Sunday, July 20, 2008

Quick Hits from the Amazon Seller Conference

Here are some quick take-aways from the morning meetings:
  • Amazon wants to be in every category you can imagine, but it takes time to roll these categories out. My note to eBay sellers, who feel they don't have a place on Amazon at this time - they are working on it and your time will come.
  • They envision some categories that are strictly 3rd Party sellers where Amazon doesn't have a retail presence, this will happen more in international markets but is something they are considering.
  • They hope to facilitate the list once-to-all listing strategy at some point in the future. Basically if you are in the US and list your items as being available internationally then they will be available on those international sites. This functionality is not available now, but they are looking at how best to implement it.
  • There are 79 million active user accounts on Amazon.
  • 1.4 million sellers accounts and for the first time this number is actually bigger than eBay's number of 1.3 million sellers accounts.
  • There are plans to open China and India to 3rd Party sellers but the time-lines have not been finalized.
  • Low Price, product selection and Marketplace trust are Amazon's three keys to an excellent customer experience.
  • Additional categories opening up this year are: Industrial & Scientific, Golf products (in the Sporting Goods category) and Tires and Wheels (in Automotive Category).

Trust and Safety observations:

  • It is obvious to me that Amazon cares equally about the buyer and the seller and the only differentiation is when sellers do not excel.
  • Amazon actually stops Buyer fraud before the seller even sees a "Ship Now" order. Sellers on Amazon never have to worry if they are going to get stiffed on an order.
  • Less that 3% of all feedback left on Amazon is negative, which is pretty amazing to me.
  • Feedback is left for 19% of eligible orders in the US
  • Seller performance management revolves around Order Defect rate which includes Negative Feedback as a % of total orders, A to Z Claims as a % of total orders and Charge Backs as a % of total orders. Amazon wants to see a less than 1% order defect rate. The vast majority of sellers are well below 1%

These are just some of the things that stood out to me this morning and I'll add additional items as I come across them.

Amazon truly partners with sellers and works to protect them from buyer fraud, but they have a high standard for performance.

In contrast eBay seems to view seller performance as the problem with the marketplace and many of their changes are considered punitive rather than constructive. It may just be a difference in perception but Amazon actually considers sellers to be customers/partners while eBay talks-the-talk and just appear to walk-the-walk.

Just my 12%

13 comments:

Anonymous said...

The problem with Ebay executives is simple : it's a bunch of monkeys crossed with a bunch of autists, thinking that by injecting some Harvard MBAs DNA into that mix will create uber experts in retail. Too bad that fails with real life. Just a bunch of arrogant losers who need to loot a clue about online retail.

ms.pat said...

anonymous - don't worry - I'm convinced they're going to get their "comeupence" and pretty soon!

Randy - can you ask Amazon to please please put in a serious art section - even if it is fixed price? They had it years ago and now its just gone! We ebay refugees need a place to go and there are plenty of artists who are wishing Amazon would open up to them.

Henrietta said...

Most interesting.

I only know Amazon as a buyer, spending far too much, too often, oops. I have only had one bad transaction and I was refunded.

Now that I know how Amazon feedback works I am careful to always check 5 stars & say yes on the bit about arrival within the time frame because there is no way it can be achieved given where I live.

I find your insights on the River fascinating, thanks.

nadine said...

Randy, you say that Amazon is working on new categories. Will that include antiques and other items without UPC codes, or are they concentrating on new manufactured goods?

REJOICE Music said...

Great update - thanks! LOVE your blog - it's on my morning reading list daily. Your post about FBA started me selling on FBA and its been going well - thanks again!

Quick question - you've been to many eBay Lives (and I imagine other top seller conferences). eBay execs always SEEM to be caring and willing to listen - how do the Amazon execs differ? How do they demonstrate, unlike eBay, that they really do walk the walk?

Randy Smythe said...

Nadine,

They basically said every category, but did not go into the no UPC issues. I will be at the Amazon headquarters this morning and I will see if I can get any additional info.

