service offerings and performance. What sort of capabilities and expertise do these providers offer to meet your brand’s needs? Do they have a proven track record of success? Are they helping you grow or just maintaining the status quo? Maximizing success depends on finding a partner who can not only provide for your current needs, but also provide new opportunities for growth. 

One of the most important services, especially for larger, more established brands is control. Amazon has spent the last year under intense scrutiny due to rampant counterfeits and illegitimate sellers who threaten consumers and businesses, and this lack of control has made some major brands sever ties with Amazon. For example, Nike announced they are pulling off the Amazon platform because they don’t feel they have the control or creative freedom they want in their 1P partnership with Amazon 

Icontrol of your branding, control of pricing, control of consistency, and control of messaging are important to your brand, then you’ll likely be more satisfied by working with a third-party seller. 

If you’re interested in comparing the costs associated with 1P versus 3P, check out our whitepaper, The Costs of Amazon. It compares expenses for 1P, 3P, and direct-to-consumer options. 

The Future of Third-Party and First-Party Solutions on Amazon 

Judging by historical trends, we will continue to see third-party volumes grow at a higher rate compared to Amazon Retail (1P)As previously described, this is partly due to the economics being more favorable for Amazon when more sales come from third-party sellers, presuming of course that those third-party sellers are reputable and don’t harm Amazon’s reputation with consumers.  

However, it’s unlikely that Amazon Retail will ever completely disappear because some top tier brands are more comfortable working directly with Amazon. Amazon has also been alleged to require top tier brands to work with 1P if they want to list their products on Amazon. Amazon would do this because, in the case of global brands, they may make more revenue through the 1P model than 3P.  

How Does 1P and 3P Apply to Other Marketplaces, like Walmart.com or eBay? 

We’ve compared 1P and 3P for Amazon, but how do they apply to other major online marketplaces, like Walmart and eBay?  

It comes back to consistency and control. When brands work with 3P seller, they can have a single entity manage all of their channels in unison, ensuring that pricing, content, and marketing are consistent. This provides a clean and positive customer experience, while also mitigating the risks of competing marketplaces rolling up the Buy Box because of pricing inconsistencies across marketplaces. If brands partner with 1P for each marketplace, establishing that same consistency will be very difficult and require more active monitoring and communication on the brand’s part. Kaspien offers services for third-party retail, direct selling supported by an agency, and direct selling independently supported by self-service software.

If you’d like to learn more about any of these services, reach out through our contact form. 

100 terms every Amazon seller should know

Selling and marketing on Amazon involves dozens of moving pieces. To help with this problem, we’ve compiled a list of 100 terms every Amazon seller should know, including terms related to digital marketing, logistics, finances, and the fundamentals. For ease of use, the terms are listed in alphabetical order. 

Also check out our list of 20 Terms Every Walmart Seller Should Know.

1. A9 Algorithm: Amazon’s proprietary search engine algorithm for determining search results on Amazon.com. 

2. A/B Testing (Split Testing or Bucket Testing): An online marketing strategy used to see which of two versions of marketing collateral yields the best results. The difference between the two versions is typically limited to a single element, such as the subject line of an email, so that testers can confidently attribute differences in performance to the changed element.  

3. Ad Management Software: Software used to streamline management of Amazon ads, typically by improving data visibility, the user interface, and automation. In the case of Amazon, most ad management software is for pay-per-click (PPC) ad types, such as Sponsored Product Ads. 
Learn More >

4. Advertising Cost of Sale (ACoS): The cost of ad divided by the sale. For example, if a product costs $10 and it takes $1 worth of ad spend to generate a sale, the ACoS would be $1 divided by $10, or 10%. ACoS is often used to assess the efficiency of advertising campaigns on Amazon. 

5. Amazon A+ Content: An extra feature for product detail pages available to brands that are enrolled in Amazon Brand Registry. This feature allows brands to add additional copy and images below the bullet points in a product detail page. Amazon claims they increase conversion rates by up to 10%.  
Learn More >

6. Amazon Ad Groups: On Amazon, Ad Groups are a subsection within a sponsored ads campaign that contain ads, targets, and a default bid. Ad Groups can contain a single ad or multiple ads grouped by like products, brands, or campaign goals. Targets can be either keywords, ASINs, or categories. Ad Groups are available for Sponsored Product and Sponsored Display campaigns. 

