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US Cracks Down on Small Packages Coming from Overseas

Hey, Fellow Amazon Sellers!

Welcome to this week’s edition of our newsletter, packed with the latest insights and updates to help you thrive on Amazon. Let’s dive into the key highlights that will keep you ahead of the game.

1. US Cracks Down on Small Packages Coming from Overseas

The US is tightening its regulations on small overseas packages to address duty evasion concerns, particularly with packages that qualify under the high de minimis rate allowing tax-free entry for low-value shipments. Recent enforcement by U.S. Customs and Border Protection (CBP) includes suspending several customs brokers from the Entry Type 86 Test, aimed at ensuring compliance and reducing risks. The CBP’s intensified scrutiny reflects the exponential growth in e-commerce, which has seen de minimis transactions skyrocket from 134 million in 2015 to 1 billion by 2023. Notably, platforms like eBay and Etsy, which benefit from high de minimis thresholds, now face increased competition from low-cost international sellers like Temu and Shein.

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2. Amazon’s Third-Party Sellers Drive 61% of Sales, Up 10% in Five Years

Third-party sellers on Amazon now contribute 61% of total sales, a 10% increase over the past five years. Leveraging Amazon’s Fulfillment by Amazon (FBA) program, these sellers have significantly more control over their products and pricing, turning this segment into a major revenue source for Amazon. From accounting for 50% of sales in 2018, third-party sellers have grown to represent a substantial portion of Amazon’s business, with revenues from these services reaching nearly half a trillion dollars over the past five years. This growth trajectory is expected to continue due to favorable changes in fulfillment rates and inventory fees by Amazon.

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3. Tesco Launches Marketplace with Thousands of Third-Party Products

Tesco has introduced an online marketplace featuring 9,000 third-party products, aiming to make a one-stop-shop for customers. This marketplace, seamlessly integrated into the shopping experience, allows customers to purchase items ranging from garden supplies to pet care directly from suppliers, distinct from their grocery orders. Marketplace director Peter Filcek emphasized the ease of this new system, noting its potential for rapid expansion throughout the summer. This move represents a significant shift from the previously shuttered Tesco Direct, aiming for a more integrated and scalable solution that emphasizes quality and trust over mere scale.

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4. Mark Zuckerberg is quietly sitting on a shopping empire with 4 times the customers of Amazon, as Facebook Marketplace skyrockets

Facebook Marketplace has emerged as a significant player in the e-commerce sector, boasting 1.2 billion active users—four times the number of Amazon’s customers. The platform, favored for its convenience and integration with Facebook’s massive user base, offers everything from high-value items to everyday products. With the rise of remote shopping during the pandemic, Marketplace’s ease of use and existing social network connections have propelled it into a formidable position against traditional giants like Amazon and eBay. Despite its vast user engagement, the platform’s financial model focuses more on enhancing site interaction to boost ad revenues rather than direct profit from transactions.

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5. Game-Changer Alert for Amazon Sellers: New Beta Feature in Campaign Builder

Elizabeth Greene highlights Amazon’s new beta feature in Campaign Builder, the Product Listing Quality, which assesses product listings for their click potential. This tool provides crucial insights into how Amazon’s algorithm perceives listings, advising sellers on readiness for campaign launches. It identifies listings that may need adjustments, ensuring they meet the minimum standard for clicks and enhancing their visibility and performance. Previously, sellers had to manually check recommended keywords to understand product alignment with Amazon’s algorithm, but now, this feature offers direct feedback, saving time and potentially increasing campaign success.

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6. How to Create Social Media Content for Your Amazon Brand

Brian Connolly provides valuable insights on creating effective social media content for Amazon brands, emphasizing the role of such content in enhancing brand visibility, credibility, and customer engagement. Effective strategies include mixing content types like user-generated content, product showcases, and educational posts to keep the audience engaged. High-quality visuals, consistent branding, and interactive posts are crucial to maximize reach and engagement. Connolly also suggests using social media analytics to refine strategies and directly linking to Amazon listings to drive traffic and sales.

