Amazon News: AI Traffic, TikTok Logistics & The New Amazon Moat

Amazon News: AI Traffic, TikTok Logistics & The New Amazon Moat Unknown Speaker: Welcome, fellow entrepreneurs, to the Amazon Seller School podcast, where we talk about Amazon and how you can use it to build an e-commerce empire, a side hustle, and anything in between. And now, your host, Todd Welch. Speaker 2: What is going on, everybody? Welcome to another episode of Amazon Seller News Live. We got Chelsea from SoStock. Speaker 3: Welcome, Chelsea. Speaker 1: Thank you. Speaker 2: And Andrew from Marknology, of course. Andrew, welcome back. Speaker 3: Thank you, Todd. Speaker 2: Appreciate you guys joining me. As always, we've got lots of good Amazon news. Well, I should say some TikTok news, some ChatGPT news, AI news, and how that all relates back to Amazon. We tend to be expanding, you know, outside of Amazon as Amazon has matured and looking at these other platforms and how it is Playing in the Amazon space and how things are changing, which is important, I think, because as Amazon matures, the brands got to mature and act more like, you know, real brands, real businesses and things like that. So looking at all these different avenues to grow people's businesses. Anybody out there watching, if you have any questions, comments, concerns, throw them in the chat. We always love bringing your guys' comments and such into the chat or into the live stream and getting them answered. But without further ado, let's go ahead and jump on to our first Article here so tick tock shop mandates in-house logistics shaking up 3PL and seller operations. Tick tock shop will end seller managed shipping on February 25. Forcing merchants to use TikTok fulfillment or a small list of approved partners, putting major pressure on independent 3PLs and scrambling sellers who must quickly migrate systems and warehouses. And this is really interesting too because TikTok, of course, just got its USA ownership. So this is almost like their first A big thing that they're doing, I'm assuming, maybe they were working on this before that happened, or maybe this is because of that. It's hard to say. I've got my own opinions on this, but I'm curious on your guys' thoughts here to start out. Speaker 3: Chelsea, you go ahead. I have plenty of thoughts on this. Speaker 1: Yeah. Speaker 3: I think there's a lot of ways to take it. Speaker 1: Yeah. I mean, I think that TikTok has to legitimize itself. They have to really control the customer experience. It's no longer an experiment. It's proven more and more that this is actually something they need to build infrastructure around. It's kind of becoming a toddler in its own space. In the infancy, it was, let's see how this goes, if it works. Now that it is really proven itself out, they are starting to take on those infrastructure costs, those really kind of battening things down, tightening things up. So that those customers that are beginning to trust TikTok Shop will continue to use TikTok Shop because of the reliability of the customer experience, not just because of the cool products. Otherwise, they're going to have the attrition to Walmart and Amazon. Speaker 3: Yeah, I agree. Definitely growing up, definitely maturing, making adjustments as they go. I think it's going to be really interesting to just see what happens With a TikTok acquisition, you know, there's like, there's a lot of posting about censorship and just like changes that happened almost overnight. I mean, the acquisition happened on Friday. On Sunday, TikTok Shop was down like nationwide. It was a weird weekend during that transition. Sales weren't being reported, ad spend was still happening. So just some weirdness there. But I think on the logistics side, I honestly think that this This article is a little bit dramatic, to put it lightly. I have a warehouse in 3PL. We also have customers that we do fulfillment for them on TikTok Shop. And there is a bit of a scramble that needs to happen, but it's not as drastic as I think this article is saying, as I'm getting more information. I might have to eat my words, but what I believe is that Amazon MCF will still be able to ship TikTok orders. That will still be able to integrate for everything that I'm hearing from my sources on both the Amazon and shop side. And there are some specific like software partners that you can use that essentially will integrate with TikTok Shops interface. Like let's say. I'm not saying ShipStation is one of them, but like an aftership, a ShipStation, some of these like type of tools are what you have to use to integrate and then buy it through there. But you don't have to necessarily, and that's a change that's going to be work for us. That's going to be something different to our workflow per brand, but that is not having to switch 3PLs or switching. You're not having to use TikTok Shop shipping. It's more about like the interface of getting your shipping through one of these softwares and then going through their platform there is