The National Retail Federation estimates that up to 30% of items purchased online will be returned. Only half of all returns end up back on store shelves. Retailers often sell these items to liquidators and discounters for pennies on the dollar. Over 5 billion pounds end up in landfills. This has both a huge financial and environmental cost. There are a few startups that are working to stem the return tide. Optoro is a tech company that provides reverse logistics and multi channel remarketing. This is essentially helping companies sell their merchandise on Ebay, Amazon and more. Happy Returns works with stores to accept and process returns from online retailers who do not have a physical location. Hosting a “return bar” can be a great secondary revenue generator for a store. Returns can represent a huge drain on profit for small businesses but like any other problem, solutions can also be profitable.
As e-commerce grows, “last hour logistics” is becoming a booming business. Warehouse space in densely populated places and metro areas is hard to come by but necessary to deliver products to the customer quickly. A report from Deutsche Bank said strip malls and industrial parks can be good locations for these new urban warehouses. Many retailers who have traditionally had large stores are creating smaller more showroom style environments in response to changing shopping trends. Their extra retail space may be converted into mini Amazon warehouses.
Home security company, Blink, is going to be acquired by Amazon. Amazon stated that they know that customers love Blink’s home security cameras and monitoring systems since they sell them. A representative is quoted as saying, “We’re excited to welcome their team and invent together on behalf of customers.” This highlights a trend that has been happening for a while. Amazon uses it’s marketplace to gather data on consumer demand. There are instances where un protected intellectual property is simply copied by Amazon if they see that they want to sell to the same consumer and in cases such as this it can lead to acquisition. Private labelers and brand developers must make sure their IP is protected if possible.
We’d like to mention a correction from last weeks news. I thought that the Amazon Global Store was unique to the Middle East’s Souq.com. However, I have since learned that it is a growing trend internationally. There are over 100 countries that have Global Stores. That means items are listed in the local language with fees included but shipped from Amazon.com. I am optimistic that this program may open up to third party seller products in the future.
There is a new way to earn money via Amazon by creating Alexa voice controlled apps. Makers of popular apps, or skills, are being paid by Amazon even if the apps are free. Right now, it’s based on downloads and popularity so just a lucky few get paid through Amazon’s Alexa Developer Rewards Program. Marketing companies are making between 10 – 200 thousand dollars to create these skills for major brands such as Purina and AARP. It’s still pretty hit or miss as an income stream but will develop over time.
Finally, keep an eye on Feb 15th. This is the time when long term fees are calculated for FBA. If you want your merchandise to be available through Q4 2018, do not send it in until Feb 16th and you will have until Feb 15th next year. Dispose or recall any products by then to avoid these fees. August 15th is the other date when they are calculated.