7. Amazon Attribution: An Amazon service that allows sellers to measure the impact of different sales channels, such as email, video ads, and display ads, by creating unique URLs that enable attribution tracking. The Attribution dashboard in Seller Central allows users to see conversion metrics, such as “page views, “add to cart, and “purchases. 
Learn More >

8. Amazon Best DealsOne of several types of promotions that sellers can run on Amazon where a product is offered with a 15% discount over a 2-week period. During the deal, the product is featured on the Today’s Deals page. The product must have an average rating of at least 3.5 stars and selling price of at least $10. 
Learn More >

9. Amazon Brand Gating: An invite-only Amazon program that allows manufacturers and private label sellers to control who can resell their products. This program helps prevent unauthorized third-party sellers from listing products. 
Learn More > 

10. Amazon Brand Registry: An Amazon program that enables brands to gain additional protections and access to additional marketing services. Enrollment in Brand Registry is free, but requires a trademark registration number. Brand Registry provides access to Amazon’s infringement reporting tool, brand stores, A+ Content, Sponsored Display Ads, Sponsored Brand Videos, and more. 
Learn More > 

11. Amazon Brand Store: curated digital storefront on Amazon where brands can list their entire Amazon catalog in a convenient and branded experience. This feature is available only to brands enrolled in Amazon Brand Registry.
Learn More >

12. Amazon Buy Box: The top right section on the product page where consumers can add items to their carts. The Buy Box is awarded by Amazon to sellers based on product price, availability, seller performance, and whether the product is offered with FBA or Prime shipping.
Learn More >

13. Amazon CouponsAdvertisers can enroll up to 50 ASINs into a single coupon and offer either a dollar amount or percentage off. The coupon cost to the advertiser will equal the discount + $0.60, both of which are subtracted from the coupon budget. Each coupon must have a minimum of $100 for the budget, however, advertisers will be charged only for redeemed coupons. 
Learn More >

14. Amazon Damage Allowance: To cover the cost of handling and disposal of damages, Amazon charges vendors a damage allowance. Vendors can choose not to agree to this damage allowance, but they then must fund the cost of returning the item themselves. 

15. Amazon Early Reviewer Program: The Early Reviewer Program is an Amazon-run initiative that can generate up to five new reviews on a selected product. Amazon randomly contacts verified buyers of an enrolled product and offers the customer an incentive to leave a review within the specified offer period. Amazon offers the buyer a small Amazon account credit (typically $1-$3) that can be used on future Amazon purchases. To qualify for the program, products must have a price point of at least $15 and fewer than five reviews. The product can remain in the program up to one year or until it receives five new reviews, whichever comes first. 
Learn More >

16. Amazon Enhanced Brand Content: A feature offered to Amazon’s vendors and Brand Registered brands that allows them to add additional information to their product detail page. This extra real estate appears below the bullet points on a product detail page. 
Learn More >

17. Amazon Headline Search Ads: Renamed to Sponsored Brand Ads, this ad type displays a banner ad at the top of the search results page. The banner ad contains a brand image and features up to three products. This ad type is typically best suited for generating brand awareness. 
Learn More >

18. Amazon Lightning DealsDeals that run for several hours on and appear on the Today’s Deal page. This deal type offers a limited quantity of units determined by the seller. To be eligible, the brand must have a proven track record of selling well, a minimum 20% discount off the lowest price in the trailing 30 day price or lowest price YTD (whichever is lowest), sales history, and a 3star rating or higher. 
Learn More >

19. Amazon Live: Through Amazons app, Amazon Live Creator, sellers can broadcast livestreams where they demonstrate products usage, features, and benefitsFeatured products appear directly below the live broadcast.
Learn More >

20. Amazon MarketingMarketing services that are available on the Amazon platform, including Sponsored Product Ads, Sponsored Brand Ads, Sponsored Display Ads, Sponsored Brand Videos, Amazon Coupons, Deals, Amazon Live, Amazon Posts, DSP, Brand Stores, A+ Content, and more. Amazon continuously adds and retires marketing services. 
Learn More >

21. Amazon Product Categories: Amazon groups products by specific categories and has different selling requirements for each. These requirements can include additional fees, performance checks, and other qualifications. An example of a product category is “Apparel, which includes Outerwear, Athletic Wear, Innerwear, Belts, and Wallets. 

