April 16, 2014

Amazon’s Fee Increase Announcement and How to Deal With It

At the end of March, you may have received a notice from Amazon about a fee increase that will go into effect May 16, 2014. If you have any tenure in e-commerce, you know fee increases are par for the course and not just an Amazon move. However, what you may not have seen is that this update increases the minimum referral fee for an item sold on Amazon to $1.  

Amazon-logoAmazon’s Fee Increase: The Details

Amazon has announced this change for 21 categories (see below for the full list.) This fee update is an extension of similar minimum fees the company instituted earlier this year in the Electronics Accessories, Beauty, Health & Personal Care and Jewelry categories (Jewelry has a $2 minimum fee). Depending on the category, this notice changes referral fees from 6% and 15% with no minimum, to a minimum fee of $1 and the same 6-15% above that.   

Let’s say you’re selling a $3 binder clip, in the Office Products category. Previously, you would have incurred a fee of 45 cents. With Amazon’s changes, you’d now incur a $1 fee, or a 222% increase. The lower the item’s price point, the higher the percentage impact. This fee change should cause many retailers to pull out their profit/loss data and their calculator and lock themselves away for a few hours to run numbers.

Sellers who play in the low-price product spectrum operate in a volume business, and many have efficient systems in place to make it work. Drop-shipped products, prepackaged items for quick fulfillment, free shipping for a low “all in” consumer cost and other strategies ultimately help these sellers turn items over at lightning speed to stay within their razor-thin margins. Absorbing fees at their current rate is likely a challenge, but with a $1 minimum fee, profits might come into jeopardy.  This may send some sellers into serious discussions about the viability of their business. 

A Summary of the Fees-Increase Changes by Category

Table

Next Steps for Retailers

So what do you do if you find yourself affected by this change?  Here are five strategies that should be top of mind before May 16, when the fee changes go into effect:

1. Multiple Item Case Packs: This is likely the first and easiest strategy that you can implement to minimize the impact of a minimum referral fee. The goal would be to increase the costs of the packaged quantity to above the Total Sales Price thresholds listed above. For example, let’s say you sell baby products and stock Infant Safety Q-Tips for $4 in the Baby category. Rather than selling one box at $4 and incurring a $1 referral fee, sell two boxes in a case pack for $8 and incur a $1.20 fee. The single-pack item has a fee payout of 25%, but the two-pack item has a fee payout of 15%, which is the category percentage.

Also be mindful of how case pack listings are displayed. Sometimes multipack listings can be crossed with individual listings if they share a UPC. Some sellers use the Item Package Quantity or Size attributes to set up a variation listing where sellers choose the case pack option from a drop-down list.

2. Product Bundles: Similar to the strategy above, you can bundle complementary products so your average selling price will fall above the threshold for the minimum fee. But if you sell in a category with a required UPC and you don’t have an available UPC exemption, then you may need to purchase UPCs for this bundled product in order to get the products listed on Amazon.

Product Bundle
3. Marketplace Expansion:
Another prudent step would be to consider which alternative marketplaces have fee structures that are favorable to low-price items. You’ll run into a similar problem on Rakuten.com Shopping, which also has a minimum fee per item (99 cents), so you’ll have a similar profitability problem. Shop.com has a flat fee of $1 per order as well. EBay could be a favorable destination, but run numbers on how listing fees and your conversion rates will add additional expense. Newegg and Sears both have percentage referral fees for sold products, so they’re great destinations for products with low prices.

4. Sourcing:  After you’ve run numbers comparing your current margins to your new margins with the Amazon fee increase, you may realize you have to pull some low-price products. For many businesses, this means scrambling to find a replacement revenue source, meaning sourcing new products and product lines. Start with the vendors you already work with: Are you selling their entire catalog, or are there other items you can pick up?

Then pursue distributors and manufacturers in your category that you’ve passed over before; it may be time to work with them now. If nothing works, then seek new product lines within your category. ChannelAdvisor surfaces product suggestions for you within our Amazon Insights view, which shows you top-selling products, the Buy Box price, the amount of competition and the UPC, so you can take that information into account to source new SKUs. You may find that an opportunity awaits with a vendor that offers drop shipping, enabling you to use a software suite like ChannelAdvisor to automatically process the drop-shipped inventory and post it to Amazon, reducing your selling costs. Sourcing new revenue streams may be key to long-term survival.