what they're enforcing. It's kind of one of those things with Amazon where they just kind of word it vaguely and you have to try to interpret what they're saying. And that's how I feel it is with this. But I think as we are getting a little bit more information each day, it's looking more like we're just going to have to Add another integration into what we're already doing or make sure that what we're already doing is covered, um, but not having to use TikTok shop shipping, which is what I thought out the gate was we were going to have to use their fulfillment stuff. Speaker 1: So it's more the interface then than the actual logistics side of things. Speaker 3: Yeah. Um, it's like, Hey, you have to use one of our preferred providers or one of our, like our integrators, um, not FBA or not nothing at all. It's not like that, you know. Speaker 1: Yeah, I think that FBA or FBM is still right. What about that? That other article was saying that you can still fulfill by by MCF on Amazon. Speaker 2: Correct. Yeah, that that was the big, I think, what a lot of people were scared of is that you were no longer going to be able to use Amazon MCF to fulfill orders. And that's what it sounded like in the beginning. There has been some clarification. Travis Johnson posted that they confirmed that you could at least for now use MCF. It doesn't sound like there's any like firm for good kind of thing that you're going to be able to use it. I think it'd be a really bad idea for them to eliminate MCF at this stage. It would extremely lower the availability of products on their platform. That was the big scare in the beginning for this. Speaker 1: It would be very risky. I mean, I think Shopify tried to do that. There was a temporary merger of Shopify and Deliver, a deep partnership. And they tried to get rid of Amazon MCF. They tried to cut that piece out and it just became kind of disastrous and they had to kind of, you know, backpedal on that. I think they split ways again. Deliver ended up, you know, taking over any of the logistics that Shopify had developed and Shopify changed their policy because Amazon is a logistics company, you know, most for the most part and Shopify and TikTok. TikTok is entertainment and now becoming a marketplace platform, but it's not logistics and Amazon does logistics better than anyone. So Taking on that logistics piece, I think some of these marketplaces can be short-sighted. So you have to be very careful with how they approach the logistics piece because that's where everything can fall apart. Speaker 3: You know, something that just popped into my head and this is like, Injecture, if anything, is like, you know, it could be a place since they became a U.S. entity. Maybe there are players. We're thinking like an American seller, Amazon seller. We're thinking like an e-com business here. But maybe a small rule like this in a way cuts out some of the Chinese postage or some of those other C's like, you know, that just by making this rule, we're having to figure it out. But it makes it more U.S. based. And it's not like a problem that we're seeing. So it could be something like an outlier like that. That's just like something we're not even tracking, which is just like, um, and they're trying to say, Hey, we want it to really be, if we choose these sellers, then we can choose the shipping and, you know, get a little bit more handle on it. But I think it's typical of an Amazon, of the Amazon seller community, um, to be fearful. They're fearful driven. Like they just saw changes are scary. And, um, but like, you know, all of us have been around a long time. It's usually not as bad as it seems. Speaker 1: Never as good or as bad, yeah. Speaker 3: Yeah, it's never as good or as bad. It hasn't been as good in a while. It's more like as bad these days. Yeah, I think, you know, we use We're the buyer prime for a lot of our brands, their e-com sites. So we work with that team. And just like the sentiment overall is it might actually be a stronger MCF play when it's all said and done than it is right now. And that was encouraging for me to hear. Speaker 1: That's good. How does this affect dropshippers? Like is that because to your point, you know, trying to kind of eliminate some of the. Speaker 3: You know, some of those outliers that I'm not really sure that could be like, you know, a couple of those things that they're like, look, we want it to be shipped faster. We don't want drop ship. We don't want some of these international shipping carrier ship postage carriers to be able to, you know, send tracking or updates like that. So there could just be cutting controlling the fringe a little bit and then, you know, similar to Amazon. They really wanted to punish you if they could figure out that you were shipping product you didn't have. They wanted you to have it on hand and made a lot of rules to kind of sharpen that around. Speaker 2: Yeah, I think you're probably on to something there, Andrew, with trying to cut out the overseas fulfillment, especially