22. Amazon Prime Exclusive Discounts: A price discount exclusively for Amazon Prime members. Products with Prime Discounts display strike-through pricing. To be eligible for this promotion, a product must be Nationally Prime Shipping Eligible, have a rating of 3.5 stars or above or no reviews, offer 20% off current price, the discount must beat the lowest price offered for the ASIN in past 30 Days by 5%, and the seller must have at least a 4-star seller rating. 

23. Amazon Seller Central: An Amazon platform used by Amazon sellers to market and sell products to Amazon customers.  

24. Amazon Sponsored Brand Ads: Formerly called Headline Search Ads, this ad type displays a banner ad at the top of the search results page. The banner ad contains a brand image and features up to three products. This ad type is typically best suited for generating brand awareness. 
Learn More >

25. Amazon Sponsored Brand Videos: An Amazon ad type that displays a video on the Amazon home page and in the search results. The videos display on mobile and desktop. Amazon recommends including subtitles in the video. 
Learn More >

26. Amazon Sponsored Display Ads: Pay-per-click (PPC) ads on Amazon and Amazon-owned websites and apps that target shoppers by searches, views, purchases, or products. 
Learn More >

27. Amazon Sponsored Product Ads: Pay-per-click (PPC) ads that appear in strategic areas on Amazon, such as the top of the search results page and within a product detail page. These ads give brands products more visibility and increase the likelihood of purchase by consumers.
Learn More >

28. Amazon Spotlight Deals: Deals that run for 24 hours on the Amazon Today’s Deals page or until stock runs out. These Deals are subject to minimum revenue and units sold thresholds. Criteria for Spotlight Deals include whether the item is Top Selling Product, the lowest price trailing 365 days, and a 4-star rating. 

29. Amazon Standard Identification Numbers (ASINs): A unique alphanumeric code for a product listed on Amazon. The ASIN can typically be found in the URL of an Amazon product detail page and in the further details section of the product detail page. 

30. Amazon Vendor Central: The Amazon platform used by manufacturers and distributors to sell product directly to Amazon’s first-party (1P) retail division, Amazon Retail. 
Learn More >

31. Amazon Vine: An invite-only program for Amazon customers who regularly leave reviews marked helpful by other customers. These customers are deemed trusted reviewers and gain access to free products, for which they provide customer reviews. These reviews are identifiable by a green stripe and labelled with Amazon Vine Program. 

32. Amazon Web Services (AWS): Amazons cloud computing platform that offers services such as infrastructure as a service (IaaS), platform as a service (PaaS), and packaged software as a service (SaaS). AWS also offers solutions for database storage, compute power tools, and content delivery services. 

33. AutomatiCampaignsA campaign type within Sponsored Products in which the advertiser sets a default bid at the Ad Group level and Amazon places ads automatically for customer search queries it deems to be relevant. These are commonly used to find new keywords that Amazon’s algorithm views as relevant for the products being advertised. 

34. Average Order Value: The average amount a customer spends at a digital storefront in a single order. You calculate this by dividing sales revenue by the number of orders taken. 

35. Average Time on Site: The average amount of time a visitor spends on a website. Usually defined within a specific timeframe. 

36. Bid: The maximum amount an advertiser is willing to pay in order to get an ad to place for a specific search term. 

37. Bid OptimizationThe act of adjusting the bid for keywords in Amazon ad campaigns in order to improve performance. Bids may either be increased because ads are not competitive enough for important keywords, or they be can be decreased because ads are utilizing budget too quickly. 
Learn More >

38. Brand Awareness: The degree of consumer recognition of a brand based on the brands copy, colors, logo, products, qualities, and style. 

39. Business to Business (B2B): A transaction in which a business sells products or services to other businesses. 

40. Business to Consumer (B2C): A transaction in which a business sells products or services to an end consumer. 

41. Call to Action (CTA): The action that marketing materials are trying to encourage the audience to take, such as “subscribe,” “add to cart,” or “sign up.” 

42. Certified Service Providers (CSP): A person or organization that is certified under the Streamlined Sales and Use Tax Agreement to perform sellers sales and use tax duties (excluding the obligation to remit tax on its own purchases).  
Learn More >

43. Chargebacks: When a customer contacts their bank about a charge they don’t recognize or dispute, rather than contacting Amazon or the seller about the issue. 

