“NOTHING IN THE WORLD IS WORTH HAVING OR WORTH DOING UNLESS IT MEANS EFFORT, PAIN, DIFFICULTY…I HAVE NEVER IN MY LIFE ENVIED A HUMAN BEING WHO LED AN EASY LIFE.”
TEDDY ROOSEVELT
Amazon was built off the backs of millions of hard working, creative Third-Party Sellers. If Amazon hopes to continue its rapid growth into the future, it will continue to be dependent on these very same people. Jeff Bezos and his team of executives deserve a lot of credit for guiding Amazon to where it is today. He and the company will also benefit greatly by giving more credit where credit is due—to 3P Sellers. Too many Sellers are denied due process before their listings, their accounts, and their livelihoods are struck down by Amazon. Sure, there is a small percentage of Sellers who are bad actors and for whom systems should be in place to weed them out. But there are far more genuine Sellers on the platform, operating within the Amazon Terms of Service, while also outperforming Amazon in retail sales. Ironically, Amazon’s broken response to punishing the bad guys often hurts honest Sellers first. I often ask myself if Amazon has lost its way, with its authoritarian-style systems, or if it has just evolved into the kind of bureaucratic jungle for which it is named. The answer is probably a little of both.
When a client with a well-known kitchenware brand and several big-name customers tried to register for an Amazon Seller account recently, they were denied. Five months later, after repeated submissions of account documents, Amazon admitted they could not view the totality of the required documents that had been uploaded into their own Seller Central system. After we resubmitted the documents yet again, an Amazon representative told us that the reason the account had been in limbo was because the photocopies were not in color. Wait. What? I’d lived some of these crazy “Catch 22” explanations in the Marines, especially in regard to paperwork. But Amazon was supposed to be different.
Nothing vexes good Amazon Sellers like the dreaded “false positive.” When a handful of bad actors increased prices for essential items during the COVID-19 crisis, Amazon began an ill-conceived AI sweep of tens of thousands of listings targeted for price gouging. One of my clients, Vesta Precision, got rolled up in this mess and was wrongly deactivated—without notice. To add insult to injury, Vesta had actually been reducing their prices over the previous six months. It took six weeks before we were able to get all 12 of their top-selling items re-listed and re-ranked. In the meantime, the company’s premium sous vide cookers and vacuum-sealing products, which had been selling at a record pace before the pandemic, lost sales and rankings, pushing them to the brink of ruin. Luckily, together with specialist and friend Chris McCabe, we were able to get the company’s listings reinstated and re-ranked quickly and in good standing. Many small business Sellers, however, don’t have the necessary resources to fix these kinds of problems—problems that shouldn’t exist in the first place.
I’ve been involved with Amazon for nearly 20 years, and these kinds of complications still vex me. Imagine how new Sellers must feel, with the least amount of experience and fewest financial resources to bounce back. I’ve been increasingly outspoken about these issues over the past few years, using my position of authority on the topic to draw more attention to these injustices and demanding change. I’ve also developed a reputation with Amazon beat reporters as a plain speaker, who isn’t afraid to speak up for Sellers. Most Sellers are terrified of pushing back against Amazon for fear of retribution. I was still a Seller when I started raising a fuss, and I remember that fear vividly. Ironically, taking Amazon to task in the press seems to be the only way to get them to take corrective action. It certainly isn’t going to happen with a support ticket.
Only Amazon holds all of the cards on their e-commerce platform. The Seller is never in control. Our goal in creating The Amazon Jungle Seller’s Survival Guide is to help you succeed on Amazon by being organized in your approach and disciplined in the execution of your long-term survival plan. Creating, nurturing, and growing your own private-label brand on Amazon is the safest, most reliable strategy there is for charting a path through a fearsome terrain. It won’t prevent Amazon Basics from copying your product and undercutting you on price, but if you follow the tactics presented in this Survival Guide for making a great product and merchandising your listings, you can beat Amazon at its own game. Just ask our friend Bernie Thompson of Plugable, who continues to beat the pants off Amazon with his computer docking stations. Bernie is exactly the kind of rule-abiding, professional Seller to whom Amazon should be reaching out to before making hasty decisions that harm its Seller Community.
As I write this final chapter, the entire human race is in the throes of a global pandemic and Amazon is prospering. As brick and mortar businesses and retail stores are shuttered, Amazon and Amazon Sellers are providing much needed goods to help people endure this crisis. Even as the e-commerce giant stumbles with longer delivery times and inventory shortages, Amazon.com is poised to exit this crisis stronger and more powerful than it was pre-pandemic because there is no other online retail platform that comes close to their resources and services. But there are dark clouds on the horizon.
Over the past few years, antitrust lawyers and policymakers have been circling the giant, and for good reason given their growing market share. As consumers in a free country, we have to ask ourselves whether one company with the power of Amazon is good for American consumers and small businesses? While I’m no legal scholar, I do have a couple of recommendations for our policymakers that I’ve spelled out below.