5. Amazon Product Ads: I’ve saved the best tip for last — this is probably the best strategy you have for continuing to sell low-price items on Amazon. To take advantage of Amazon Product Ads, simply offer your low-price products on your website, where your fee structure is low to none. Then send Amazon a feed of Product Ads that will show up on item detail pages under the header “Product Ads from External Websites.” Product Ads operate on a cost-per-click (CPC) model, charging you a fee when a customer clicks through to your website.  


ExternalAds.png

Assuming you have good conversion metrics once the customer is on your own website, Product Ads could be more cost-effective than stocking the product on Amazon and paying the minimum referral fee. Plus, on your website you have the opportunity to sell other items and establish customer loyalty. Product Ads aren’t available in all categories, so see this Amazon page for more information on availability and fees. For many categories, Product Ads are only 20 cents per click for products priced under $20 (those affected by the referral fee increase), which could provide a more economical and advantageous route for capturing the sale of a low-price item. ChannelAdvisor can help automate your Amazon Product Ads feed, and if you haven’t yet established a standalone website presence, ChannelAdvisor offers webstore options that are integrated with our platform to make that step easy.

The Bottom Line

We hope you take these tips back to your team to help you plan your updated strategy. Ultimately, Amazon is a great opportunity for most businesses. The marketplace is still experiencing enormous year-over-year growth. It has an increasing customer base that’s active and loyal. Plus, they offer some great incentives, such as Prime and Fulfillment by Amazon. There are ways to adapt and still succeed in the face of these new referral fee changes.  To find out how ChannelAdvisor can help, please contact us at info@channeladvisor.com or call 866-264-8594.

Blog post by Rachel Miller, ChannelAdvisor Product Marketing Manager


Revive Your Amazon SalesTo learn more top tips on how to maximize your Amazon sales, click here

Check out the 2014 Spring Release

2014 Spring Release
It's Spring Release time! Learn all about the new ChannelAdvisor product features that help retailers become smarter about e-commerce at our sister blog, eBay Strategies, and sign up for the webinar on May 1st!

April 15, 2014

(Additional) Secrets to Successful Selling on Amazon: Part III

You asked. We listened.

In February, many of you joined ChannelAdvisor Marketplaces Services Team Lead John Bryan for an informative webinar, “7 Secrets to Successful Selling on Amazon.” During the webinar, John dispensed wisdom on selling your products through the popular marketplace giant.

Amazon-logoWe were overwhelmed by the positive response to the webinar, and even after it ended, you flooded our inbox with additional questions about the marketplace.

We get it. Amazon can be complicated. And we’re here to help. Over the months of April and May, we’ll be posting a five-part follow-up blog series based exclusively on your questions and broken down by topic. (Read Part I on Fulfillment by Amazon and Part II on the Amazon Buy Box.)

This third installment, focused on Amazon keywords, features 13 of your most pressing keyword questions answered by ChannelAdvisor experts.

Q: Do Amazon search results pertain to the product title or just the five keywords?

A: Both keywords and title factor into Amazon’s search results.

Q: Can I use other product names in the keywords? Is that okay?

A: We recommend that you use keywords (sometimes referred to as “search terms”) that pertain to or describe your specific product.

Q: Will Amazon really suspend someone for using a third-party brand or trademark as keywords even if that brand or trademark doesn’t show up on Amazon's site?

A: Per Amazon's policy, third-party brands and trademarks aren’t permitted as keywords. Amazon has the ability to suspend your rights to sell on the marketplace if you violate these terms.

Q: What's an example of a third-party keyword we shouldn't use?

A: Third-party keywords are brand terms that are different from the actual brand of the product. For example, if you’re selling Adidas running shoes, you wouldn’t want to use “Nike” as a keyword.

Q: Regarding a third-party name in the keywords: Can I use my old company name or product name? Customers still search for those terms, but Amazon wouldn’t recognize they have new names.

A: We recommend reaching out to Amazon to explain your situation to ensure you’re not violating its policy.

Q: Where should we optimize the keywords? In the product description?

A: You enter your keywords in the keywords field, not the product description. You should separate these keywords by commas.

Q: Can we have more than one keyword in the keywords field? It looks like we have up to 2,000 bytes per line.

A: Amazon allows up to five keywords (search terms) per product in the keywords field.

Q: So I can only use one term per line? Typically we fill the lines with terms. Does Amazon only recognize the first word in the line?

A: Each search term should be a single term and not a phrase. If you use a multi-word phrase, the customer would need to search the exact phrase to discover the product through search.