44. Click-ThroughRate (CTR): The percentage of visitors on a page who first view then click on an advertisement. 

45. CopywritingThe writing of marketing, advertising, and promotional materials. 
Learn More >

46. Conversion Rate: The percentage of visitors to a page who take a desired action, usually in the form of purchases.  

47. Cost of Labor: The sum of employee wages that have been paid. This also includes employee benefits and payroll taxes.  

48. Cost-per-ClickA method of billing determined by the number of times a visitor clicks on an advertisement. This is Amazon advertising’s primary billing model. 

49. Demand Side Platform (DSP): Amazon’s advertising platform that enables advertisers to use Amazon’s consumer data to target shoppers on Amazon and Amazon-owned websites and apps with display and video ads. 
Learn More >

50. Dropshipping: A method of retail fulfillment where the seller does not keep product in stock. Instead, the seller waits until a consumer purchases the product online, then the seller buys the product from the manufacturer and has the product shipped directly from the manufacturer to the consumer. This method is often used for products not eligible for preferred fulfillment methods, like FBA. 
Learn More >

51. Discount Code (Coupon Code or Promo Code): A code that shoppers use during checkout to redeem special offers or discounts. 

52. First-Party Seller: A seller who owns the marketplace upon which they sell. Amazon Retail, for example, is the one and only first-party seller on Amazon.com.  
Learn More >

53. Fulfillment by Amazon (FBA): An Amazon service in which third-party vendors keep their product at an Amazon fulfillment center. Amazon will pick, sort, pack, ship, track, and handle shipping, returns, and refunds of these products for a fee. 

54. Fulfillment by Amazon (FBA) Fees: A fee charged by Amazon for each unit processed through FBA. The fee is based on the product’s size and weight. 

55. Fulfillment by Amazon (FBA) Storage Fees: A fee charged by Amazon for your inventory that occupies space in an Amazon Fulfillment Center. This fee is based on the daily average volume (in cubic feet). 

56. Fulfilled by Merchant (FBM): A fulfillment method where the seller manages and controls their handling and shipping process, as opposed to Amazon or a third-party logistics provider 

57. Fulfillment Centers: A physical location where third-party logistics (3PL) providers, like Amazon Fulfillment, fulfill customer orders for online sales. 

58. Gross Margin: The revenue a business retains after subtracting costs, calculated by subtracting cost of goods sold from net sales revenue. The higher the gross margin, the more working capital a company has.  

59. High-Converting KeywordsKeywords in a pay-per-click (PPC) advertising campaign that drive high conversion rates. Identifying these keywords and adding them to sponsored ad campaigns is an essential part of optimizing an ad campaign. 

60. Influencer MarketingThe promotion and selling of products or services by having people with social influence and followings promote the product on their social media accounts. 
Learn More >

61. Invoice: An itemized record of a transaction between a seller and a buyer. 

62. Key Performance Indicators (KPIs): Metrics that are actively tracked in order to gauge a company’s long-term overall performance. These are usually set to compare the company’s performance to other companies within the same sector and to previous years’ performances. 

63. KeywordsWords or phrases that shoppers frequently use when searching for a given product. Including keywords in the copy on the product detail page or in Amazon sponsored ad campaigns helps products place higher in the search results and drive more traffic to listings. 

64. Landing Page: A webpage created solely for an advertising campaign. It is where visitors “land” after clicking on an ad or a link. 

65. Listing OptimizationThe process of revising the copy and images on a product detail page in order to improve organic placement in the search results and conversion rates. This process often includes adding keywords to the listing title and bullet points, revising copy to improve readability and highlight key features, and including images that demonstrate product use, features, and benefits. 
Learn More >

66. Low-Converting Keywords: Keywords that drive particularly low conversion rates within a pay-per-click (PPC) advertising campaign. Identifying and negating these keywords is an essential step in improving the efficiency and performance of a sponsored ad campaign. 

67. Minimum Advertising Price (MAP)The minimum price for which sellers can advertise a product, typically issued by the manufacturer. 

68. Minimum Order Quantity (MOQ): The minimum number of products or units that a supplier will produce at one time. This number helps ensure that the supplier is producing enough products or units to drive a profit after the costs of production. 

