Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu May 9 2013 09:19:37

Is Amazon Giving Away Your Secrets?

By: Ina Steiner

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Online merchants work hard on product sourcing, and when they can find a popular item that no one else is selling, they can reap the rewards. Unique products mean no competition and no "race to the bottom" on pricing. But Amazon is making that strategy more difficult for sellers.

Amazon sent out letters to a large number of sellers at the end of April telling them about a new program called the Amazon Virtual Account Manager program (VAM) that offers personalized coaching. In its letter, Amazon wrote that sellers would benefit from a direct relationship with the Amazon Services team, "connecting you with the right business development opportunities and suggested improvements to increase your selling potential."

Now Amazon is following up on that initial email with personalized advice for members of the VAM program in emails with the subject line, "Add offers to in-demand items on Amazon." An EcommerceBytes reader sent a second such email she had received that started off with the following message:

Hello from your Amazon Virtual Account Manager (VAM). Last week, we let you know of an opportunity to add offers to in-demand items that are only being sold by one Seller on the Amazon Marketplace. Here is an updated list.



The email contained a list of products in her category that only one seller carried - Amazon listed the items under the headline, "Top ASINs with only one offer this week." The idea was to encourage her to also sell those items, but her reaction was not one of gratitude for the tip.

"I was correct, they are encouraging my company to list items that are for sale by other sellers," she said. "And presumably they are encouraging my competitors to list items in cases in which we are the only seller. This just produces a race to the bottom pricewise, and everyone, including Amazon, makes less money. Seems to me it's a classic case of cutting off your nose to spite your face."

The reader was concerned that Amazon was also sending her competitors emails containing her unique items. For sellers who spend a lot of time and energy researching and sourcing so they can have an edge over the competition, it's disappointing to learn Amazon is sharing that information with their competitors.

Here's the rest of the letter she received from Amazon VAM:

As a reminder, here's why should you add offers to ASINs with a single current offer:

- It gives you a great chance to win the Buy Box for that item (keep in mind that only Sellers that qualify for Featured Merchant Status can win the Buy Box).

- Adding an offer to an ASIN with one offer increases the likelihood that a customer will see and purchase that item.

Check out this report daily in Seller Central for a full list of updated opportunities.
Regards,
Amazon VAM


Sellers have long been concerned that Amazon uses their sales data internally to compete with sellers directly - it's one of the top concerns among merchants of all sizes. But to learn that Amazon is sharing that data with competitors gives them a whole new area to worry about.

Sellers have also been concerned that eBay category managers share their proprietary sales data with its top sellers.

Not only can merchants use such data on the marketplaces that provide them with this information, they can also use it to populate their stores and across all the venues on which they sell.

Do online marketplaces share such data with you, and do you wish they would? Are you concerned about Amazon (and eBay) sharing such data with your competitors?




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Readers Comments

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by: pace306 This user has validated their user name.

Thu May 9 11:33:39 2013

Im not sure why anyones suprised .. AMazon does this themselves and has been for years.

EVERY ASIN is run through a program everyday, almost every hour. If Amazon feels that the item ranks too high - they but the item from a similar source and kick you out of the box. Its happened to me DOZENS of times.

Amazon also kicks you out of the box if they "just want to" even if hey dont have the item (place an order and wait a few days till they get it in stock).

Its a business and its thier sandbox - Amazon is known for making selling things there HELL. Thats why eBay (if they had ONE brain amongst the lot of them) could/should make it easier and get sellers who are eager to "go somewhere else besides Amazon" "home" on eBay. Shame is that eBay puts as many stumbling blocks in your way as Amazon does - different ones to be sure but just as many.

eBay has thier insane VERO dept, their crazy picture fetish, thier obsession with killing thier small dealers, their infatuation with rewarding poor large sellers and of course the magic invisible DSR scheme.

Amazon blocks entire items and sections, plays favorites with certain sellers, ignores thier sellers return policies and worse ..

Neither is perfect, but if you can balance both nutjob selling platforms - you can do ok.

This line though is NOT correct "This just produces a race to the bottom pricewise, and everyone, including Amazon, makes less money" Amazon unlike eBay makes the same VIG no mater what the price. Its eBay that gets higher FVFs when the prices are high!

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This user has validated their user name. by: Rexford

Thu May 9 11:40:28 2013

Just like eBay, they are in it for themselves.  Neither cares about the individual seller, only their own bottom line. It is my opinion that either company will throw anyone under the bus in a heartbeat for their own gain.

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This user has validated their user name. by: Forestt

Thu May 9 12:28:15 2013

I sell on both eBay and Amazon. Neither platform is a friend of sellers, however, I do respect Amazon's fee structure being completely upfront. eBay's fee structure is not unlike a rat maze.

Another thing in Amazon's favor is their customer service is excellent. Amazon also attracts more educated, non-confrontational buyer and rarely do you end up with problematic bottom feeders like you do on eBay.