Q: When using multiple keywords, should we separate them with commas?

A: Yes, you should separate the keywords with commas to prevent them from being interpreted as a phrase.

Q: Are keyword searches sensitive to upper or lowercase letters?

A: No, keyword searches aren’t case sensitive.

Q: What’s the difference between search terms and Platinum Keywords?

A: Platinum Keywords are available only to Amazon Platinum merchants and are a way to associate your products with a custom browse structure. Search terms, on the other hand, help Amazon locate the product when customers perform searches. A custom browse structure is a way of designing the category navigation on a seller's Amazon store.

Q: Are these keywords specifically for Amazon's search, or do they connect to search engines such as Google as well?

A: Because it's a self-contained marketplace, keywords are specific for search on Amazon only. Identifying and maximizing your keywords on Google should be part of your paid search strategy, which we can help with through ChannelAdvisor Digital Marketing.  

Q: What else should I keep in mind about keywords?

A: Use keywords/search terms as an opportunity to provide additional words that you couldn't fit in the product title. Think about buyers and how they’re searching. It may not make sense to have some of these terms in your title (or they may not fit), but the keywords field gives you the opportunity.

Check back next week for the fourth part of this blog series, which will tackle your questions about data quality.

Blog post by Luke Evans, manager, marketplaces services, and John Bryan, team lead, marketplaces services at ChannelAdvisor.


Amazon SuccessFor more information, download the full webinar or the eBook “Your Essential Guide to Success on Amazon” here.

April 08, 2014

Should you attend ChannelAdvisor User Conference?

ChannelAdvisor hosted its inaugural User Conference last year in Durham, NC, and we discovered something interesting: 100% of attendees said they’d return.   

ChannelAdvisor User Conference 2013 from ChannelAdvisor on Vimeo.

So you may be asking yourself, how is this different from Catalyst? Well, Catalyst is our industry conference where we explore new e-commerce channels, concepts and strategies. User Conference is all about the tactics. If you are the person working with ChannelAdvisor products on a daily basis, this is the conference for you. We call it “hands-on” for a reason!  

Here is a little sample of some of the sessions at User Conference, some of the tips you’ll learn and some of the e-commerce experts you’ll meet:

Sessions:

  • Integrated Product-Driven Digital Marketing for Retailers

  • Beginning Business Rules and Flex Feeds

  • Optimizing for Performance on Google Shopping

  • Branching Out to New Marketplaces

Tips:

  • "Selling on eBay? Read your titles aloud. If a retail sales person presented you a product using your title, how would you react? Don't just load your titles with keywords, tell a great story that sets you apart from your competition and is welcoming to buyers. Use your item specifics to pass eBay those keywords."     -Selma Pittman, ChannelAdvisor Product Management
  • "Update Bid Rules! Bid Rules can be a very powerful and helpful tool but only if the data that makes up the bid rule is accurate. Over time, the triggers and ERS target will change dramatically from when you initially set up the rule. Make sure that the bid rule is reflectant of the current performance of your campaigns. Be sure to update them from time to time, especially if you are seasonal!"     -Amber Howland, ChannelAdvisor Customer Success

In 2014, we will host two User Conferences:

  • User Conference West: April 23, San Francisco, CA, St. Francis Hotel

  • User Conference East: September 15, Durham, NC, Washington Duke Inn

The Westin
The Westin St. Francis

There’s only a couple weeks until the April User Conference in San Francisco. Register today!  

Still not convinced? Here are a few more reasons to attend ChannelAdvisor User Conference

  • You’ll be able to attend hands-on, practical workshops led by ChannelAdvisor product managers and members of the ChannelAdvisor Services team.
  • It’s an opportunity to get your hands dirty and try new things under the guidance of our experts.

  • Our Services team will conduct individual strategy sessions to ensure you’re optimized for growth.

  • You’ll have access to our product managers so you can share feedback or discuss ideas.

  • Our team of experts will provide individual account analysis.

  • We’ll offer plenty of networking opportunities to discuss best practices and creative ideas with other retailers.

(Additional) Secrets to Successful Selling on Amazon: Part II

You asked. We listened.

In February, many of you joined ChannelAdvisor Marketplaces Services Team Lead John Bryan for an informative webinar, “7 Secrets to Successful Selling on Amazon.” During the webinar, John dispensed wisdom on selling your products through the popular marketplace giant.

Amazon-logoWe were overwhelmed by the positive response to the webinar, and even after it ended, you flooded our inbox with additional questions about the marketplace.

