The Web Retailer News Digest for February 5th, 2021

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Bezos will become Amazon’s “Executive Chair”. Isn’t that something you sit on?

Over nearly thirty years, Amazon and its CEO Jeff Bezos have grown together. When Amazon was a lowly bookstore, Jeff was a harmless geek. When Amazon expanded into every product category and pioneered cloud computing, Jeff became muscular and dynamic.

And now, as Amazon dominates ecommerce and battles regulators around the world, Jeff looks like a comic book supervillain, expanding his empire with outlandish corporate palaces on the ground while dueling with another centi-billionaire for control of the sky itself (see last week’s digest for more on that).

But this week, at the same time as Amazon’s annual financial results, Bezos announced that he is stepping down as its CEO. He will become “Executive Chair” in the third quarter of 2021, and the little-known Amazon executive Andy Jassy will become the boss of one of the world’s most powerful companies.

We’ll have more on what Bezos’s departure means for sellers soon. There will certainly be no more letters to Jeff as a last resort for sellers stuck with an account suspension!

Amazon 2020 financial results

With the unexpected news of Bezos stepping down as CEO, you might have missed the mind-blowing numbers Amazon reported this week.

Net sales increased 38% to $386.1 billion, while profits increased 97% to $21.3 billion. Third-party sellers sold nearly one billion products through Amazon in the US during the holiday season, and made nearly $5 billion in sales worldwide from Black Friday to Cyber Monday.

Amazon’s financial results do not show the total sales made through its platform (also known as gross merchandise volume or GMV), but it is estimated at a staggering $490 billion for 2020, made up of $190 billion in sales by Amazon and $300 billion in sales by marketplace sellers. This brings Amazon very close to Walmart’s annual sales of $524 billion, and current growth rates mean it is certain to be exceeded in 2021.

Read more at Amazon Investor Relations and Marketplace Pulse.

Other Amazon news

Electronics sellers: FCC information now required

From the end of February, Amazon will be asking sellers to either provide evidence of FCC authorization or to certify that their product is exempt from FCC requirements, for all new and updated listings of “radio frequency devices”.

At first glance, this requirement may only seem to apply to sellers of devices that obviously transmit radio signals like Bluetooth and Wi-Fi devices. Actually, as Amazon helpfully explains, the FCC says radio frequency devices are “almost all electronic or electrical products.”

So, this is one to watch for all sellers of electrical products. More details are promised closer to the launch date.

Read more at Seller Forums – US Announcements.

Amazon cracks down on non-bank disbursement accounts

Sellers who trade on international Amazon marketplaces often use companies like WorldFirst and Payoneer to receive the proceeds from their foreign currency sales. These services offer a better exchange rate than Amazon’s own currency converter, potentially saving 2-3% on every transfer.

To reduce fraud, Amazon has created a new scheme called the Payment Service Provider (PSP) program. Payment companies now need to be authorized by Amazon to be able to handle transfers, and the use of non-authorized companies is being phased out.

From March 1, Amazon will only allow virtual accounts from approved payment providers to be added (as well as accounts provided directly by a bank). From July 15, Amazon will stop payouts to accounts from unapproved payment providers altogether.

A skeptic might accuse Amazon of pushing sellers to use its own currency converter, which earns Amazon extra fees from the uncompetitive rates offered. However, as several companies are already approved under the new program, and others are sure to be added, sellers just need to ensure that they are using one of the authorized providers.

Read more at Seller Forums – US Announcements.

Amazon is standardizing clothing sizes

From February 22, sellers will be required to choose from a predefined list of standard size attributes for apparel items rather than entering free-form text.

It’s surprising that apparel sizes are only now being standardized. There are sure to be some issues as this is rolled out, but it’s clearly been given a lot of thought. A PDF seller guide can be downloaded via the link below.

Read more at Seller Forums – US Announcements.

Marketplace unit sales increase to 55% of total

DC360 has put together a chart showing the percentage of units sold by Amazon marketplace sellers. The trend is gradual, but completely unmistakable, with the proportion of sales made by marketplace sellers increasing from 44% at the start of 2015 to 55% at the end of 2020.

Read more at Digital Commerce 360.

Amazon UK seller news

Amazon has extended the return window for products bought over the holiday period by an additional month. Orders shipped between October 1 and January 31 can now be returned until February 28, providing a returns period of up to five months. The extension has not gone down well with sellers, who live in fear of the returns window staying open until the end of time.

The submission window for Lightning Deals and 7-Day Deals for Spring Deals 2021 is open until March 14. The sale event will run from March 22 to 31, across all European Amazon marketplaces including Turkey. In 2020, Prime Day lasted for two days and Black Friday extended over three weeks. Why doesn’t Spring Deals last for a whole season?

Read more on Seller Forums – UK Announcements about the extended returns window and Spring Deals.

Electric delivery vans go into service

Amazon has begun live testing of its new electric vans on delivery routes in Los Angeles.

The distinctive blue vans, designed and built by electric vehicle company Rivian, will be rolled out in up to 15 cities over the course of 2021. Amazon has ordered 100,000 of these vans in total.

The new delivery vans are part of Amazon’s Climate Pledge, which commits the company to net-zero carbon emissions by 2040. If they could also stop sending out items in massively oversized cardboard boxes, maybe they would only need half as many vans to carry them?

