Amazon VP Tom Taylor Discusses Issues Impacting Sellers
By Ina Steiner
Amazon.com Vice President Tom Taylor is responsible for Amazon Webstore, Amazon Payments and Fulfillment by Amazon, and he told EcommerceBytes this week that he's finding sellers are not using one of these services - they're using many of them in combination.
Taylor was speaking on a panel with two online sellers at Etail West on Tuesday. One of the merchants, ZooStores, has experienced higher conversion and higher average order value (AOV) when using Payments by Amazon in conjunction with Product Ads rather than Amazon Product Ads alone, according to Taylor.
Having been with Amazon for about 10 years, Taylor said he's seen a lot of growth in Amazon's seller business which has been very exciting, he said. In terms of data about Amazon's services for third-party sellers, Taylor said he loves that data to come from sellers, such as the kind ZooStores shared with attendees of Etail West. "That's most credible and the most powerful data you'll hear," he said.
But Taylor did talk about a range of issues of interest to online sellers, and explained that he's working to figure out where to double down his efforts to help sellers grow their business, which helps Amazon's customers in terms of a growing selection.
Amazon and Mobile Payments
In terms of mobile payments, everyone is seeing the growing use of commerce over mobile devices, Taylor said. "Amazon's view is that it's just one other way to present information to sellers, so we see it as an important way to meet our sellers' needs."
Checkout by Amazon is optimized for mobile payments for both phones and tablets, and sellers are seeing good use of that. "It's our story of, "your brand, our expertise," and how do we help sellers connect with Amazon customers using our technology."
Do sellers necessarily think of Amazon for mobile payment processing, and is Taylor trying to reach sales that take place off of the Amazon platform?
"Absolutely." Taylor said. Amazon is a very customer focused company, and "when we ask consumers, "where are you buying things," Amazon itself is a very small percentage of that total." Amazon Payments is asking consumers where else they would like to shop and have all the advantages of the trust and convenience of having your shipping addresses available, your credit cards available, Taylor said, and many of those places aren't Amazon itself. And they don't have to be physical goods - they can be digital items, they can be donations to charity. "So Checkout By Amazon is pursuing all those opportunities," according to Taylor.
Same Day Delivery and Amazon FBA Merchants
Is same day delivery possible, or even a goal for Amazon? "We all believe customers want things faster and faster," Taylor said, but as Amazon's Chief Financial Officer Tom Szkutak said in a recent earnings call, "we don't yet see an economic model that works in the U.S., but certainly in other countries such as Japan, Germany and the UK, Amazon actually does offer same day delivery."
How does this impact the online merchant using Amazon's FBA service to store inventory and fulfill orders? "Whether you're doing it yourself or using Amazon, you need to figure out how to get your inventory closer and closer to your customers," Taylor said. "Amazon's fulfillment network is a very powerful way to do that."
When asked whether sellers have to break up their FBA shipments to send to multiple warehouses more so than in the past, Taylor said that logistically in the U.S., sellers have two options. They can let Amazon guide them into where to send their inventory, or they can choose to send inventory to one warehouse (without splitting the shipment) and then pay Amazon an additional fee to move the inventory around. "The good news is there's always a genuine savings in the total supply chain between that seller's manufacturer and themselves and us."
Conditions at FBA Warehouses
Sellers who participate in FBA have a vested interest in knowing about conditions at fulfillment centers, both in terms of product integrity (climate control, for example), and in terms of conditions for workers. We asked if Amazon makes available such information to FBA participants, and if not, if it was something they might consider for the future.
Taylor said in terms of warehouse capabilities such as climate control or high-value items, Amazon does share that with sellers. "In terms of working conditions, Amazon strongly believes the safety of our employees is the absolute number-one item, and I think things start from there for us. Other than that, I'm probably not the right guy to answer questions about working conditions."
Amazon Repricing Tools
As many EcommerceBytes readers may know, some merchants use repricing tools on Amazon to help them optimize their margins and to help win the Amazon Buy Box for increased sales. When asked if he had any tips for Amazon sellers on using repricing tools from third-party vendors, Taylor said, "I don't. But I can tell you, customers like lower prices."
Amazon is aware of a lot of different tools that third-parties use to help price, he said. "Customers like low prices, selection and convenience, so where we can help sellers get a good low price, we're trying to provide tools both directly and through these different types of service providers to do that."
Returns Processing Fees
Amazon charges merchants a Returns Processing Fee in selected categories where Amazon's stated policy offers free returns to customers, explaining that the fee helps offset the additional cost incurred for offering and processing free shipping for returns. But merchants are concerned about categories such as clothing, accessories and jewelry where there are high return rates.
When asked about those issues, Taylor said, "From a consumer point of view, you don't want to have to have a customer try to figure out who's got what returns policy. So we feel it's very important we have a consistent policy across all the different sellers on Amazon's marketplaces. So that's why we've always had with Amazon Retail and Fulfillment By Amazon items a consistent returns policy."
"And yes, it is true in certain categories such as clothing you may see a higher returns rate. Even within clothing, some may have higher return rates and others may not - it really does depend on the products. There's no one sweeping statement that works for all sellers."
"But we want sellers to understand that they're receiving a benefit of a good customer experience on our marketplace, and everybody gets the advantage."
Synergies of Using Multiple Services
Taylor said he's very excited about how sellers are putting together the spectrum of services Amazon offers and seeing the benefits sellers are deriving, and gave an example of a seller with their own website.
"For them to use Product Ads to take advantage of Amazon's 200 million-plus customers, and then combine that with Amazon Payments, and now get that high conversion rate - now they're seeing a real synergy, a real benefit of those two things together. Then they could choose to add in Amazon Fulfillment for their scalability and this faster and faster shipping. It's very difficult for a medium-sized seller to be really effective at the 2-day shipping," he said.
"So we're very excited at what we're seeing sellers put things together in terms of Product Ad, Payments, and what we call multi-channel fulfillment, and we look forward to keep investing in those things. And the reason we do it is in the end, the Amazon customer is getting the greater experience of selection and convenience by having all that done behind the scenes by Amazon, and let the seller focus on what they're good at."
Amazon Product Ads and Google Shopping Ads
We couldn't pass up the opportunity to ask Taylor what Amazon is seeing in regards to the impact of changes on Google Shopping for both Amazon and for its merchant customers.
"We've heard from some sellers that they've been impacted from Google Shopping," but he said there wasn't much he could comment on from Amazon's view.
When asked where in their budgets sellers were taking their Amazon Product Ads dollars from and if they were taking money away from other marketing expenditures, Taylor said typically sellers don't want to share that information with Amazon. "Sellers do tell us that they find Product Ads more economically efficient than other channels."
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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