We get it. Amazon can be complicated. And we’re here to help. Over the months of April and May, we’ll be posting a five-part follow-up blog series based exclusively on your questions and broken down by topic. (Read Part I on Fulfillment by Amazon.)

This second installment, focused on the Amazon Buy Box, features 12 of your most pressing Buy Box questions answered by our ChannelAdvisor experts.

Q: Does the Buy Box apply only for a specific segment of items, or does it apply per company?

A: The owner of the Buy Box is determined for each item. As a seller, you must first meet the selling standards to be eligible to win the Buy Box. These standards include strong customer service and a low Order Defect Rate. After you’re deemed eligible, pricing, Fulfillment by Amazon (FBA), availability, etc., come into play for each item.

Q: Should I respond to positive customer feedback on Amazon? Would it affect the Buy Box?

A: Responding to positive feedback isn’t required and doesn't improve any of your seller metrics on Amazon.

Q: Can you explain how volume of inventory would affect the Buy Box if I have the lowest price and use FBA?

A: This relates to the volume of inventory that you’re selling. Amazon is anticipating that the Buy Box will lead to more sales, so they want to ensure that sellers with the Buy Box have enough quantity to cover that demand. To make sure you hold on to the Buy Box, you'll need to keep up with the large order volume and maintain availability.

Q: How much inventory should I have available to be considered for the Buy Box?

A: Again, Amazon wants to be sure you’re ready for increased customer demand. There's certainly not a specific number you need to have available, but you should probably have more than 10.

Q: Do I need to worry about the Buy Box if I’m the only seller of my product?

A: It's not as relevant if you’re the only seller, but it will come into play if additional competition appears. But yes, you still need to meet the Buy Box requirements even if you’re the only seller.

Q: I’m an Amazon professional merchant who was recently awarded the Buy Box without FBA. Since having the Buy Box, I haven’t received any sales. I’ve asked Amazon to remove the Buy Box from my account because it removes the curiosity factor. Without the Buy Box, my price wasn’t displayed, which resulted in more sessions and conversions. Am I making the right decision by asking Amazon to remove it?

A: If Amazon is willing, it might be better to test the Buy Box on a few products rather than roll it out on every product you sell. Statistically, most sellers find the most success after winning the Buy Box.

Q: How do I become a Featured Merchant?

A: Amazon uses customer metrics to determine which sellers should have Featured Merchant status. Included in these metrics are ODR, other seller performance metrics, your history on Amazon and the shopping experience you provide to customers. Read more about how the different metrics are evaluated at both ChannelAdvisor and Amazon.

Q: If I’m using FBA, does the Buy Box pertain to me?

A: Yes, it pertains to all sellers. Using FBA helps with winning the Buy Box, but it’s not an automatic way to win it, either. Pricing and the other Buy Box considerations still come into play.

Q: If I can't use FBA, and I sell items that a dozen other sellers have, what's the best way to win the Buy Box?

A: Obtain and sustain Featured Merchant status. Provide strong customer service and satisfaction while maintaining consistent order processing. And make sure you’re always competitive on price by using a repricer.

Q: What repricer tools do you recommend?

A: ChannelAdvisor offers an Amazon Repricer that allows sellers to set up rules for their products, competition, and margins. Retailers can also preview any SKU in real time to see where that product would be priced with it.

Q: If Amazon lists an item that’s out of stock, can it still have the Buy Box even though my product has a higher price?

A: Amazon ultimately makes the decision of who owns the Buy Box, but we haven't seen an out-of-stock product in the Buy Box when other competitively priced products are available.

Q: Is the Buy Box available for individual sellers?

A: Yes, if you sell your product, you could win the Buy Box. However, you must meet the criteria. For more info on the Buy Box and how a seller's listing gets there, read here.

Check back next week for the third part of this blog series, where we’ll tackle your questions about Amazon keywords.

Blog post by Luke Evans, manager, marketplaces services, and John Bryan, team lead, marketplaces services at ChannelAdvisor. 


Winning the Amazon Buy BoxFor more information, download the full webinar or the tip sheet “Quick Tips for Winning the Amazon Buy Box.”



April 01, 2014

(Additional) Secrets to Successful Selling on Amazon: Part I

You asked. We listened.

In February, many of you joined ChannelAdvisor Marketplaces Services Team Lead John Bryan for an informative webinar, “7 Secrets to Successful Selling on Amazon.” During the webinar, John dispensed wisdom on selling your products through the popular marketplace giant.