from China. That takes one or two or three weeks sometimes to get to you, especially now that with USA ownership and trying to appease the powers that be in Congress, For that side of it as well, I think it was the biggest problem was just the wording that they put out in the notice was kind of like Amazon notices. Like you said, it's very vague. And not enough detail. And so it's just kind of a shock and awe kind of thing from the community like, oh, my goodness, we can't fulfill through Amazon anymore. We can't ship from our own platforms anymore. We got to use TikTok logistics services, which If that was the case, I think they would have just destroyed their whole business. But it kind of seems like that was probably never the case. Yeah, or wording in the email that they sent out. Speaker 1: Well, I mean, you know, to that point, like the the follow up on this was, From LinkedIn, you know, a post from LinkedIn from one of the representatives. And that we see that happen in Amazon inside of the the policy threads where they have to correct the vagueness of their communication. You know, you see, you know, we're seeing that on LinkedIn with this TikTok policy update. They don't take enough time to think through how to word that policy. And then the aftermath is having to handle, you know, the backlash from sellers. Speaker 2: Yep. Yeah. Yeah, it's gonna be fun to watch to see how this goes. And, you know, if TikTok continues to grow, if it can, or if it scales back a little bit, Do you guys have any predictions on that now that it has majority USA ownership? Do you think it's going to kind of explode or just continue along its current trajectory, maybe scale back a little bit? Speaker 3: I think it's going to get a little bit less organic, a little bit more ad heavy as traditional to American business. So I think some of the things that made it great in the early days, I think we're gonna see those kind of go away. Not saying that it didn't change the game for social ongoing in the way that stuff is discovered and shared and without the whole like and follower. You had to have followers in order to get any engagement for the longest time and now it's switched. You can have a post go viral with no followers. I think we'll keep some of that. I do think there's going to be some censorship on certain things and that's going to change the face of TikTok and what creators are there and what they're posting and things like that. We've just already seen that in a few days. But I think anytime anything matures, it just doesn't feel it's like finding that band before everybody else does. And you're like, they're underground, you're getting tickets for 25 bucks, and you're pumped because they're just like, they're the best. And then everyone gets you're like excited because everyone knows about your favorite band now. But now tickets are 150 bucks, and it's hard to get in. And it's not it's in an amphitheater instead of a basement. And stupid analogy, but I just kind of see that with TikTok, where it's just like, it's getting more attention. You know, it's getting legitimized, it's owned by Oracle now, pretty much like an Oracle, we know Oracle. We have a massive campus here in Kansas City, where they just acquired one of our biggest companies for years and years and years, which was Cerner, which is a medical software company. And now Oracle just bought them. So just even the origins of the company, who's running them, I think it's just going to get less artistic, less creative, and a little bit more monetized as a generality. Speaker 2: Every social media has kind of been like that. It starts off really hot and fresh and then it matures. The user base gets a little bit older and then the younger kids don't want to be where their parents are. And so they move on to something else. It seems to be kind of a never ending cycle. So it'll be interesting to watch TikTok. I mean, TikTok is still pretty young. So I don't think it's going anywhere. And I don't know what else would replace it right now. But at some point, something will, if the history of social media is any judge. Speaker 3: I think something else, just jumping in on this as a fun way to think about it is like, You know, in a city, traditionally, you have like the artists move into an area, they start beautifying it, doing artwork, fixing up the lofts, like, you know, the artist community moving in, and then it becomes worth more value. Airbnbs, you know, pushes the artists out, people move in. Artists go somewhere else, and they do it again. And it's a cycle, you know, and I think Yeah, with with TikTok or social media, there's an element of that as well, where it's like, There's a new thing, a big enough thing to stick around, not just like a fad, kind of come in, you know, and then the art is getting the best creators and the most innovative and the most like outside the box. And you're just kind of getting this, like this newness. And then like you said, like the parents come in or like, you