As for ''secrets'' as this article alludes to Amazon giving away...I guess if you're selling goods in a public place, it's not really a secret. Although I do get a bit frustrated with the Amazon ''race to the bottom'' pricing. As someone who sells CDs and DVDs, it never ceases to amaze me how some of these Amazon sellers can sell brand new CDs for less than one dollar? I know they get cut rate postage if they have a bulk account with USPS but honestly, 20 cents profit across a million items sold doesn't even seem worth it when you factor in storage costs, manpower, etc.

Many times, I list a CD or DVD on eBay and get $5-6 for it even though the buyer could have got it for .01 cent with $2.99 shipping on Amazon. On the other hand, with  rare items, Amazon buyers will generally pay 20-50% more than eBay buyers.

I guess in the end you have to think about both marketplaces, price accordingly and let the chip fall where they may.

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This user has validated their user name. by: Ming the Merciless

Thu May 9 15:28:12 2013

On the scale of despicableness, Amazero is just barely behind ebafia.

When it comes to us, these companies profit the most from low margin, high volume sales. So this is what they're going coerce, con, and otherwise pressure you to do.

You will lose, and they will win. When you filed bankruptcy, they will be thriving and their CEOs making multi millions annually.

These shark CEOs no longer subscribe to the concept that businesses thrive when their customers thrive.

They don't care whether we lose money or not because their objective is for them to make as much as possible by any means possible.

Playing the low margin, high volume  game with them ultimately will end your business unless you're selling hundreds of thousands of units annually.

The only venue type solution would be a huge seller's co op of, by, and for sellers.

Until this unlikely possibility happens, ebafia and Amazero will continue to squeeze everything they possible can from your wallet. Only in ebafia's case, it's often downright theft.

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This user has validated their user name. by: Anonymous Annie

Thu May 9 16:08:31 2013

Ming writes: ''Playing the low margin, high volume game with them ultimately will end your business unless you're selling hundreds of thousands of units annually.''

So basically, my new business motto should be: ''I sell everything for LESS than what I paid for it... but I make up for it in VOLUME!''

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This user has validated their user name. by: Ming the Merciless

Thu May 9 21:17:54 2013

@ Anonymous Annie

Yes! It's the business model that both want 3P sellers to adopt.

Both see the race to the bottom as a good thing for their profitability, and they won't be satisfied bottom is reached.

That Amazero email message Ina shows simply reeks of transparent self interest, but it will have undeniable appeal to the short sighted which is exactly what they're counting on.

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This user has validated their user name. by: Anonymous Annie

Thu May 9 22:49:06 2013

Ming... sometimes I'll walk away from those low-low-LOW deals that I see on Amazon.

Sure, I like to save money and get a good value... but at the same time, an extra low price makes me wonder if the item is used or ''reconditioned'' or returned merchandise.

I also worry that a 3P seller who's selling so low might not be around to handle any issues... or that he's such an inexperienced (or such a desperate seller) that maybe he doesn't know how to give good customer service, or pack properly, or ship promptly.

In general, it's a warning flag... and I'll choose a higher price that's still a good deal. The seller profits, I get a fair deal. The old adage ''you get what you pay for'' is often true.

I know I'm probably a rare-bird when it comes to things like this... but surely I'm not the ONLY one.

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This user has validated their user name. by: Sandymenu

Thu May 9 23:31:35 2013

My ((((( dearest )))) Ina, I chose and went ahead and joined, listed and SOLD 25 books-music cd/dvds with ADDOWAY on Sunday 5/5th and thanks to YOU, I've hit JACKPOT within ''our'' ongoing business tactics by focusing on the BIGGER PICTURE (and we're not talking about dada-gaga chewing on a pork bone at that 5-star happy meal restaurant either) my clever EB journalist!

As you know (from previous blogs) I was deciding whether to join Addoway, AMZ or Ecrater due to all these EBAY ''affairs'' right?

Well, I did just that!

I avoided AMZ because of all the changes they also kept doing to keep up with EB and I definitely avoided Ecrater because those poor babies stranded on the moon wishing on a star to save them (se' habla espanol too,?) forum folks are as ???? as beef jerky.

I knew I wanted to keep a FEW high-end items on the EB site but really had a need to shift some of my ''musical techniques'' somewhere else and I from most of the comments within several blogs here concerning Addoway, it became a reality of which NEW SITE to discover and I went with Addoway and already sold 25 items there just THIS WEEK.

At the end of the SEARCH DAY, it all hard-boiled eggs down to CONSUMER DEMAND and WHERE those products will become available for certain buyers.

Sure, you can choose to list your ten-cent red clown shoes on the ponderosa site OR go with the wishful criss-cross moon pattern site that suspends your BOOTH when you open it due to ONE word (Lord prey-tail) but with Addoway, it is just that} the Middle-Man to true eCommerce delights!

I am SO GLAD I did NOT go with Amazon as my NEXT move and I (and many others) wish to THANK YOU for being so savvy with this newest topic!

Poor dada gaga, his new bib has denture stains all over this new fabric.

INA ROCKS 2013!

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This user has validated their user name. by: elpereles

Thu May 9 23:40:32 2013

Another company. Same "evil" ideas.

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by: tb This user has validated their user name.

Fri May 10 00:37:45 2013

It's hard to blame Amazon. THEY are in business to sell, YOU are in business to sell. Since they have access to all your sales information, they'd be stupid not to pick out the hot sellers and sell for themselves.

