As you can find in the full report, here are some other news pieces I didn’t elaborate on but still found interesting. I’ve shared my thoughts on the linked articles, which come from various sources. I hope you find them interesting! Let me know if you think I missed anything big.
The Challenges of Attracting and Retaining Sellers for Amazon and Temu
Not every Amazon seller is the same, but many sellers are worn out. I think that’s something the article missed.
In my opinion, Temu’s challenge isn’t just attracting Amazon sellers—it’s attracting the right ones. Is there any value in adding the 1,000th seller offering private-labeled widgets sourced from Alibaba? I don’t think so. However, bringing in strong brands that customers actually care about could be a game changer.
Amazon sellers typically have two big complaints: fees and seller support. If PDD has cash to burn (which seems to be the case), the fees issue could be solved quickly. Currently, referral fees on Temu are significantly lower than on Amazon. Seller support might be trickier, but I don’t have personal experience selling on Temu (I’d love to hear stories from those who do).
Amazon will eventually focus more on seller retention. Of course, most sellers considering Temu will likely continue selling on Amazon. But seeing strong, exclusive brands open a Temu seller account could be bad news for Amazon.
The company will need to do more than just add gimmicky features such as (as mentioned in the article) “showing images to help users narrow down their search, the ability to add text prompts to uploaded images, and ‘More Like This’ recommendations.” Walmart and Temu are moving fast, and are getting better by the days.
“Amazon and Temu Copy Each Other in Battle for Sellers“ PYMNTS.COM 10/6/24
https://www.pymnts.com/news/ecomme rce/2024/amazon-and-temu-copy-eachother-in-battle-for-sellers/
New AI Tools to Create Amazon Ads
Authenticity will be the name of the game for brands in 2025.
Amazon just announced new AI tools for advertisers, and the videos showing off these features are pretty impressive.
But if everyone has access to these tools, will the content still feel special? Or will watching these videos feel like reading AI-generated LinkedIn comments?
Now, I’m not saying this is a bad feature. A listing with quality AI visuals is often better than one with lowquality images. This is especially convenient for smaller businesses that sell a lot of different SKUs but lack the resources to create unique content for each one.
In my opinion, though, this will only widen the gap between the minority of authentic, strong brands and the tons of commoditized products competing purely on price. I’d love to try out this type of content myself, and I’m curious to see how it’ll impact the customer experience.
“Amazon Ads launches new AI tools for advertisers—here’s your first look at the beta“
Aboutamazon.com https://www.aboutamazon.com/news/in novation-at-amazon/amazon-adsgenerative-ai-video-generatoradvertisers
Poshmark Backtracks on New Fee Structure
We often talk about how competitive marketplaces are for sellers. But there’s growing competition between marketplaces themselves.
While most businesses focus on attracting buyers, marketplaces need to attract both buyers and sellers to generate revenue through fees and additional services like advertising.
Poshmark tried to lower seller fees, which was likely welcomed by sellers. However, reducing their fee from 20% to 6% (plus a small flat fee) most likely impacted Poshmark’s bottom line— they had to make up for the lost revenue.
Their idea to charge buyers a fee resulted in a significant drop in sales across the platform. Within three weeks, they went back to the original fee structure.
Buyers have little loyalty to a platform if they can find the same product and level of customer service at a lower price somewhere else.
With Amazon, Walmart, Temu, eBay, Etsy, and other marketplaces, retaining both buyers AND sellers is becoming a bigger challenge. Amazon has relied on its traffic and Buybox attribution algorithm (which ensures sellers offer the lowest prices across all channels) to stay competitive. However, this may not be enough in the future if other marketplaces become aggressive, or if regulagors take action.
“Poshmark to Eliminate Fee on Buyers 3 Weeks After Implementation ” PYMNTS.COM 10/21/24
Amazon Direct-From-China Surprising Terms of Services
I wrote extensively about different pricing strategies, but I missed the one where companies roll a 20-sided die to price their products.
Even worse, the prices Amazon plans for their new “Amazon’s Low-Cost Store,” with third-party sellers shipping directly from China, seem to make no sense—everything is priced under $20.
Sofas under $20 and guitars under $13? And even if you manage to sell $19.99 sofas, another guideline reportedly states that “Items must not exceed 1 lb in weight or 14 x 8 x 5 inches in measurement.”
It’s clear Amazon wants to compete directly with Temu through this model, and I think it’s smart to create a separate section rather than mixing this direct-from-China venture with their existing listings.
But if the reported information is accurate, the execution of this strategy and the communication with sellers is sub-par.
I’m also concerned about Amazon forcing sellers to remove all branding and list items as “generic.” While it may not be a huge deal for this model, it sets a dangerous precedent: will Amazon eventually ask other thirdparty sellers to downplay or even eliminate their brands?
Now I am waiting to get more information on this new store, but I am a little pessimistic on its execution.
“Amazon Sets Rules for Its New Low-Cost Store”
