MGR Amazon Weekly Update | August 19, 2019
Top News This Week
Amazon Wants to Control Seller’s Pricing
Amazon is introducing ‘Sold by Amazon’ for 3rd party sellers, previously only available to vendors. Amazon wants sellers to allow them to dictate the pricing on products in exchange sales acceleration. Amazon will provide a ‘Minimum Gross Proceed’ meaning a guaranteed profit amount per unit sold. The problem is that this number is renegotiated every 6 months, and as vendors have experienced, Amazon will try to squeeze you. Often the MGP Amazon offers will go down 20-50% in the next 6 month period. There are certainly pros to using this program, but the risk of getting margins slashed has scared many away.
The US Senate is Asking for an Explanation of How Amazon’s Algorithms Decide on Which Products Get the “Amazon’s Choice” Badge
We discussed in this newsletter previously our theories and experience of how products do or don’t get awarded the crown jewel that is the “Amazon’s Choice” badge. But the truth is while we and others have some ideas for how it works, no one has an exact answer. No one except for Amazon. And now, because the badge can provide such a significant boost to sales, the US senate is demanding an answer. The reason Amazon has yet to give up the secret is understandable, they don’t want sellers gaming the system. But, as the anti-trust case continues to develop, Amazon may be forced to finally give an answer.
Other Notable Links:
1. Amazon is testing a new ‘Top Brand’ badge for fashion products, and may expanding to many other categories soon – RETAIL DIVE
2. Amazon continues to invest heavily into its India expansion, now buying a stake in India’s 2nd largest retailer – Bloomberg
3. Some sellers are organizing against Amazon, making anti-trust claims against Amazon selling its own private label products that often rank highly in search results – Bloomberg