You've got a real hot seller on Amazon. Nobody else around. You're selling for more than list (to cover your fees). You keep selling out buying more and more product until one day you see Amazon selling it themselves. Just when you bought a large quantity of inventory too!

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by: FREDDY This user has validated their user name.

Fri May 10 08:51:52 2013

Amazon has been taking your products if they are a high mover. Happened more than once. And yes, as said prior, just when you purchased a large inventory.  As far as giving away ''secrets''. Years ago when I was more active on Amazon, I regularly rec'd email with a list of items, ASIN, pricing, and even the number showing selling rank. So I do not believe it is new. Frustrating yes. Morally right - all depends on your morals.

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This user has validated their user name. by: Rexford

Fri May 10 09:57:13 2013

Forest is exactly right using the phrase "race to the bottom".  No wonder brands don't want their products sold on these marketplaces.

And Annie says "but at the same time, an extra low price makes me wonder if the item is used or reconditioned or returned merchandise."

Annie, you left out stolen.  :)

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by: pace306 This user has validated their user name.

Fri May 10 11:26:32 2013

The stuff isnt used or stolen ... when you are direct with a manufactorer and a fairly large player - you get back end monies and coop.

Ive been a buyer in the elctronics field since 84 and worked for ALOT of the big guys ... It works like this:

1) there are "contracts". Basically its free goods or money thats given when a manufactorer commits to having a specific seller carry thier goods. In Best Buys case its thier 2300 stores, in Radio Shacks case its thier stores being in every mall, it a smaller dealer like Datavision its thier retail location on 5th ave in NYC across from the main library. It comes out of thier advertising budget and ALL sellers have these contracts. Pro buying groups sometimes fill in for a manufactorers distributor and they get a few % as well.

Beyond that is a straight coop program which is DFI (deduced from invoice).

That means that the sheet price they "pay" when they purchase goods are ot even close to what they end up paying - and if you DONT get those funds - you cant compete. The people who sell 10000s of skus on Amazon (and eBay) have those deals and use all the back end funds to lower the cost of the goods so that they can "get the box".

Car Audio manufactorers (Pioneer, JVC, Sony) are even worse - beyond the 2 above mentioned sources for money they have "word of mouth driven off sheet deals". Unlike regular manufactorers they ALWAYS try to have empty wharehouses by the end of a month and load you up with those kinds of deals the last week of each money. Pioneer for example will give you 9-15 off sheet plue the above monies plus demo product plus god knows what else - to move goods.

I was interviewd 3x to be a buyer at Amazon - so what I can tell you is this .... as I mentioned above - EVERY ASIN is monitored all the time.

Good movers are noted and Amazon moves in when they feel they can and they take the box from you PERIOD. Amazon sends all sellers emails about popular items that they think you should be fullfilling - so of course they are other peoples items (as well as thier own). When an ASIN hits a certain target (popularity ranking) Amazons purchasing module shoots out a purchase order to the vendor with the terms they want on it - and the pricing. Dont laugh that Amazon decides what they want to pay - Walmart does it too.

Its thier sandbox and they make the rules. If you have a great product and are direct and own it at the "right" cost you can sell a boat load, if you have a closeout or can get hard to find items - then you too can make money ... you wont though on selling ipods/ipads!

Small sellers have 1 advantage - they can act FAST when something happens, Amazon and others are larger and slower.... use it to your advantage!

(and again eBay knows all this and should have created thier site and opportunities to take advantage of how this all works but as usuall ... epic fail on thier part)

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This user has validated their user name. by: Ming the Merciless

Fri May 10 15:18:33 2013

Not too long ago the FBI considered ebafia to be the largest single sales platform for stolen goods.

I don't know whether this is still the case, but in one of the categories I sell in I see many goods that I'm reasonably certain are stolen.

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by: Moonwishes This user has validated their user name.
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Fri May 10 15:49:10 2013

>> I definitely avoided Ecrater because those poor babies stranded on the moon wishing on a star to save them (se' habla espanol too,?) forum folks are as ???? as beef jerky.
<<
As an ecrater seller, I have no idea what you are referring to. your statement makes absolutely no sense at all. There are many terrific sellers on ecrater. Yes, there are also some fruitloop ones but no worse than ebay from what I can tell. At this point I've had over 3700 ecrater sales. Won't say how much I cleared through them as I would prefer no one else join in selling what I do. I also now sell on amazon. I don't have a bit of a problem with either venue. Nor am I in a race to the bottom on prices. Many times when I make an Amazon sale I check and see that  I was charging 2 times as much as other sellers, but I got the sale. We only race to the bottom if we allow ourselves to.

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by: Will This user has validated their user name.

Fri May 10 18:31:35 2013

This VAM program is not new (sort of). Amazon used to send emails stating that they noticed I sold exact or similar items in the past, but have not done so in awhile. The email would go on to state that specific items are in demand, but currently not in stock with 3rd party sellers and I should consider selling them, if possible. However, it never listed other seller's items like in the above example.

I always liked getting those messages. It had been quite awhile since I'd received one.  



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