know, the business and people come in and kind of monetize it and start making money off of it. And then they move on. And I think that that can be, there's a parallel there. If you kind of understand that with any new platform, but I think also you know what happened to like physical mail, right? So like as email, email blew up, right? And then like it was just like email and Facebook and these things and then there's been a resurgence of Direct mail, like I love getting direct mail. It's not a bill, it's special. Someone wrote me a letter and I think that even as TikTok blows up or the next one comes, all of a sudden meta is doing a little bit better. So some of these other, because as there's an exodus from it or diversifying our spend and our attention, then some of the ones that have kind of fizzled out in the past can kind of have a chance of getting a little bit more daylight, so to speak. So I don't know if that resonates, but I think that's kind of the way, the way of the social platforms and things like that. Speaker 2: Yeah. Yeah. You know, it's funny that you mentioned physical mail because I just seen a video about how there's a resurgence of record stores And bookstores because the younger generation wants, you know, like real things instead of just digital. So yeah, you kind of have those changes and things go around. I don't think the young crowd's ever going to go back to Facebook, but I could be wrong. At this point, though, Facebook is kind of unique in my mind compared to all the other social media networks because Facebook is still geared more towards Staying connected with your friends and family, where all of the other social media now is just like watching random people's videos that you've never met or seen before, right? Speaker 3: Yeah. Speaker 2: So it's a big difference. Facebook is trying to mix a little bit of that in there, which I think is the wrong thing to do. They should hone in on what is really unique about their platform. And maybe you do see a resurgence in it because of that. Speaker 1: Yeah, on Instagram, I only watch stories of, you know, the people that I follow, but I never go to the feed because it's just garbage. But yeah, feed and Facebook is people I know. I don't go to Facebook a lot, but when I want to be connected with people, to your point, that's where I go, because everyone is there and you can't leave it because it's Facebook and something else. Like if you have a platform, you have Facebook and X or and, you know, Instagram or and TikTok. Everyone is on Facebook because it was the first one. Speaker 3: It was the connector. It was like log in with Facebook to everywhere. Log in with your Facebook and they were the first to do that. How many subscriptions or logins do you have that's really through your Facebook integration? TikTok definitely doesn't have that or it's not like logging in with Instagram. It's definitely a Facebook play. I would say you're right. God forbid, if you're getting married or there's a funeral or something big, it's Facebook, really, that you're going to post if you're looking to let your people know. Speaker 1: My husband uses Facebook as a virtual diary. He puts everything there so that he knows, you know, where it's at. And then everyone, you know, can follow along, especially now that we've, you know, had the birth of our son. So there are different uses for different things. But I think Facebook has that uniqueness that, you know, these other platforms don't, which makes it interesting that it hasn't, you know, really cracked the. Speaker 3: I will say as someone that just sold a desk yesterday off of Facebook, Swap Shop. I don't know. It's like garage sales and Swap Shop on there. That's kind of taken. It's kind of more powerful than you think a little bit like the Craigslist element. Speaker 1: We're about to sell a bed on there as well. We've bought some stuff off of there. The marketplace, I just I don't see how much how much more they should figure out other ways to monetize that because we're now in. What they call us, you know, a circular economy, because people are so cost conscious, thrifting has had a resurgence and Goodwill has posted its highest numbers, you know, its highest growth, like ever, because people are going to, you know, thrifting and, you know, spending money on used items more than they ever have before. Speaker 3: So that's really interesting insight, too. And I would wonder how that would impact eBay, you know? Yeah, kind of the original. Speaker 1: Yeah, if they can really, you know, sink their teeth into it and, and get their marketing right. I know they've got, they've got a decent marketing campaign, but I hope, hopefully they have people in, you know, inside that are actually, you know, trying to capitalize on it. Speaker 3: Facebook Marketplace is different in that it's local and it's usually you're not shipping it, you know. So it's still got kind of different, you know, it's kind of different. It's kind of taking the place of like the