69. Marketing Campaign Management: The planning, executing, tracking, and analysis of marketing campaigns from the beginning to the end. 
Learn More >

70. Marketing Co-opAn agreement between a manufacturer and a seller where the manufacturer pays for a portion or the entirety of paid marketing efforts for their product. 

71. Marketplace Facilitator: Businesses or organizations that arrange with third parties to sell products and services on its platform. Through this they can facilitate retail sales. 
Learn More >

72. Marketplace Facilitator Laws: Legislation around sales tax responsibilities of Marketplace Facilitators. 
Learn More >

73. Manufacturing Cost: The cost of materials and production borne by the manufacturer. 

74. Media GalleryThe section at the top of an Amazon product detail page containing images and videos. 
Learn More >

75. Net Profit Margin: The percentage of revenue that a company retains as profit after subtracting all costs. 

76. Net-TermsThe amount of time that passes between a seller acquiring inventory from a manufacturer and the seller paying the manufacturer for that inventory. This delayed payment enables sellers to generate revenue to help pay for the purchase order.  

77. Paid SocialPaid targeted advertisements run on social media platforms, such as Facebook and Instagram. 
Learn More >

78. Pay-per-Click (PPC): type of digital marketing in which marketers pay a specific amount each time their ads are clicked. This model is used in most types of Amazon ads. 

79. Purchase Order (PO): The order a retailer places with a vendor to acquire product. This includes the quantity of product ordered and the price paid for it. 

80. Product DescriptionA section near the bottom of the Amazon product detail page where additional product information can be shared. 

81. Product Detail Page: Also called a “listing,” the page featuring a specific product that includes a title, bullet points, product description, media gallery, enhanced brand content, and customer reviews. 
Learn More >

82. Product Profit Margin: The difference between how much the product sells for and the actual cost of the product itself. This is sometimes referred to as a “markup. 

83. Product Rank: A product’s rank compared to other products in each category as determined by Amazon’s algorithm. A lower rank is better, indicating higher customer reviews, more traffic, more sales, and better organic placement on the search results page. 

84. Production Costs: The cost for manufacturing products or services. These can include labor, raw materials, supplies, delivery costs, and general overhead. 

85. Retail Arbitrage: The practice of buying products from distributors, wholesalers, retailers, and so on, then reselling those products at higher price. The resale usually takes place online. 
Learn More >

86. Retail Price: The price of product when sold to an end consumer. 

87. Return On Advertising Spend (ROAS): A measurement of the effectiveness of a digital advertising campaign. Very similar to ROI, this metric is specifically for paid advertising campaigns and helps online business determine best methods and improvements for future digital advertising campaigns. 

88. Return-On-Investment (ROI): A comparison of the amount invested to the amount generated by that investment. ROI is frequently used when measuring the value of paid marketing in generating overall revenue. To calculate ROI, divide the amount generated by the cost of the investment.  
89. Sales Tax: A tax on a sale, transfer, or exchange of a product or service. Usually this tax is applied to the end consumer and not the seller. 

90. Search Engine Optimization (SEO)The science of making web pages more attractive to search engines by implementing highly searched keywords in a page’s frontend content and meta content, optimizing content length, and more. On Amazon, SEO typically involves implementing keywords into product detail pages to improve their organic placement on the search results page. 
Learn More >

91. Search Engine Results Page (SERP): The page that is generated from a system after the user inputs their query. An example of SERP would be the Google results page. 

92. Seller AgreementA contract signed by businesses that sell on Amazon wherein they agree to comply with all of Amazon’s policies.

93. Social Media MarketingA type of marketing conducted on social media platforms such as Facebook, Instagram, Twitter, LinkedIn, Pinterest, Snapchat, and more. This marketing typically seeks to connect brands with their target audience, build brand name recognition and loyalty, increase sales, and drive website traffic. Social Media Marketing often involves content creation, engagement with followers, analysis, and running paid social media advertisements.  
Learn More >

94. South Dakota v. Wayfair, Inc.A landmark supreme court decision that holds sellers responsible for collecting and remitting sales tax in any state where they surpass a certain sales threshold, even if the business lacks a physical presence in the state. 
Learn More >

95. ThirdParty Seller(s): An independent company that sells products on a marketplace they do not own, such as Amazon. Third-party sellers are common on Amazon, accounting for over 50% of all sales on Amazon.com. 
Learn More >

