Amazon dominates U.S. e-commerce and the FTC investigates Amazon's new fees [MDSR#13]

March 15, 2024

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Hot Off the Presses 📰

Amazon accounts for 40% of U.S. e-commerce sales, according to Marketplace Pulse. Walmart accounts for ~10% of e-commerce sales compared to 7% for eBay.

More:

  • There are 1.1 million U.S-based merchants on Amazon's marketplace compared to 100,000 for Walmart and less than 1,000 for Target.

  • 80% of businesses that sell via marketplaces use Amazon.

  • In 2023, Amazon surpassed $100B in total e-commerce revenue, with the bulk of it occurring in the U.S.

  • While Amazon is still the dominant player for e-commerce in the U.S., the company can't rest on its laurels with companies like Temu, Shein, and TikTok Shop rapidly gaining popularity.

The FTC has launched a probe into Amazon's new merchant fees, according to Fortune. In December, Amazon announced a new set of fees including one where merchants could be punished if they fail to maintain sufficient levels of inventory at Amazon warehouses and haven't signed up for its Amazon Warehousing and Distribution (AWD) service.

More:

  • Amazon has defended the fee changes saying "many sellers will see a decrease in the average fees paid to Amazon per unit sold."

  • Fortune spoke with six merchants who said the changes are "overly complex" and designed to force merchants to use AWD.

  • The merchants warned the changes will force them to raise prices in order to offset the rising costs.

Amazon has suspended plans to launch its digital storefronts in several international markets including Nigeria, Chile, and Colombia. The move is part of CEO Andy Jassy's plans to cut costs. Since 2022, over 27,000 corporate employees have been let go and the company has shut down multiple unprofitable initiatives.

More:

  • Amazon had launched a new digital storefront in at least one new market since 2016, but that streak ended in 2023.

  • In 2022, Amazon was planning to expand to Switzerland, Ireland, and Belgium but only ended up rolling out a storefront in Belgium.

  • Despite the slowdown in expansion, Amazon has announced plans to enter South Africa this year.

  • The Information notes that Amazon is also looking to enter Ireland in the future.

Oura began selling its smart rings on Amazon. Oura is also selling sizing kits to ensure the device is the right fit.

More:

  • Oura reached a deal with Best Buy to sell its rings at the retailer's website and brick-and-mortar locations in 2023.

  • Before forming these retail partnerships, the company's rings were only available on its website.

  • Oura has faced increased competition in recent years with Apple integrating new health features to its Watch and Samsung set to release its Galaxy Ring later this year.

  • Oura was last valued at $2.6B following its last funding round in April 2022.

  • The company has raised $148.3M since its inception in 2013.

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Weekly Reading 📖

This week's recommended reading is "eCommerce Marketing: How to Get Traffic That BUYS to your Website" by Chloe Thomas. This book provides readers with a Customer MasterPlan Model that includes easy to implement strategies to boost customer acquisition and retention. The book covers every marketing channel used by merchants including social media and email.


"ECommerce Marketing: How to Get Traffic That BUYS to your Website" has a 4.5/5 rating on Amazon. 

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E-commerce Tool of the Week 🏫

Emailwish is an all-in-one tool that enables e-commerce merchants to automate their email marketing. Merchants can automate everything from cart reminders, customer reviews to thank you notes. Emailwish has four pricing tiers ranging from free to $500/month. Furthermore, Emailwish has an ambitious product roadmap and gives users the ability to vote on which feature they'd like the company to roll out next. Emailwish as five-star-rating on Product Hunt.

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Videos Worth Watching 💸

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An Event You Should Attend! 🗓️

The White Label Expo Las Vegas will be held between May 8-9 in Las Vegas, Nevada.

Why you should attend:

  • The event features speeches from notable names such as Derric Haynie, the CEO of Ecommerce Tech and Heather Marianna, CEO of Beauty Kitchen, a plant-based spa and skincare line.

  • There are 200 seminars covering a variety of topics such as social media marketing and how to deliver a world-class customer experience.

  • You'll be able to network with other merchants, suppliers, and manufacturers.


Click here to check out the agenda and here to buy tickets.
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Quick Hits:

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Until Next Time ✌️

As always, thanks for sticking with us until the end. 

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See you next time with more of the latest and greatest content you need to succeed this year 🔥

Sincerely, 

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