Rejoice Music,

Amazon execs are very open to discussing issues; just rarely details.

I was commenting to a friend yesterday that I feel like I did in the early days of eBay. I actually know more executives and employees at Amazon today than I do eBay execs and employees.

My new business feels an awful lot like the early days of Glacier Bay. Amazon execs no what they want to be when they gromw up.

Here is the focus at Amazon: Customer, Seller, Investor. At eBay it is: Investor, Customer, Seller

nadine said...

Here is the focus at Amazon: Customer, Seller, Investor. At eBay it is: Investor, Customer, Seller

But Randy, at Ebay the Sellers ARE the Customers - that is the most baffling thing of all about Ebay's mindset.

With every other business I have ever dealt with, they were aware that the person who sent you money was, at the end of the day, your customer. eBay management has unilaterally decided that those who send them no money are their customers, while the paying customers are actually their servants. You could call them employees, except employees get paid.

Wouldn't you love to skip 10 years in the future and read the convention wisdom on the rise and fall of eBay?

Tony P. said...

Here is the focus at Amazon: Customer, Seller, Investor. At eBay it is: Investor, Customer, Seller

Back a couple years ago, Amazon was struggling a bit and its stock was at $30. Around that same time they announced some major expenditures into their computer infrastructure and introduced the Prime program. Their stock dropped to $26 and *slowly* moved upward over the next few months.

What they were doing was the exact opposite of what ebay was doing - investment for the future. It was still a ball-sy move; the ecommerce market is fickle and if a downtrend in online spending had occurred, the Amazon might have dried up.

The Street never wants a company to spend money, even for forward-looking purposes. They'd rather have the company make loads of moola without any expense (ebay's business model!) and issue LARGE dividends. Have Cake and Eat It Too mentality.

I took a chance, just like Amazon did, and got in at $26 and change. Wish I'd have taken a much bigger chance. :-)

Anyway, Amazon seems to know that if they do whatever is necessary to improve business, the Street will get their cake, in the end. Ebay, on the other hand, seems to take extreme measures to add all sorts of fancy icing to a faux cake. And the Street eats it up. (pun intended)

Ebay's apparent Prime Directive appears to be, simply to pump up the stock. I admit I am biased where they are concerned, but in my best 'neutral view' it looks like they don't give a damn about the actual business, just the stock price.

The only reason to have such a modus operandi is for the stockholders to garner a hefty profit. The fact that some of the top-level executives are also some of the largest stockholders, places a dense cloud of smoke over the entire operation. I have no doubt that a raging fire is at its core.


Randy, any word on Amazon's Q2 report? If they have really Good numbers, it will squelch the talk about the "macroeconomic" effect upon ecommerce. If they have Great numbers, even ebay's BS about the economy will be blown out of the water.

I'm hoping they have Really Great Kick-Ass Numbers! And not just for their stock price - that's MY icing, baby!!!

Randy Smythe said...

Tony, no clear info on Amazon's Q2 earnings but it is looking like a beat at least on the top line.

Their margins may not be great so the share price may not move that much but they are still growing the top line way faster than ecommerce which disputes eBay's "economy" argument.

Beady Eyes said...

Randy,

Can you ask them when we can expect Webstores to be open to media sellers? I hate my Prostore and want the convenience of using Amazon's catalog assets vs. doing all the title entries myself :(

Randy Smythe said...

Beady Eyes,

They are open to media sellers now but you will have to create your listings and upload images.

There is a long convuluted answer as to why but unfortunately you have to create your own images and listings.

If this changes I will let you know.

RKS

Randy Smythe said...

There seems to be some confusion about my comment regarding categories.

Amazon wants to be the place to shop for anything on the web but it doesn't mean they want everybody and their brother selling there. They will control each category to manage supply and demand as well as quality of merchandise and seller.

Just because they start opening up additional categories doesn't mean they will be open to everybody.

Amazon is a controlled marketplace. If you do not like that it may not be for you, unfortunately eBay is now trying to do the same thing so the only place where you will be able to control your own destiny, to a degree, will be your own website.

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