Amazon-logoWe were overwhelmed by the positive response, and even after it ended, you flooded our inbox with additional questions about the marketplace.

We get it. Amazon can be complicated. And we’re here to help. Over the months of April and May, we’ll be posting a five-part follow-up blog series based exclusively on your questions and broken down by topic.

This initial post, focused on Fulfillment by Amazon (FBA), contains 12 of your most pressing FBA concerns answered by our ChannelAdvisor experts:

Q: If I sell many single-item products like books (single copies), how do you recommend getting started with fulfillment? Is this something that FBA can handle?

A: It depends on what your storage and shipping costs are on your own, compared to what it would cost to use FBA. Review FBA offerings here.

Q: Do I need UPCs to select the FBA option?

A: You need a UPC to list on Amazon if a product page doesn’t already exist, regardless of whether it’s FBA or merchant-fulfilled.

Q: Does Amazon fulfill paint products?

A: Amazon doesn’t have FBA for paint at this time.

Q: If my company is using FBA, does Amazon set the actual prices for my products? How are these prices determined?

A: You’ll still set the prices if you’re using FBA. FBA is storing your products and fulfilling orders. We recommend increasing the price to cover the increased cost of FBA.

Q: Does it cost more to sell with FBA? Is there an additional charge to join? What’s the range of fees associated with FBA?

A: Yes, there are additional fees involved with selling through FBA. While the pricing will vary depending on the weight of the product, you should be prepared to pay additional costs related to fulfillment, including handling, storage and picking and packing. For more details on specific costs, try using the FBA calculator.

Q: Is it really a lower fulfillment cost when you factor in Amazon’s fees?

A: Consider your cost for storage, customer service and shipping compared to FBA fees, along with a possible increase of orders with FBA's incentives. This is a business decision, and it’s worth reviewing your options. Review FBA fees, and use the FBA revenue calculator to help research.

Q: Are FBA items automatically included in the global sales marketplaces?

A: No. For your products to be included in global marketplaces, you need to sign up with Amazon FBA Export and also ensure that you have products assigned to the FBA program. Read more about how to set up your account for FBA Export.

Q: If my company isn’t using FBA, will our products be available on Amazon global marketplaces? If not, how do we set that up?

A: If you’re not using FBA, you don’t have the option to use Amazon FBA Export. You still have the option to sign up with an Amazon account for each locale (Canada, Germany, etc.) and fulfill directly from your own warehouse or locations.

Q: How do we make our FBA product eligible for international shipping? Do we request it?

A: You can enable your existing FBA product by signing up with Amazon FBA Export. Only standard-size media and non-media units are eligible for FBA Export. Oversize units can’t be exported. Read more about how to set up your account for FBA Export.

Q: Is there any way to figure out the cost of selling internationally with FBA?

A: There’s no additional fee for FBA Export as long as you have existing FBA products. The fees for FBA can be found here.

Q: If we already have a relationship with Amazon.com (US), do we have to use FBA to access Amazon Canada or EU, or are they separate relationships?

A: FBA isn't required for Amazon Canada or EU, as you can fulfill out of your own warehouse.

Q: Where can I find more information about FBA?

A: Review all FBA offerings here.

Check back next week for (Additional) Secrets to Successful Selling on Amazon: Part II, where we’ll tackle your concerns about the Amazon Buy Box.

Blog post by Luke Evans, Manager, Marketplaces Services, and John Bryan, Team Lead, Marketplaces Services at ChannelAdvisor.


Amazon SuccessFor more information, download the full webinar here, or the eBook “Your Essential Guide to Success on Amazon” here.

March 28, 2014

How to Adapt Your E-Commerce Strategy for a Changing World

Retail is changing fast, and keeping up with its evolution is more challenging than ever. According to a recent Wall Street Journal article, for example, visits to brick-and-mortar stores during the holidays have dropped by more than 40% in the last four years. This massive growth represents a significant shift in the industry, which continues to bring new channels and even more change in consumer behavior. What does this mean for retailers?

Though the methods of selling may change, the one constant will always be your product catalog. You want to take those products and provide them to the customer where on the channels they want to purchase on, be it an online marketplace, a search engine results page or comparison shopping engine.

Here, we’ve outlined three ways to ensure your retail strategy can adapt to the changing times.

1. Work efficiently. 

Work EfficientlySpend your time on activities that most support your strategic goals, and minimize the time you spend on low-value work. There are a number of ways to accomplish this goal.

