Our Top 3 E-Commerce Stories:
- Dubai based, Souq.com, which was acquired by Amazon in early 2017, has now created something called an Amazon Global Store. As far as we can tell, this is the first of its kind. Buyers in the Middle East will see products from Amazon.com listed in their native language with all duties, vat and shipping from the US included in their price. Products are from Amazon’s own catalog for now, no third party sellers. We will keep an eye on this type of marketplace as Amazon attempts to satisfy the demands of customers from developing economies while dealing with the challenge for small to medium size businesses of multinational shipping.
- Nike announced they will focus only on 40 of their over 30 THOUSAND retailers as official strategic wholesale partners. Brand after brand is pulling out of the traditional wholesale retail model and focusing on direct to consumer sales. A few retail locations that can really add value is all that they need, they are seeing the dissolution of their brand as they go too wide. Coach and Michael Kors are following suit. Third party sellers will find it more and more challenging to sell these brands as they tighten up their distribution.
- No name fashion is taking over retail. Millenials and other shoppers are more interested in look, price and quality than the brand name. Social proof is also meaningful which can now be obtained by anyone with a good product. Everyone from Amazon to Target to small businesses are coming out with their own lines and brands of clothing and many of them are selling well, especially in the category of “basics”. Does it matter who made your black t-shirt or yoga pants or just that they feel and look good? This is a response to several market factors. The first is that the fashion industry is very far removed from reality. The best and brightest who are working for big names are just designing weird clothes that no one will wear. The second is that these big brands are slow behemoths and are just not adapting well to the sizing and demand of direct to consumer sales. Amazon and others who understand the new economy can respond by creating products that people want in sizes that actually fit them.
This week From Amazon:
- Amazon is now calculating, collecting and remitting all sales tax for orders sold in and shipped from Washington State due to a new law there. Sellers are hopeful that the rest of the states will follow suit relieving a huge financial and administrative burden. In the meantime, continue managing your own taxes in every other state.
- Amazon announced this week that in 2018, fulfillment fees or FBA fees will be adjusted for the whole year with no different fees in Q4. In 2017, Amazon charged higher FBA fees from Oct to Dec. This means an increase in costs for most FBA sellers. The small oversized and large oversized, that is products that weigh more than a pound, are the most dramatic increases and will be impactful enough to either raise prices or lower margins so much that some products will just not be sold. Here is where you can see the exact price breakdowns.
- Merchant fullfillers and Seller Fulfilled Prime sellers will appreciate the new option to buy shipping labels in bulk from Seller Central in up to 100 units at a time.