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7. Five Tips For Reducing Amazon FBA Fees

Tom Wicky offers actionable strategies for minimizing Fulfillment by Amazon (FBA) fees to enhance profitability for sellers. Key tips include optimizing packaging to reduce shipping costs and environmental impact, effectively managing inventory to avoid unnecessary storage fees, and improving the Inventory Performance Index (IPI) to lower storage fees and enhance stock efficiency. Wicky also suggests leveraging Amazon’s discounted shipping options through the Partnered Carrier program and conducting regular product portfolio reviews to eliminate unprofitable items, thereby optimizing overall sales strategy and reducing FBA expenses.

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8. Walmart Takes Amazon Battle Into New Virtual Spaces

François Maingret expresses skepticism about Walmart’s new initiative, Walmart Realm, a gamified marketplace designed in collaboration with influencers. He compares the appeal of immersive virtual shopping unfavorably with platforms that offer highly personalized recommendations, like TikTok, or efficient search functionalities, like eBay. While acknowledging Walmart’s attempt at innovation, Maingret doubts the new strategy’s appeal to Gen Z, suggesting that older demographics might be more receptive to gamification. He remains open to revising his opinion if Walmart Realm succeeds.

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9. TikTok Aims To Create 1 Billion Shopping Influencers

TikTok is revolutionizing affiliate marketing by attempting to convert its vast user base into shopping influencers via TikTok Shop, launched in September 2023. The platform has lowered the follower requirement to 1,000, enabling more users to earn through affiliate marketing without the traditional hurdles such as managing discount codes or direct brand negotiations. TikTok’s integrated marketplace facilitates direct interactions and transactions between creators and brands, streamlining the process and allowing for precise sales tracking. This development is a significant shift from traditional affiliate models, as seen with Amazon, making influencer marketing more accessible and transactional on social media.

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10. Amazon’s Original Rivals Throw a Twist Into FTC Antitrust Case

Booksellers across America seek to intervene in the Federal Trade Commission’s (FTC) antitrust lawsuit against Amazon, alleging that the e-commerce giant has used its market dominance to manipulate book prices and undercut smaller competitors. The FTC, however, argues that the booksellers’ complaints do not align closely with the broader scope of its case against Amazon, which accuses the company of using its market power to hike prices and pad profits across various product categories unfairly. This legal tangle showcases the complexities of the landmark case set for trial in 2026, highlighting differing strategies Amazon employed across product lines, from books to groceries.

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11. Walmart Runs Seller Promotion to Grow Selection of Its Marketplace

Walmart is actively encouraging third-party sellers to expand their catalog on its marketplace by offering a promotional discount on referral fees. Sellers who list recommended items from Walmart’s Assortment Growth Dashboard by July 31, 2024, can receive up to 50% off these fees, with additional discounts available for items shipped via Two Day Delivery or Walmart Fulfillment Services. However, Walmart also emphasized compliance with its Customer Care Policy, reminding sellers about the prohibition against unsolicited communications with customers.

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12. US Judge Rejects Amazon Bid to Dismiss FTC Lawsuit Over Prime Program

A U.S. judge has denied Amazon’s attempt to dismiss a Federal Trade Commission (FTC) lawsuit alleging deceptive enrollment practices in its Amazon Prime service. The lawsuit claims Amazon used “dark patterns” to trick consumers into signing up for and keeping the Prime service, making cancellation difficult. The FTC is seeking civil penalties and a permanent injunction against such practices. The non-jury trial is set for February 2025, following a broader pattern of regulatory scrutiny on big tech companies under the Biden administration.

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13. The Resources You Need To Succeed in your Amazon Business

    Discover the Essential Tools and Resources Behind My Amazon Seller Success! This carefully curated list includes services, books, and resources that have played a vital role in my business journey, and I’m confident they’ll do the same for you. 

    My aim is to save you precious time by sharing the fruits of months and years of research, experimentation, and learning. As I come across new gems that can accelerate your success, I’ll keep this page regularly updated, ensuring your path to success is smoother and swifter.

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    Happy Selling,

    Todd Welch
    Amazon Seller School