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FTC, 17 States Allege Amazon Has Used Monopoly Power to Squash Competition, Inflate Prices

Hello, Amazon Sellers!

Welcome to the latest edition of the Amazon Seller School newsletter. I’m here to keep you informed about the dynamic world of e-commerce. Let’s dive into the latest updates and insights:

1. FTC, 17 States Allege Amazon Has Used Monopoly Power to Squash Competition, Inflate Prices

The Federal Trade Commission (FTC), in conjunction with 17 states, has alleged that Amazon has wielded its monopoly power to suppress competition and artificially inflate prices. The accusations claim that Amazon’s dominance in the market has led to reduced choices for consumers and has created an environment where competitors struggle to thrive. Legal experts predict that this could be a landmark case that may have far-reaching implications for the tech giant and the e-commerce industry as a whole.

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2. 2023 Holiday Readiness and Capacity Limits in November

As the 2023 holiday season approaches, Amazon is increasing its capacity to ensure timely receipt of seller inventory and efficient delivery to customers. Sellers are advised to have their shipments arrive by October 26, 2023, to guarantee readiness for Black Friday. Throughout September and October, Amazon’s focus will be on receiving and correctly placing products in fulfillment centers, while November and December will prioritize processing customer orders. This strategic shift will result in higher estimated capacity limits in October and reduced limits in November, but sellers can use tools like the Capacity Manager and Amazon Warehousing and Distribution for additional inventory support.

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3. Amazon Drops Planned Merchant Fee as FTC Lawsuit Looms – Bloomberg News

Amazon has decided not to implement a previously planned merchant fee amidst looming concerns of an impending lawsuit from the Federal Trade Commission (FTC). The specifics of the fee and its purpose were not detailed in the article. This decision highlights Amazon’s efforts to navigate and potentially avoid further regulatory scrutiny.

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4. Amazon Announces Second Prime Day in October

Amazon is set to host another two-day Prime Day event in October, dubbed “Prime Big Deal Days,” scheduled for October 10-11, offering an ideal opportunity for early holiday shoppers. The event will present numerous deals across categories such as tech, entertainment, home goods, fitness, and fashion. While some offers are accessible through Amazon’s Daily Deals tab throughout the year, the best sales during Prime Big Deal Days will be exclusive to Amazon Prime members. In previous events, significant discounts were observed on items like Apple devices, Amazon gadgets, Dyson vacuums, and premium soundbars from brands such as Sonos.

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5. Amazon Publicly Displays Number of Sales on Listings

On September 21, 2023, Amazon revealed its decision to display the number of purchases a product has garnered in the past month, a move that has been met with criticism from certain sellers. This new feature, termed “sales trend,” will be visible for product listings in select categories such as health and personal care, home, and sports, showing data like “10K+ bought in past month.” While Amazon believes this feature can guide customers towards recently popular products, some sellers express concerns that it would unfairly benefit larger sellers and offer competitors insights into sales volumes.

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6. Amazon Enhances Automated Handling Time Feature

On September 22, 2023, Amazon announced improvements to its automated handling time feature to offer sellers better protection against sudden order influxes and to provide customers with more accurate delivery promises. The updated feature will now allow for a same-day handling time for SKUs shipped on the same day an order is received. Furthermore, sellers can now manually adjust their order-handling capacity based on performance changes, and if they decide to disable the automated handling feature, it will return to the SKU-specific handling time set prior to the feature’s activation, ensuring sellers do not lose their original configurations.

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7. Walmart Reaches 100,000 Active Marketplace Sellers

Walmart has achieved a significant milestone by onboarding 100,000 active sellers on its marketplace. This growth has been rapid, with the platform doubling its number of sellers in just 15 months. While it continues to lag behind Amazon in terms of seller count, Walmart’s marketplace is emerging as a major competitor, displaying strong appeal to online merchants due to its vast physical retail presence combined with e-commerce growth.

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8. Amazon’s Customer Loyalty Tool: Far More Powerful Than I Expected

Amazon has unveiled its new Customer Loyalty Analytics Dashboard, offering insights into customer purchase behavior and loyalty patterns. The dashboard segments customers into four categories: Top-tier, Promising, At risk, and Hibernating, providing metrics like percentage of total customers, change vs. the previous period, and predictive lifetime value. Additionally, it highlights monthly trends for metrics such as total and new customers, total orders, repeat customers, among others, empowering businesses with critical data for understanding their clientele.

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9. Amazon Punishes Seller for Five-Cent Price Cut, Echoing FTC Case

Amazon frequently sends “take action” emails to online sellers when it finds their products being offered for a lower price on other websites. One such incident involved Bernie Thompson, whose product on a different site was priced just five cents less than on Amazon, prompting a notification from the e-commerce giant. These emails form the basis of an antitrust lawsuit by the US Federal Trade Commission (FTC) that accuses Amazon of exploiting its market dominance to prevent competitors from offering discounts, thereby indirectly raising prices for consumers. Moreover, the FTC alleges that Amazon employs various tactics, like price monitoring and preferential treatment for certain merchants, that negatively impact competition and consumer experience.

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10. Amazon to Invest Up to $4 Billion in AI Startup Anthropic

Amazon is set to invest as much as $4 billion in the AI startup, Anthropic. This significant financial commitment underscores Amazon’s intention to reinforce its leadership in artificial intelligence. Anthropic is recognized for its pioneering work in AI safety and building models that understand and respect human values.

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That wraps up our newsletter for the month of September! I hope you find these updates incredibly valuable for your Amazon selling journey.

Happy Selling!

Todd Welch
Amazon Seller School