Read more at About Amazon.

eBay news

eBay 2020 financial results

The original darling of the ecommerce industry, eBay, also announced its annual results this week. Following several years of weak performance, the company finally announced healthy growth in gross merchandise value (GMV), revenue and profit.

Annual GMV increased 17% from $86 billion in 2019 to $100 billion in 2020. Revenue (the fees the company receives) increased 20% from $8.6 billion in 2019 to $10.3 billion in 2020. Profit increased 217% from $1.8 billion in 2019 to $5.7 billion in 2020.

Sellers may be justified in complaining about ever-increasing fees and advertising costs, but in an industry dominated by one player, a strong and growing eBay should be good for everyone. Having said that, if eBay hadn’t shown a good performance over a year in which ecommerce exploded beyond all expectations, then they really would have been in trouble.

Read more at eBay Investor Relations.

eBay UK new seller fee discounts

There are two promotions running for new eBay sellers in the UK. The first is zero insertion fees through February for new business sellers who signed up with eBay in 2021.

The second is a rather complicated promotion offering 50 free listings and 50% off final value fees on 50 transactions for new listings created in February. This is only for new sellers who registered on eBay last year, so it is not possible to get both discounts.

Read more at Tamebay for the 2021 offer and the 2020 offer.

Other marketplaces

Walmart ads business gearing up to take on Amazon

Walmart is making a number of changes to its advertising business, covering both its website and physical stores. The company has renamed its ads business and is working with ad tech company The Trade Desk to build a new platform. Walmart Chief Customer Officer Janey Whiteside said it aims to “become one of the top 10 advertising platforms in the U.S. over the next few years”.

Advertising is an important part of Amazon’s business, where it is growing rapidly and is highly profitable. Ads have also been growing in prominence on the Amazon website and have become a necessity for brand owners and private label sellers who want to gain visibility in search results. Will the Walmart online marketplace go the same way?

Read more at Walmart.

“Buy on Google” seller sign-ups disappoint

Six months after Google eliminated selling fees for the Buy on Google checkout system, the program has only signed up 7,400 sellers. Buy on Google allows people to browse and buy items without leaving Google Shopping, effectively making it a multi-seller online marketplace like Amazon and eBay.

Despite Google’s dominance as a search engine, Buy on Google has been described as “virtually invisible” and sellers say that it only accounts for a “negligible portion of their overall sales”.

Google has launched many ecommerce initiatives over the years, but none have made an impact beyond the company’s usual advertising model. Buy on Google seems to be going the same way.

Read more at Modern Retail.

Alibaba 2020 financial results

Amazon and eBay are not the only giant ecommerce companies to report results this week. China’s Alibaba, which runs the Taobao and Tmall marketplaces, has also released its financial results for the fourth quarter of 2020 (but not the full year, as Alibaba’s year end is in March).

Total revenue grew 37% year-on-year for Alibaba to $34 billion for the quarter. The company reported a staggering 779 million active customers, representing an increase of only 3% that suggests a saturation point may have been reached.

Businesses from outside China selling through Tmall Global grew by 60% year-on-year. Just last week, Tmall Global announced that it is enhancing the support it provides to help foreign brands and retailers sell to China.

Read more at Alizila.

Chinese sellers encouraged to stock up in SE Asia

Alibaba-owned Southeast Asian marketplace Lazada is waiving warehousing fees for Chinese sellers for two months starting in February.

The Chinese new year in mid-February will mean slower deliveries from China, so the offer is intended to persuade Chinese merchants to send extra stock to warehouses serving Lazada’s main markets of Thailand, Philippines, Indonesia, Vietnam and Malaysia.

Two weeks ago we learned that 39% of marketplace sales on Amazon.com were made by Chinese sellers. Lazada’s promotion is a reminder that the rapid evolution of Chinese factories from contract manufacturers to direct-to-consumer brands is not just a Western phenomenon, but a global one.

Read more at Alizila.

Mirakl-powered marketplaces grew 110%

French technology company Mirakl, which provides technology for retailers to run their own online marketplaces, has said that the total volume of sales through its platform grew 110% in 2020 to reach $3.1 billion.

Mirakl is used by over 300 companies, including well-known brands such as Kroger in the US, Best Buy in Canada and GAME in the UK.

Read more at Mirakl.

Webinars in the week ahead

February 8: Newcomers to Amazon can learn about fulfillment options including FBA (register here).

February 8-11: UK sellers have plenty of webinars to choose from including sessions on selling customizable products using Amazon Custom (Feb 8), selling to Australia via Catch.com (Feb 9), Amazon’s Private Brands Accelerator initiative (Feb 10) and an introduction to Amazon listing and pricing tools (Feb 11).

For sellers everywhere, Amazon advertising’s global webinar program continues with 23 webinars scheduled, covering Sponsored Products, Sponsored Brands, reporting, optimization and tips.

And finally

Two weeks ago, we learned about Amazon’s mile-long air cargo processing center being constructed in Kentucky.

This week, we have been treated to more computer renderings of outlandish buildings being built by Amazon. “The Helix” will be the showpiece of Amazon’s second US headquarters in Arlington, Virginia. Defying any normal attempts at description, The Helix looks like a reflective silver dollop of whipped ice cream with, um, trees growing in it.

Public tours are to be offered so sellers can see first-hand how their fees are being spent.

Amazons Planned Helix Building in Arlington Virginia
Computer rendering of Amazon’s Helix building planned for Arlington, Virginia.

Read more at About Amazon.

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