classifieds, you know. Speaker 1: Yeah. Speaker 2: It took all the traffic from classifieds and Craigslist really. Speaker 1: Yeah. Speaker 2: Yeah, Facebook really dropped the ball when it comes to e commerce, I think they really missed that opportunity. And, you know, I think it's just Facebook is not a They don't have that mindset of a startup kind of company and growing new things. If you think about it, Facebook is really the only thing that Facebook has ever created. Everything else is bought and that's successful. So they don't have that mindset that some of these other companies do to keep developing new things. Speaker 1: They're always a little bit behind. Yeah. I mean, even with the AI, they're focusing now on AI infrastructure rather than kind of, you know, really dialing into creating their own, you know, AI, which I think is pretty smart. They've got the money and the ability to do it because AI infrastructure is going to, you know, be at a premium, you know, pretty soon with the way things are going. But yeah, they're always a little bit behind, I think. Speaker 2: Yeah. Well, and that's something too, you know, if you look at the history of tech companies in general, we're talking about Oracle, you can look at Oracle and IBM as an example of the past, you know, at one point, they were very In the front of everything in the tech world, people knew about them. They were the hot companies and they slowly faded into the background. Income-wise, they're still making a ton of cash, but they moved to the back end more infrastructure-wise because there's potentially a lot more money there than on the front end and it can be a lot easier to serve those companies and clients in the back end. You may eventually see that from Facebook too. Speaker 3: R&D takes a lot of money and resources and not every R&D endeavor is a hit. Chelsea, I'm sure you know this as a founder. You try something new and it's great to be innovative, but not all of them work. If you can get to medicine, they did invent social media. What was it? United States and you know, a couple before it, but like Facebook, globally, at least, you know, and integrate all the schools and like, you know, how to everybody from your school and your high school and your college and so they did that one thing that they did right and I'm just, you know, I would love to be a fly on a wall in that room and just see like, you know, whenever TikTok makes plays like this or what they're having to go through, what's their actual bottom line versus if they had like maintained something for five years, how much more money would they have accumulated or been worth or like, you know, I would just love to see what some of these ventures that they jump into or these forays that they jump into, how much does that cost them? Speaker 1: Yeah. Yeah. I mean, you know, hit the nail on the head with R&D. When you get shareholders involved, you know, that changes everything. You know, less willing to take risks, going where the money is. You know, with Oracle specifically, you look at, you know, NetSuite, and it's not, it's not good. Like it's, it's all of these systems, you know, kind of duct taped together and you need One year of onboarding with a specialist. And then after that year, you end up wanting to go somewhere else, you know, and then you realize, oh, you know, Salesforce is better. And then Salesforce has its own problems going on with it. And it's because it started out something smaller and something that worked with people who had the real need and had ideas. And then it got bought out because it was doing really well. And they tried to, you know, put a bunch of, you know, tack a bunch of stuff into and it just The innovators have gone somewhere else, you know. Speaker 3: Are we talking about NetSuite? Are we talking about TikTok? Because I'm not sure because, you know, both things could be said. It just went through that acquisition where it got a lot more American business minded people that are now running some Titanic ships instead of speed boats in regards to like moving them and turning them. And that's just where I'm like, I'm curious to see how it works out because I think that they've now got some founders, some owners, a board that is more like Chelsea just outlined than a startup. Yes. Speaker 2: Yeah, I was really rooting for the people's bid for TikTok led by Kevin O'Leary, primarily because I think it would have been run more like a startup versus Oracle and the other companies. I forget who exactly else is behind it, but Oracle's the main one. It's not going to be run like a startup most likely. Hopefully they'll prove us wrong, but it's going to be run more like a mature company and they're going to want to make money off of it and figure that out. So will that end up ruining it? We'll have to see. Hopefully not. I think TikTok Shop is an amazing competitor or even, you know, working in conjunction with Amazon for growing social commerce and selling products. And the more competition, the