96. Third-Party Logistics Providers: business that provides services for inventory management, distribution, warehouse storage, product preparation, labelling, and fulfillment for other companies. 
Learn More >

97. Today’s Deals: A page on Amazon that features products currently running Deal of the Day, Lightning Deals, or Best Deals. This is the second most visited page on Amazon. 
Learn More >

98. Use Tax: A tax on a storage, use, or consumption of a product or service which has not had sales tax applied to it. 

99. Vendor Fees: A fee collected by vendors to cover the cost of processing sales taxes and transferring them to state and local governments. 
Learn More >

100. Wholesale Costs: The price of products purchased in bulk from the manufacturer, as opposed to the retail price, which is an increased price charged to end consumers commonly used by retailers/resellers. 

Amazon Q1 Earnings Report Indicates Positive Outlook for Brands Selling on Platform

Amazon recently published its Q1 2020 Earnings Report. The report posted positive results for Q1, with the anticipation of high expenses in Q2 as Amazon responds to COVID-19 impact 

KEY TAKEAWAYS FROM AMAZON’S Q1 EARNINGS REPORT 

  • Amazon saw strong YoY sales growth, coming in at 26% growth in Q1 net sales. This growth comes in the face of COVID-19, and may be partly attributed to the stimulus checks.  
  • However, Amazon’s profits were down YoY, with operating income reported at $4B compared to $4.4B last year. 
  • North America and AWS segment saw strong performances, while the International segment saw a loss of $398M, compared to a loss of $90M in Q1 2019. 
  • Third-party sellers drove $14.5B in profits in Q1, compared to $11.1B in Q1 2019. 
  • The ‘Other’ segment, which consists mostly of advertising revenue, saw 44% growth comparing Q1 2020 to Q1 2019. 
  • Amazon anticipates spending approximately $4B in Q2 for COVID-related expenses, which places its operating income at risk of reporting a $1.5B loss in Q2. 

Read Kaspien’s Assessment of Amazon’s Q4 2019 Earnings Report. 

WHAT DOES THIS MEAN FOR BRANDS SELLING ON AMAZON? 

Amazon’s results in Q1 would surely have been stronger if the coronavirus had not hampered the global economy; however, the results are still positive, indicating that Amazon will remain a key component of any successful online strategy.  

However, while Amazon managed to push through strong results in Q1, the journey was not entirely smooth. Brands were repeatedly, and often adversely, impacted by Amazon’s unilateral decisions as it struggled to respond to COVID-19‘s impact on its operations. 

Amazon Restricted Shipments, Indicating Stress Fractures 

Amazon’s fulfillment and distribution infrastructure buckled under the sudden and dramatic increase in online purchases. In response, Amazon restricted which types of products it would accept to its fulfillment centersBrands that were in non-essential categories were left out to dry as Amazon’s overloaded fulfillment centers raced to fulfill orders. Amazon’s capacity was so overloaded that they began hiring for 175,000 new jobs.  

Nevertheless, Non-Essential Categories Performed Better than Expected 

Kaspien’s partner brands were able to recover from the restrictions, but the fact that Amazon restricted shipments in the first place is cause for concern. Brands unable to respond quickly enough could see significant harm to their business stability caused by the decision, however necessary it was. 

Although stay-at-home orders were issued across the nation in mid-March, online sales remained steady in most categories, regardless of whether they were labelled essential or non-essential. 

Amazon Then Restricted Unit Capacity at Fulfillment Centers 

While the category restrictions have been lifted and new recruitment is underway, we do not anticipate that Amazon will have resolved the issue by the end of Q2. In fact, we’ve seen a new restriction arise: Amazon is capping the number of units that brands can keep in their fulfillment centers. At Kaspien, we’ve seen one brand’s monthly storage limit be reduced to 3,000 units, despite typically selling through 10,000 units per month.  

Amazon has not clearly communicated the reason for the unit restriction, but there are two probable causes:  

1. Amazon’s processing centers are still overloaded and will likely remain so for several more months. 

2. Storing fewer units is more efficient for Amazon because it helps reduce the financial risk of storing stagnant inventory that does not generate profits.

