The US Congressional questioning of the tech companies was an interesting one. I sell on Amazon myself for a living so I have a particular ear for the Jeff Bezos questioning and Amazons decisions affect my day to day livelihood.
Jeff’s statement told some of the story in text form - I must admit it was beautifully put together
A lot of the focus and criticism of amazon is around them using ‘third party data’ to choose products for themselves to launch and sell. In truth.....anyone has access to this data for no more than a $80 monthly subscription.
To paint the picture where this goes back to is 1999, when amazon decided to let ‘third party’ sellers sell on amazon.com. At the time, this was a massive step for a website to take. However amazon was doing 2 things:
a) Using people like me (well not me, I was 9) and millions of others to advertise and sell products on amazon.com - in an ingenious move they outsourced their Sales & Purchasing department to thousands, then millions of sellers around the world. Who knew product and retail far better than amazon.
b) In this same step, they took on eBay.com and thus began 20 years of 2 massive ‘marketplaces’ which allow for the buying and selling of products from millions of sellers to millions of customers
Fast forward a bit and ~60% of Amazons retail revenue comes from us third parties, selling directly to customers! Amazons outsourcing of their sales.....kind of came back to bite them in that they are a minority seller on their own website. But they bill us as sellers, 15%......so they are doing pretty good!
Where this has left things on the competition front though is that amazon are TRYING to launch products to start to retake some of this 60% and to increase their 40% share of sales on amazon.com. And where they have started which has drawn all this criticism is by using the data which goes though their website. But here’s the thing, for $80.....anyone can subscribe to a website which provides all this juicy data. So amazons using exactly the same tact as the rest of us are!
The data is there for them on a plate. The rest of us just have to hunt a little harder. But they are doing exactly as anyone would do. What is ironic, is that amazon is really struggling to make this work.....their brands (launched on the back of third party sellers data, as is the accusation) are struggling to take market share and they have faced a lot of criticism over quality. To paint a picture of how badly they are doing, at one point, amazons own feedback rate on their own site was sub-50%.
So yeah, I just thought I would share the story in a bit more light. For economic relevance, Amazons GDP just overtook Ireland’s at $1 billion per day - what a world!