better. So I'm hoping that it will continue to grow and take off. But we'll have to see. Hey, Amazon sellers. Tired of losing money on storage and shipping fees? Well, Amazon Storage Pros is here to take the headache out of logistics. We manage everything from inventory and creating efficient shipping plans to working with 3PLs and Amazon's AWD so that you can focus on growing your business. Start with a free storage cost audit and discover exactly where you're overspending and how to fix it. Don't let logistics eat into your profits. Visit AmazonStoragePros.com. That's AmazonStoragePros.com to get your free storage cost audit and start saving today. And now back to the show. All right, let's go ahead and jump on to our next article here. So OpenAI early chat GPT ad pricing at $60 per CPM. Shoot, I lost my place here. So, here it is. There we go. OpenAI is reportedly pricing early chat GPT ads at about $60 CPM, positioning them like premium TV inventory, while offering advertisers only basic metrics such as impressions and clicks, not conversion data. For Amazon sellers, this signals AI chat interfaces becoming a high cost discovery channel focused on brand awareness rather than performance, meaning strong brand positioning and off Amazon visibility may matter more as shopping journeys increasingly start inside AI tools. So I thought this was very interesting. Number one that, you know, just the advertising inside of these AI chatbots is going to be interesting, but then just the extremely high price that ChatGPT is positioning itself for ads. So what are you guys thoughts? Speaker 1: I mean, for me, first and foremost, the cost, you're going to get early adopters. People are going to pay, but it's going to be a lot of learning. They want to get ahead of the curve. Campaigns that will be started are probably going to be campaigns just to learn how the algorithms work. Um, I think they know that they can get people to pay that amount for what is essentially their experiment, uh, coming into the market. They're not paying, you know, they don't know if it's going to convert. So, or, or people are even going to click. So they're not setting up, you know, pay-per-click campaigns. They just, Don't know what they have. So on the, you know, open AI side, they're trying to grab the money knowing that it's going to be, you know, low traffic, but it's going to be, you know, experimental. So can we, you know, make a lot of money from the guys who are actually going to help us to figure out what we have here and can we charge them even if what we have is not effective for getting clicks? Speaker 3: Yeah, I think that's well said. To add to that, I would just say it's a learning time. They could have set it that high to slow down the adopters so that they're not overwhelmed and their own tech can handle it. It could be, you know, if you're selling agency services at a couple grand a sale, you know, like let's say you land a new client, like what's your average monthly retainer? 60 bucks isn't too bad. If you're selling e-commerce products, that's very expensive. So there's just also a difference in like, is it going to be service-based companies jumping into it first where that $60 wouldn't be much if you landed a client on it. So testing some of that. I think also, so one, just like slowing down the number of adopters. The ability to learn, maybe getting higher ticketed, you know, brands or service providers being the ones to jump into it instead of the lower, the lower end, just kind of like filtering that. I think anytime you turn on something new, it just, you should be a little bit caught, you know, a little bit careful. You don't want to break it. Like, you know, you can break, we've had Prime Day break, you know, a couple, couple times through the years. Those are, those are bad. So, the other thing I would say is it's going to push, We will push marketers because it's expensive and the barrier to entry is a little bit high, push them to optimize for organic ranking in the LLMs. So, you know, like, okay, so it's $60 to pay to play, even more reason for me to focus on getting my stuff to rank or listing it, you know, organically. So I think there's a lot of like hypothesis on why mine wasn't immediately like, oh my God, it's 16, it's going to stay there. More of just like, Raise it high and if you get some sales, you get some sales and you're going to be learning, but you're going to be learning at a slower speed. Speaker 2: Yeah, that's very good points for sure. You could be on to something, Andrew, with the availability of inventory as well, maybe why. The CPM is so high because if you remember back when they originally started talking about ads, they specifically said they would not put ads in the results that you get because they don't want to intermix legitimate results or organic results with ads. So the inventory is probably going to be very limited in terms of where they're placing the ads. Number one, so they don't want to get a million people trying