  • Simplify and centralize your product information in a single, clean data feed so that you only need to make updates in one place. This also helps minimize manual processes, decreasing the risk of human error.

  • Transform your data with tools like business rules. For example, a clothing retailer can use a business rule to add color and size to his product titles, ensuring his T-shirts are listed accurately and effectively. Business rules can save you countless hours of unnecessary work.

  • Improve your product data with accurate product descriptions and categories to make sure your products show up in buyers’ searches. Focus on including the information that buyers are searching for.

  • Build a partner ecosystem to enhance or expand your capabilities. Whether working with the Fulfillment by Amazon (FBA) program to streamline your fulfillment process or expanding your supplier network to add more products, take advantage of what’s already out there.

2. Understand your competitors to stay ahead of them.

Know your competitors and find out how they’re adapting to evolving buyer behavior. Not only will you learn best practices and pick up new ideas, you can also formulate a plan to keep yourself one step ahead of them. Here’s what to look for:

  • Are your competitors expanding their supplier networks? Have you weighed the benefits of using FBA or eBay’s Global Shipping Program?

  • How are your competitors bringing an offline “touch and feel” to their e-commerce experience? Are they using Rich Media tools to highlight key product features? Does that make sense for your customer demographic?

  • What channels are your competitors using to get exposure in different geographies? Would it be a good idea for you to expand to an online marketplace like Tesco in the UK, for example? Or perhaps MercadoLivre in Brazil or Amazon Canada?

3. Keep your focus.

Every business has unique goals and customer needs. However, the evolution and growing complexity of online retail today has made it much harder to stay focused on what matters to you and your customers. Too often, retailers find themselves thrashing around on low-value activities or getting too bogged down in the minutiae to concentrate on the parts of their business that really matter.

For example, tracking down and resolving listing and product data errors across multiple sources is time-consuming and inefficient.  Manually updating your product catalog from multiple suppliers leads to human error and distraction. Perhaps most important, if you have to rely on multiple reports or reporting platforms to know how your products are selling, you’re missing the big picture.

Instead of overwhelming you, technology should be harnessed to help you manage the daily chaos and stay focused on your goals. Having a single place like ChannelAdvisor’s platform to aggregate your data and drive actionable analysis takes many of the distractions off the table.

Our transaction-based reporting provides a complete picture of what’s important and what you should really be focused on: what your customers are buying and how they are buying it.

To achieve sustained success in a changing world, online retailers must be willing to adapt their businesses. Customers are not coming to you in the same ways as before. You and your core product inventory must go out to meet them where they are online. In order to do so effectively, you must work as efficiently as possible, understanding all your options and staying focused on what matters to your business goals.

Everything else is easy.

Blog post by Jamie Claar, ChannelAdvisor Product Manager 


Improve Online SalesTo learn more about how you can adapt your business to an evolving e-commerce landscape, download this free tip sheet: 8 Ways to Improve Your Online Sales.

 

March 12, 2014

Live Blogging from 2014 Catalyst Americas: Amazon Fireside Chat, Part II

Welcome to the live blog of ChannelAdvisor's Catalyst 2014. We'll be live blogging the general sessions to make sure Catalyst attendees don't miss anything. Also, make sure you're following hashtag #Catalyst2014 and @ChannelAdvisor on Twitter for all the latest.

Speakers: Speakers: Scot Wingo, ChannelAdvisor CEO and Sebastian Gunningham, Sr. Vice President of Seller Services for Amazon Services

Part 1: http://www.amazonstrategies.com/2014/03/live-blogging-from-2014-catalyst-americas-amazon-fireside-chat-part-i.html

Scot: How do you think about FBA at Amazon?

Sebastian: Prime is the best deal in shopping, we think. And we want to do more in the future. On the shipping side, the promise of Prime is a very accurate promise. The scale of the FBA promise means you can put more than one item in a box. The more items you have available, the greater the scale. We’re inventing a lot on the first-party side – and imagine a future with drones – and we can then open up those innovations to third-party sellers. The success is made with everyone voting with their feet. And different countries have different logistical issues. In Japan, storage is an issue, so we’ve helped with that. In Europe, sellers can store their products in multiple countries.

We've worked hard on getting the infrastructure working in Europe: and what we see working there, we would like to happen globally. I also commend the effort ChannelAdvisor is making to provide global support to sellers. Selling globally is complicated: You need to account for shipping, local customer service. There's an opportunity to make this one-click, to provide easy shipping, and we're excited about that. 85% of our units are under 5 pounds...