In Chapter 1 I talk about how Amazon skirts the truth in its sales reporting by only disclosing the fees it charges 3P Sellers, rather than the full retail value of goods sold on their platform, known as Gross Merchandise Value (GMV). Considering that more than half of all Amazon sales are third-party sales, the sum value of what’s not being reported is colossal and, when factored into the full equation, would reveal the true size and power of Amazon. It’s high time that Amazon, and all public marketplace companies, share the true GMV with the public and its investors. Without this information, and without a legal requirement for Amazon to comply, how can we even begin to answer the question of monopoly? Our policy makers should require Amazon to share their sales numbers so that we can make apples-to-apples comparisons regarding just what kind of power they hold in each of their product and service categories. For example, what is Amazon’s market share in the Toys category or Sporting Goods? What is Amazon’s market share of total retail when you subtract out things Amazon doesn’t sell, like automobiles. Let us see for ourselves whether the 4% of U.S. sales figure that Amazon management regularly throws out in the press is true and accurate. I certainly am not fooled.
Jeff Bezos built Amazon on the principle of customers first. Low prices and supreme convenience are two obvious ways Amazon lives up to its customer obsession. But what about safety? As a result of the 1996 Communication Decency Act (CDA), Section 230, Amazon, like Facebook, cannot be held liable for untrue, misleading, or unsafe products sold by users of its platform. Just as Facebook blatantly shirks responsibility for misleading and fact-less political ads on its platform, Amazon claims no responsibility for counterfeiters selling unsafe and harmful products on theirs. If Congress would act immediately to amend or eliminate Section 230 of the CDA, allowing injured shoppers to sue Amazon and win, I’m absolutely certain Amazon would find a solution to this problem with the speed and accuracy of Prime Now.
Most Sellers I know believe Amazon has too much power. Although Amazon management has publicly stated that Sellers can go elsewhere to make a living, I can tell you that they can’t, if they want to grow a successful online business. When I sold the exact same product on other online marketplaces, the sum total of my sales on all of those platforms combined was less than 10% of our Amazon sales. These included reputable retailers, like Walmart.com, Sears.com, Jet.com, Rakuten, eBay, Newegg, and Houzz to name a few. All of them together still only amounted to a small fraction of our Amazon sales. Nearly every Seller I talk to has the same story. With Amazon, we’re dealing with something truly unprecedented and it’s nearly impossible to survive without them.
Earlier in the book I shared part of this quote from Charles Munger, an American investor, business man, former real estate attorney, and philanthropist. He is also vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett. Mr. Munger himself said that there has hardly ever been anything like it [Amazon] in the history of our country. He went on to say that he would not have predicted the success that has happened, and now that it has happened, he said he wouldn’t want to predict that it was going to stop either.19 With power comes great responsibility, but also the potential for corruption, even by the most well-meaning individuals or groups. I would like to think that if Amazon took a hard, unbiased look at just how much Third-Party Sellers have helped them get to where they are today, they would #DoBetterAmazon. Sellers deserve it.
I wrote this book for two reasons. I wanted to share my truth about Amazon and its ways because for 17 years I was a Third-Party Seller with indelible bruises to show for it. I know the kind of hardships Sellers face, and I know what it feels like to skip a paycheck (or more) in order to make payroll for your team, after your listing was unfairly pulled by Amazon. I’ve been there, and I learned the hard way. In the Marines we had to be flexible—always. “Semper Gumby” is a play on Semper Fidelis, which means “Always Faithful.” When Captain Jay Farmer of HMM-264 actually flew with a Gumby character toy mounted on the instrument panel of his CH-46E, the term, first used in the mid-seventies, was popularized and a reminder to literally be flexible to survive. Success on Amazon, however, requires more than good faith and flexibility, which brings me to the second reason I wrote this book.
I want to help you build a winning brand. Rick Cesari and I both know what it’s like to create a product and a company from nothing; products that provide value, meaning, and style in the marketplace. We’ve both experienced the deep satisfaction of connecting with customers whose lives are better because they bought our products. By listening to their demands and following their recommendations, we are making a positive difference on and off the Amazon.com platform. By following the strategies in our Seller’s Survival Guide, you can too.
Amazon may be big and scary at times, but with the right strategy it’s still the best place to launch, list, and learn about your product in order to perfect it. Once you make those critical product improvements, expanding to other online sales channels and retail stores is much, much easier. Before I’d fully exited my Amazon business and transitioned to Avenue7Media, I kept getting calls from major retailers like Home Goods and Wayfair, even though I was no longer actively looking to sell to them. They found my brand on Amazon because my brothers and I had done things the right way, with the right strategies, and with great, quality products that customers raved about even after we were gone. With the right strategy, some grit and determination, you too can begin your business on Amazon and watch it grow far beyond the limits of the everywhere store.
Third-Party Sellers are the untold story of Amazon’s success. By building an enduring brand—one that is recognized on and off the platform—your voice will be amplified and, eventually, Amazon will listen. Rick and I have created a list of resources on the next page to help you get started. With these tools, plus the sales and marketing strategies we’ve shared in this book, we believe you have what it takes to navigate the Amazon Jungle and clear your own unique path to prosperity. Now go build the next great twenty-first century brand!
To engage with Jason regarding Amazon managed services or for consulting projects, please visit www.Avenue7Media.com.
To contact Jason about media appearances, podcasts, or speaking at your event you may reach him at info@avenue7media.com or via linkedin.com/in/jasonrboyce
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