to run ads and then not have enough places to serve them. And they're probably trying to figure out where they're going to actually work and be effective to get clicks and actually make those clicks worth something. That could be a good reason to slow down the number of early adopters to actually see what works. Speaker 1: Are they going to show whether they're sponsored ads? I think they have to legally now, right? They have to show if it's a sponsored ad. I mean, Instagram got slapped for that. How are they going to show it? How is it going to be apparent? Where it is, and then always, you know, when when a company says they're not going to, you know, insert thing that would take money out of their pocket, it always should come with an asterisk. Speaker 2: Yeah. And we do know, well, not for sure, but on good authority that, you know, ChatGPT is relatively hungry to start making a profit. Because, you know, they're one of the original AI companies. We've just recently, in the last couple years, AI has really taken off. But ChatGPT, I believe, has been at this for about a decade now, building AI and growing and stuff like that. So they're kind of like, okay, we need to make some money. Because we talked last week about OpenAI implementing a 4% fee for every sale that goes through its platform as well. Speaker 3: 4% is pretty... Low. Compared to what we're paying everywhere else. So. You know, and that's where the e-commerce guys can live. But even if the sale goes through there, they're like, how can I be seen organically, even if there is a 4% commission? You know, so I think it's just going to kind of tailor how people are approaching it. I hope the organic play lasts a little bit longer, even if they're charging a percent, you know, in the listing feeds and whatever. I hope it lasts just a little bit longer. I know it's not going to be there forever. But it feels like the internet in the early days, as far as just like, you know, the access of information that we haven't had before and just like the ability to really learn and learn fast without having to pay thousands and thousands of dollars to be doing it. Speaker 1: Yeah. Speaker 2: Yeah. It's it's going to be hard, I think, for AI to to properly implement ads, because you you go to AI looking for facts and truth. Right. If you're looking for a specific product, like show me the absolute best power drill that I can buy. You don't want an ad stuck in there for some cheap, junky product that isn't really the best. Right. So how do you balance that? People are coming there looking for the truth. And also adding ads in there in a way that's not going to tarnish the results that you're giving to people. Speaker 1: It's also going to have to, you know, use the data from that listing. Like, you know, you ask about, okay, well, compare these two. And if the ad is worse than the organic search, what's it going to say? Are they going to build the, you know, the responses to fluff up the results of the sponsored ad, you know, and then the results get buried really quickly. Like the format of, uh, you know, of ChatGPT and, and, you know, some of these other systems, you ask a question and then you ask a follow-up question and all of a sudden you've got just such a scroll that you could pay for an ad that all of a sudden is buried, like, you know, eight scrolls deep. Speaker 2: Yeah, yeah, they'll have to find a way to separate it somehow or implement it in a way that doesn't erode the trust of the system. Because if, if news articles start coming out that ChatGPT is Um, recommending products because they're advertising over other products that are better than people just lose the trust of the platform and go somewhere else. Speaker 3: What's crazy, like just a crazy thought is, um, let's say you're, it's pulling from a website, it's pulling from Amazon, it's pulling from Nordstrom.com, it's pulling from, you know, wherever. Um, And in some of those channels, you can manipulate reviews still, or you can, you know, remove bad ones, or it's, you know, you've just got five stars everywhere. Whereas like, Amazon's been policing it and getting harder and harder to make that happen. You know, a 4.5 is strong. It, you know, it used to be trying to be higher than that. Well, that's pretty strong these days. All that to say, GPT is just trying to pull in results based on those authority of those pages and what's there. I'm sure they don't have a weighting system saying like Amazon's more authentic than this one. And then it's just showing you results. And probably the one, the marketplace that you're able to manipulate or guarantee high reviews is going to outrank You know, an Amazon marketplace. So I don't know. It's just if they're pulling just websites, you know, you can control you. You could write your own reviews on your website if you want to. Right. There's no moral obligation to have them be authentic. So that's just interesting. I don't have a real what are they going to do, but just a thought when I'm seeing