Scot: A lot of people said drones were a PR stunt, but we were pretty sure you were serious.

Sebastian: Yes, we're working on it. I can't say much, but we're excited.

Scot: What else can you say on cross-border trade?

Sebastian: Take the simple-use case of products that can move across countries, and aren't subject to import fees, etc. -- consider media and how products like books move across the world. We have big business in China, Japan, US, Europe. I think sellers should jump in and begin to learn. Beware of potholes, but we've seen success in all directions. This is a theme for the future.

Scot: What about Russia?

Sebastian: We have a Kindle store there, which opened up the ability for us to go to more countries. We did this in Brazil, too. We'd love to do Russia, it's just a matter of when. I wish we could say we'd be there tomorrow. 

Scot: Let's talk about mobile: You're the number one most-accessed e-commerce app.

Sebastian: There are four experiences: app and browser on tablet, and app and browser on mobile. There's a different experience between a 7-inch screen and a phone screen. From a merchant perspective, you have to be on Amazon or another major player to have an app strategy and presence. I think these are the early days, too. We've been optimizing our browswer experience for years, and that process on the small screen is only just beginning. 

There's a big segment of customers who only know us through the app and will never go to the desktop browser.

Scot: Tell us about Flow.

Sebastian: It's an app that's constantly scanning, and will find products. If you're in a store, it will ID the product then bring up the page on Amazon. It's a continuous scan, and is a first step in an augmented reality of the shopping experience. We've had the recognition technology for some years now. If you fast-forward this a few years, the technology could be quite powerful. 

Scot: I have Google Glass, and Flow seems like it would be great for that.

Sebastian: There must be some shopping application for wearables. You could envision a wishlist app, or an app that keeps track of what you order each month.

Scot: You do a lot outside Amazon: Webstore, Checkout by Amazon. Are you trying to compete with Demandware with your Webstore? Who's the right customer?

Sebastian: We try to take some of the technology we've built for ourselves and extend it. We built a trusted shopping experience and have brought that to a trusted payment experience. You owe it to yourself to try these products. If you like them, keep them. If you have a website, you should try to pay with Amazon. We'll have a recurring-payment option coming soon. 

Product Ads take traffic to retailers' site; it's a great merchant experience, though we still have some work to do on the consumer side. We're also trying to build a low-cost website program that we think is good for retailers who need to scale at a low cost, and who need trusted e-commerce functionality. 

Scot: We're seeing many brands sell direct who never had before, especially given the slow-down in the brick-and-mortar world. These brands will come to us for help with navigating Amazon, wondering whether to do first-party or third-party. What's your advice?

Sebastian: Try it all. Different customer segments are growing at different rates. If you're a manufacturer, try FBA, try selling on our third-party marketplace. But this chaos that's happening in the retail world will be happening for a while, among multiple marketplaces and channels. And that's where ChannelAdvisor can be really helpful. If you want to be on the third-party marketplace, we encourage people to sell to our retailers, too. 

Scot: We're just about out of time. Any last remarks? I know we're all appreciative of Amazon and your services.

Sebastian: Thank you for being on the marketplace and for your patience with us at this scale. It's an honor to come here and see all the merchants here. If you look at this business in the next few years, the trends all look great, and we should see some healthy growth. Amazon's health is thanks to the work retailers do. 

Reminder for the Catalyst America’s social presence:
• Follow @ChannelAdvisor on Twitter as we’ll be tweeting out updates, reminders about sessions, networking events and more.
• Tag your social posts, Instagram pics with our show hashtag: #Catalyst2014 tabs on discussions, networking opportunities and more on the Catalyst app.
• Keep an eye on the ChannelAdvisor blogs where we’ll be live blogging the keynotes and main sessions at Catalyst.

Live Blogging from 2014 Catalyst Americas: Amazon Fireside Chat, Part I

Welcome to the live blog of ChannelAdvisor's Catalyst 2014. We'll be live blogging the general sessions to make sure Catalyst attendees don't miss anything. Also, make sure you're following hashtag #Catalyst2014 and @ChannelAdvisor on Twitter for all the latest.

Speakers: Scot Wingo, ChannelAdvisor CEO and Sebastian Gunningham, Sr. Vice President of Seller Services for Amazon Services

Part 2: http://www.amazonstrategies.com/2014/03/live-blogging-from-2014-catalyst-americas-amazon-fireside-chat-part-ii.html

Scot: Give us some background on what you do.

