Part 2: 2018 Round Up with Kevin King & Liran Hirshkorn


Part 2 of our 2018 Round up with Kevin King and Liran looking at the rise of Black Hat tactics and how Amazon will respond in 2019, challenges to AMazon’s dominance and how smaller sellers will be squeezed by big brands

2018 Round up – Black Hat

  • Black hat tactics have grown a lot this year in our 2018 Round up
  • 2019 will likely be the year more Amazon control comes in here
  • Some changes were made and people were fired in India recently
  • The Amazon ‘one vendor’ combined seller and vendor central accounts to reduce abuse is key
  • People having stranded stock, listing changes, locked out of your listing needs to be stopped
  • Bad Sellers are buying ‘burner’ accounts and abusing people
  • Vendor Central gives you ‘God-like’ powers over accounts which has been abused by some in our 2018 Round up view
  • People with Seller Central burner accounts, you can buy Vendor Central accounts from China or India
  • China is where the real serious problems are coming from – but Amazon are courting China and turning a blind eye in some ways

Avoid Abuse

  • In China’s culture they don’t worry too much about ToS, they will focus on getting ahead
  • Mostly it’s in the BSR less than 1,000 space – stay in the middle of the pack and products over $20 to avoid these people

Strategy

  • If you’re selling things built in a Chinese factory then you’re likely to hit competition
  • Looking outside of China for products is a potential strategy (i.e. Carpets from Turkey)
  • The more complex the product the better off you will be
  • 2019 branding and differentiation is increasingly important

Branding is the Way Forward

  • Amazon is better than ever – is it saturated and game over?
  • No it’s better and getting better every day
  • You can take $x and turn it into something and all in your PJs if you want
  • The rewards from patents and unique designs will be the way forward
  • Licensing designs will be a big area too with Licensors accepting you are Amazon only not retail
  • If your strategy is to be a ‘me-too’ product and compete with people selling the same product then you are screwed
  • Differentiation, branding and manufacturing your own is the way forwards
  • If you’re branding then you’re not just competing on price and reviews

Sweet Spot on Pricing

  • Kevin does not sell anything under $20
  • Amazon is not all about lower price – there’s plenty of people on Amazon that will pay a premium for a product
  • People will also pay for convenience
  • How much ROI, Profit and can I compete are Kevin’s drivers not the price

Predictions for 2019 – Changes ahead?

  • Advertising costs – Amazon becoming pay to play platform
  • Amazon has about 130 Amazon Private Label Brands
  • For smaller sellers it’s going to become more and more expensive
  • Ranking on Page 1 for some of the more popular keywords will be more costly
  • More of a ‘pay to play’ platform
  • All of the change on Sponsored Ads
  • If the algorithm changes and the Algorithm has no relationship between PPC and Organic Ranking it would be a problem
  •  Google had to change this and separate the advertising from the ranking due to anti-trust issues
  • Amazon will likely keep this link
  • Expect to see more of the big brands coming in and smaller guys getting pushed out
  • Bigger brands are coming in and embracing the 3P side rather than the 1P side and spending a lot more on advertising in Amazon which pushes costs up
  • They are learning more of the Amazon tricks and techniques that increases the competitiveness in the marketplace
  • Smaller sellers advantage is to be able to change a Listing without having to go through the Legal Depts Accounting Dept, etc….
  • Speed of change on the platform is the smaller seller’s advantage
  • Might be more Amazon ‘central approval’ coming for when you want to make a change it will have to be approved before it takes effect to battle this black hat activity

Amazon Market Share Loss?

  • Not likely to see a challenge to Amazon’s dominance in 2019
  • Maybe Instagram or Facebook come up with an ecommerce model but the FBA fulfilment model is trusted and hard to build and compete with
  • Amazon if anything will grow their market share in Europe and wider

Sales Tax

  • Going to be a bigger problem
  • There will likely be more enforcement
  • Amazon at some point will have to start collecting and paying this across 40+ states
  • Steve Simonson has said there’s an announcement coming soon……not sure what!
  • There will be a domino effect once the States start falling

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