For sellers, this change means that their sales forecasting and lead time prediction models need to be highly accurate so that they can optimize inventory turn rates. If sales remain steady but Amazon limits the unit volume, sellers will need to move smaller numbers of units more frequently in order to maintain sales capacity.  

Brands May Need to Explore Supplementary Fulfillment Options 

These back-to-back restrictions indicate that Amazon may not always be reliable fulfillment partner, at least not in the near future as it responds to COVID-19. Brands may need to explore supplementary options, such as Fulfilled by Merchant (FBM) or third-party logistics providers like Deliverr, to support their Amazon business. 

Dropshipping also proved to be an extremely beneficial tool for brands that were impacted by the category restrictions. As Amazon’s shipping times for non-essential items grew, dropship-enabled products even began to win the Buy Box against FBA offerings. Kaspien saw triple digit YoY growth in dropship orders while the category restrictions were in effect. 

WHAT LIES AHEAD: Q2 MAY BE ONE OF THE STRONGEST ON RECORD 

Amazon expects net sales to grow between 18% and 28% compared to Q2 2019. However, operating income is expected to range from -$1.5B to $1.5B, compared to $3.1B in Q2 2019Amazon provides this guidance with the plan that they will spend approximately $4B in Q2 for coronavirus testing, revised safety policies, increased pay for hourly workers, and other measures. As Amazon explicitly notes, the above expectations are only that – expectations – and are subject to change due to a number of factors. 

Although Amazon may expect their operating income to be negative in Q2 due to COVID-related expenses, experts predict that this quarter may be one of the strongest in Amazon’s history. This prediction is based on several factors, but the two biggest are related to the government’s stimulus package and pervasive, lasting changes in consumer buying behavior. 

Amazon Benefits from Stimulus Checks 

Amazon has and will continue to benefit from the stimulus checks the government began distributing in April, with experts predicting that Amazon will capture a leading share of consumer purchases made with the stimulus money. Some forecasts estimate that April will see approximately 50-60% growth YoY in the North American Retail segment, due in large part to consumers spending their stimulus checks on Amazon.  

The fact that Amazon has captured the majority of stimulus purchases is a positive sign for brands on the marketplace. While brick & mortar stores have been hard hit by stay at home orders across the nation, brands are still able to capture sales and provide for their customers by listing online. 

Consumer Buying Behaviors Will Change 

In addition to capturing a large share of the stimulus package, Amazon also stands to gain from pervasive shifts in consumer buying behavior. More shoppers than ever before are buying online, and even after the stay-at-home orders are lifted, we expect to see a lasting impact in where and how shoppers purchase.  

Amazon’s Advertising Revenue May Dip 

While Q2 may be one of Amazon’s best, at least by some metrics, advertising revenue is unlikely to be among them. Ad revenue has been one of Amazon’s fastest growing segments in recent years, but experts predict that their advertising revenue growth rate will dip in Q2, a trend that Kaspien has seen in our own data.  

The average cost-per-click for Amazon Sponsored Product ads has decreased by 6% YoY, compared to a 38% increase in 2018 to 2019. This shift from rising costs to falling costs suggests a reduction in competition as more brands pull back their advertising budgets. This reaction is likely a mistake, but you can read more about why in another post. For Amazon, brands pulling back ad spend will diminish their advertising revenue growth rate 

etailz raises another $5.2MM in funding

We’re excited to announce that Kaspien’s parent company, Trans World Entertainment (TWEC), secured an additional $5MM in debt funding, adding to Kaspien’s $25MM funding raised in February earlier this year. This new funding comes from three investors: Alimco Financial Corporation, Kick-Start Funds, and the Robert Higgins TWMC Trust. The funding will be used to bring the full focus of the company exclusively to Kaspien 

In conjunction with the fundraising, several of Trans World’s Board members are retiring, including Michael Solow, Michael Feurer, Jeff Hastings, Rob Marks, and Michael Nahl, and TWEC CEO Michael Feurer has left the company. With the former Board members’ departure, two new members will be joining our Board of Directors: Jonathan Marcus, CEO of Alimco financing, and Tom Simpson, a co-founder of Kaspien and the executive chairman of Kaspien from 2008-2016. Both bring a wealth of knowledge and experience highly relevant to Kaspien’s business, providing invaluable insights that will fuel our journey to becoming the ultimate online growth platform. Moving forward, Kaspien’s CEO, Kunal Chopra, will report directly to the Board of Directors, helping drive the company’s exclusive focus on Kaspien. 