Sebastian: First, congratulations to you and the team for taking ChannelAdvisor public. I’ve been at Amazon almost eight years. I run all the merchant business, Fulfillment by Amazon, payments, front end of website.

Scot: As I noted in my keynote yesterday, our thesis is that marketplaces will eat the world. For the first time that I can recall, you put out a press release about how great the marketplace is doing.

Sebastian: It’s actually the second time we did that – the marketplace model, the world over, works well. We anticipate more in the future. We’ve expanded in many more countries and would love to be in 200 more. We love our hybrid first-party/third party system.

Scot: That press release noted that you experienced 65% year over year growth on your third-party marketplace. Retailers seem to have a black and white view: with 237 million active buyers, many want to be part of that. Others don’t know how to compete with that.

Sebastian: You’re not really competing with Amazon; you’re competing with the internet. The growth of the Amazon seller business has outpaced just about all retail growth I’ve seen. The marketplace business on its own is very successful in dealing with what the competition is thrown at them. It’s a great benefit to have first party and third party – everything Amazon comes up with to help customers will benefit sellers as well. The best way to compete with Amazon is to sell on our marketplace.

Scot: I also get asked about how retailers can contact Amazon, and how they wish they could pick up the phone to talk to someone.

Sebastian: We spend a lot of time trying to figure that out. We believe in self-service and building tools to make retailers self-sufficient. Retailers need to keep pushing on this. It can be hard for us to tell what's urgent for you, so we have cycles through our engineering teams to let us know what's critical, by accessing a button via Seller Central.

Scot: You opened up Gold Box to third parties last year. Do you have plans to expand that?

Sebastian: Yes, and the quesiton should be why we didn't do it ten years earlier. The merchants who've participated in the deals of the day have experienced incredible success. 

Scot: Subscribe and Save is another one we've been seeing interest in.

Sebastian: Yes -- this will allow you to have items delivered every certain number of days. This isn't trivial to put together across a large merchant population.

Scot: You've added new catogories: wine, art -- anything else that's new? Maybe gifts?

Sebastian: We'd love to make it easier for merchants to offer a scalable gifting program. We're very patient about categories and look at them long term, and what can build a loyal customer base. It's gated, to make sure retailers fit what we're trying to do.

 

Reminder for the Catalyst America’s social presence:
• Follow @ChannelAdvisor on Twitter as we’ll be tweeting out updates, reminders about sessions, networking events and more.
• Tag your social posts, Instagram pics with our show hashtag: #Catalyst2014 tabs on discussions, networking opportunities and more on the Catalyst app.
• Keep an eye on the ChannelAdvisor blogs where we’ll be live blogging the keynotes and main sessions at Catalyst.

March 02, 2014

Countdown to Catalyst Americas: Amazon Questions Answered

He’s back!  When it comes in industry insight, Amazon’s Senior Vice President of Seller Services Sebastian Gunningham has the answers.  Sebastian is a Catalyst veteran and will continue the tradition at Catalyst Americas 2014 in a fireside chat with ChannelAdvisor CEO Scot Wingo. The session will take place on Wednesday, March 12 from 8:30- 9:15 am PT.

Amazon Sebastian Gunningham
At Catalyst Americas 2013, Scot and Sebastian discussed everything from third-party growth to customer support at Amazon. For a summary of last year’s session, and a taste of what you can expect this year, the live blog posts can be found here: Live Blog of Amazon Fireside Chat Part I and Live Blog of Amazon Fireside Chat Part II.

As the Vice President of Seller Services, Sebastian helps third party merchants successfully integrate with the Amazon marketplace. Prior to joining Amazon in March of 2007, Sebastian held positions at Apple Computer Inc., Peace Software and Oracle Corporation.

Also not to be missed is the session, “How to Build a Webstore that Converts,” that will be presented by Paras Bhuva, Technical Engagement Manager, Amazon Services and Gina DeFrank, ChannelAdvisor Product Manager, Marketplaces on Wednesday, March 12th from 10:45-11:30 am PT.  This session will help retailers understand how to create a webstore optimized to convert and will help attendees understand:

  • The webstore must-haves for converting customers
  • How to avoid cart abandonment
  • What do to after a conversion to instill brand loyalty

Catalyst Americas is almost sold out, but there’s still time to sign up.  Check out the 10 Reasons Not to Miss Catalyst, and see the full agenda and register for Catalyst Americas 2014 today.