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Amazon’s Average Customer Profile Revealed

Hey, Fellow Amazon Sellers!

Welcome to another thrilling edition of our weekly newsletter! Get ready to dive into the latest updates and insights:

1. Amazon’s Average Customer Profile Revealed

Amazon’s typical shopper is characterized as a white, Gen X woman with an average income of around $60,000 per year, placing around 72 orders annually which culminates in an average spending of $2,662. This demographic makes up a significant portion of Amazon’s consumer base, with eight out of ten U.S. shoppers having purchased from Amazon last year, contributing to the company’s nearly $255.9 billion in net product sales in 2023. Despite competing with Walmart and emerging platforms like Temu, Amazon maintains a strong repeat customer rate, with frequent price comparisons even when shopping elsewhere, showcasing its solidified position in the e-commerce landscape.

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2. Amazon Sellers Face New Shipping Complexities

An Amazon seller, Watch Me Amazon, discusses the challenges and added expenses resulting from Amazon’s new shipping requirements. Initially, a single shipment of 5000 units now needs splitting into four smaller shipments, potentially leading to uneven distributions and multiple destinations, significantly increasing logistical costs. Initially estimated at $500, these changes could inflate operational costs to around $2,000 or more, not accounting for additional time and workflow disruptions. While Amazon has reduced FBA fees by $0.20 per unit, the operational complexities and additional shipping fees might offset these savings, reflecting a typical 15-20% annual fee increase by Amazon but in a more convoluted manner.

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3. Amazon Cracks Down on Coupon Pricing

Amazon is tightening its coupon pricing rules starting March 12, 2024, to ensure discounts offer real savings to customers. Under the new guidelines, only products with a sales history can have coupons, and the discount price must be lower than the item’s historical “was price” or its recent lowest sale price. The policy aims to curb deceptive pricing and foster customer trust. Seller reactions are mixed, with concerns about mandatory low pricing and the elimination of fake sales, alongside reminders of Amazon’s 60-cent coupon redemption fee.

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4. What is a Good TACoS on Amazon? Insights from Destaney Wishon

TACoS (Total Advertising Cost of Sales) is a metric on Amazon that relates ad spend to total sales revenue. For a fast-growing brand, a TACoS of 10-15% is considered healthy in 2024, up from 3-5% in 2020. However, for brands focused on profitability, a TACoS between 5-8% is more suitable. The ideal TACoS varies based on factors such as market presence, branded search visibility, and business goals, ranging from 7-10% for well-established brands to 20-25% for new entrants aiming for market penetration and organic rank improvement.

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5. What is the Busiest Day of the Week for Sales on Amazon? by Joe Shelerud

Joe Shelerud, CEO at Ad Advance, reveals that Monday is the busiest day for sales on Amazon based on data from 147M clicks. The analysis indicates high traffic and conversion rates on Mondays, making it optimal for increasing ad bids and budgets. In contrast, Sundays have high traffic but low conversion rates, and Saturdays exhibit both low traffic and conversion rates, suggesting a reduction in bids and budgets. The study suggests tailoring ad strategies based on daily performance trends to improve ACoS and ROAS.

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6. Amazon Starts Flagging ‘Frequently Returned’ Products That You Maybe Shouldn’t Buy

Amazon introduces a new tag to warn users about ‘frequently returned’ items, aiming to guide consumers towards making more informed purchases. This initiative is part of Amazon’s effort to enhance customer satisfaction and reduce returns, which not only present a hassle for customers but also add environmental and operational costs. The tag has started appearing on certain listings and prompts buyers to review product details and customer feedback more carefully. The feature’s broader rollout and regional availability remain uncertain, pending further announcements from Amazon.

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7. Amazon Collects $140 Billion in Annual Fees from Sellers. Now Many Are Fuming Over ‘Crazy’ New Fees They Say Tighten Amazon’s Grip on Their Businesses

Amazon introduces new fees for sellers, sparking widespread discontent among the merchant community. The latest fee changes aim to optimize shipping speeds and reduce costs, but sellers argue they complicate business operations and may lead to higher prices for consumers. The “inbound placement service fee” encourages sellers to adopt Amazon’s AWD service, altering traditional supply chain dynamics. This move comes amid Amazon’s increasing reliance on third-party seller fees, contributing significantly to its revenue. The changes have prompted sellers to reassess their pricing strategies and consider how they use Amazon’s fulfillment services.

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8. Amazon Begins Using Humanoid Robot Workers

Amazon is testing a humanoid robot, Digit, in a Seattle warehouse, developed by Agility Robotics, highlighting advancements in robotics with practical warehouse applications. Despite being in the early stages and slower than human workers, Digit represents significant technological progress with its ability to handle tasks like moving empty bins. The robotics industry, fueled by investments, is exploring broader uses beyond logistics, including retail and healthcare. However, alongside the growth in robotics, concerns about cybersecurity and job displacement persist, underscoring the need for careful integration and regulation as the technology evolves.

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9. Temu to open its platform to third-party sellers in the United States

Temu, a Chinese retail portal, plans to expand its operations in the U.S. by allowing third-party sellers to list products on its platform, marking a significant strategy shift to compete with major U.S. retailers like Amazon, Walmart, and Target. This move, following Temu’s considerable $9 billion turnover last year, aims to attract U.S. merchants who seek a prestigious platform without the association of low-cost Asian goods. The introduction of U.S. sellers might help Temu retain its American audience amid declining return user rates, as shown by recent surveys. Additionally, Temu’s expansion reflects broader strategies also expected to roll out in Europe, despite ongoing criticisms regarding the impact of its parcel volume on U.S. airfreight logistics.

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10. Amazon Offers Perks to Get New Products onto Its Marketplace

Amazon is encouraging more brands and third-party sellers to list new products on its platform by expanding the perks of its FBA New Selection program, initiated in 2019. The program now requires a lower Inventory Performance Index (IPI) score for eligibility, reduced from 400 to 300. Amazon aims to boost its product selection for Prime members and will announce more updates, including discounts on Vine enrollment fees, later in the year. Since the program’s inception, 60,000 sellers have enrolled, contributing over 680,000 new-to-FBA ASINs to Amazon’s fulfillment centers.

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11. Bqool Repricer – For The Beginners

Meet Bqool Repricer – the perfect tool for beginners! When I first started on Amazon, this was my go-to software for repricing my listings. With Bqool, you can efficiently compete for the buy box, which is crucial for successful sales on Amazon, especially if you’re into wholesale or retail arbitrage. Don’t miss out on this powerful tool to optimize your Amazon selling journey!

Try it here:

Stay tuned for more exciting updates!

Happy Selling!

Todd Welch
Amazon Seller School