We are thrilled to have the support of a new Board of Directors who are directly aligned with our mission, vision, and strategic objectives. Combined with our existing team, partners, and the exclusive focus of the Board of Directors, we are very well positioned to continue to execute our vision of becoming the industry leader in marketplace products and services. We are very excited about the momentum we have generated so far in 2020, and these recent developments are only adding fuel to the fire. 

Read additional coverage on the funding announcement here: 

For Press-related questions, please reach out here 

For business inquiries, please reach out here. 

Celebrating brands supporting communities during COVID-19

The news cycle is pretty bleak lately, but as Mr. Rogers famously reminded us, it’s important to take time to look for the helpers. Medical professionals, personal protective equipment producers, emergency workers, grocery store workers, utilities workers, and more have all continued providing essential services to keep our day-to-day lives running as smoothly as possible, even as the world takes historic measures to slow the spread of the coronavirus. Without their efforts, things would be even more difficult.  

In this post, we are celebrating more helpers: Kaspien partners that have gone beyond their normal operations to support their communities locally and across the nation. 

SRAM, QBP, and HLC Provide DTC Shipping to Help Keep Local Bike Shops in Business 

SRAM, a brand that produces bike components and accessories, is working with Quality Bike Products (QBP), and Hawley-Lambert Company (HLC) to provide direct-to-consumer (DTC) shipping for local bike shopsBikes sales tend to rise in spring and summer, and these shops depend on these seasonal sales to continue operating. SRAM’s, QBP’s, and HLC’s efforts will allow shoppers to still patronize local bike shops during quarantines without having to physically visit the store, helping these local businesses stay in business even as more people practice social distancing. 

Combat Wipes Donates Sanitary Wipes to Local Police Department 

Combat Wipes, a brand that produces sanitary wipes for use in the outdoors, made a large donation of their sanitary wipes to the Voorhees Police Department, to help officers stay safe as they continue working through quarantines. The biodegradable wipes can be taken with officers in their patrol vehicles and kept in the office, helping maintain sanitization policies. 

BrilliantPad Helps Produce Surgical Masks 

BrilliantPad, a brand that normally produces an automated indoor dog potty, has worked with one of their suppliers to repurpose their factory from creating BrilliantPad puppy pads to producing surgical face masks. These face masks are FDA and CE approved, complying with GB/T 32610-2016 and GB 15979 standards. The BrilliantPad team set up a new company, Chicago PPE and has already produced and shipped over 2 million masks.

They were recently featured on NPR and CNN for their great work. You can listen here.

Surgical masks can be purchased in bulk quantities by hospitals,  governmental agencies, first responders, and critical care teams here.

Scotch Porter Provides Free Resources for Grooming, Fitness, Meditation, and Cooking 

Scotch Porter is a brand that makes men’s grooming productsPracticing isolation and social distancing can take a toll on the mind and body, so Scotch Porter has begun creating a series of content via Instagram Live, articles, and videos to help people through the stressful climate. So far, they’ve produced content for the following: 

  • Grooming: How to groom and take care of yourself when you can’t visit the barbershop 
  • Fitness: Ab Circuit Workout w/ Blane Fitness @Blanefit and other fitness sessions 
  • Meditation: Live meditation/holistic healing sessions 
  • Cooking: Quick, Healthy & Yummy cooking demonstrations 

Check out their article about how to manage your day with a routine and follow their Instagram to be alerted of their next wellness livestream.  

Be a Helper 

Uncertainty can be frightening, but taking action can be empowering. Not everyone or every business is in a position to take extra actions right now, but those that can, should, no matter small it may seem. The more we can help our communities and country, the easier this hardship will be.  

For our part, Kaspien has leveraged our supply network to send hundreds of thousands of personal protective equipment to hospitals in several states. This effort could not have been done without our General Manager of Sourcing, Denise Abraham 

We’re also temporarily offering free access to our Amazon ad management software for 45 days to brands who could benefit from automating their marketing campaigns and increasing efficiency when there are so many things demanding our attention. We also temporarily reduced our commission rate for our FBA cost recovery softwareso brands can get even more back from reimbursement cases during this time when brands have to tighten their belts.  

Thank you to all the Helpers out there. Let’s get through this together.