the search results, I still have to put it under the context of like on Google. It'd be like, you know, top 10 laptops coming out in 2026. You still have to be like, if you're a smart shopper, You're still like, okay, these laptop companies probably paid to be in this list, this holiday list, but you know, it's not just a true bloggers like opinion about the best 10. Authenticity is everything. It is truly everything in every form of communication, retail, business, everything. It's always just, that's why UGC works because it's the most authentic form right now. And now UGC is getting not so authentic. And so it just moves and we're chasing that. Um, AI, you're wanting to believe that it's like pulling it, but what's going to happen when they start monetizing it and stuff that way. Speaker 1: Yeah, SEO, you know, SEO has kind of come back in the mix now that we have, you know, AI pulling from the internet, visibility. Is is important. Like, you know, if you want to organically rank for AI, SEO, all of a sudden your SEO agencies are going to get a lot more busy, I think. Speaker 3: Agreed. Speaker 2: Yeah. And that's a you know, are we going to go back to the days where, you know, you had on the bottom of your website to all your keywords in the same color text as the background so that you could rank number one in Google? Are you going to be on your own WooCommerce store and putting in a whole ton of positive reviews that look organic so that ChatGPT picks up your product and displays it as the best power drill on the market? Speaker 1: Especially when Amazon doesn't want to show its search results. If you're only on Amazon, now you've got to really focus on your Shopify SEO. Speaker 2: To kind of bring it back around to Amazon, we'll talk about that a little bit more in the next article here, actually, so I won't jump onto that. Do you guys think that is there any reason that an Amazon seller would want to jump on this early ChatGPT ads? Speaker 3: Well, let me answer that like a little bit in the gray. I think that an Amazon seller And I think a lot of people could benefit right now. Sometimes having a Shopify store is just for truth, validation, extra education. Maybe you have a different product offering, but a lot of Amazon native brands shouldn't like put a ton of money into their Shopify site driving traffic. It just depends on their product selection. But I think they should always have a site that's there for trust building, validation, who they are, where they're located about them. It's just that's best practice these days. If all you had to do now was list your products on Shopify under an agentic shopping LLM, like meaning like make it searchable in GPT, make it searchable in Grok or these different ones. I think yes, F yes, you should do that. Because it's a very affordable way to have your products now ranking And you could have Checkout on Amazon on your Shopify site. You could have a lot of things, but you can't just do, you can't list them in the like Google shopping feed of the LLMs right now if you're just on Amazon. But you can if you have a Shopify site or one of those other marketplaces that integrates. And I do think that that is worth the lift. Whether you're running a paid ad or not, or just paying to be listed there, like on Google Shopping, that's neither here nor there. So my answer is yes, I think they should, but not necessarily a $60 CPM, more of like the, have your products listed and showing up in a Gentic search. Speaker 2: Yeah. Yeah, I agree. I think that's super important to have your separate website. Like we talked to the beginning, You know, you got to be building a real brand, a real business and you know, a real brand has a website and typically you can buy it in other locations rather than just Amazon. Speaker 3: Right. It's just otherwise, like if you're thinking about it in like Physical type of thinking. Every once in a while, there's that store that's halfway on the highway between Kansas City and St. Louis that has the best beef jerky and you can only get it there and you got to pop in to buy that beef jerky. But generally, stuff is, you can purchase it more than one place, right? That's a very small like, footprint of like products that you have to get in this very specific location. And I think of it like, e-commerce in the same way. It's very rare to just get Amazon just everywhere. So being just on Amazon still gets you everywhere. But being on just a website is not the same thing. What I kind of hate, that's a strong word, but I love storytelling. I love good branding is good storytelling. And As much as I am a nerd and have a couple of computer science degrees and all of that, I hated the keyword stuffing in the same color on the front of the homepage and the fake reviews. My feeling has always been like, if you want to be a true marketer, a true advertiser, a true brand builder, learn how to storytell. If you want to be compared to the greats or try to be great, and if we're not trying to be great, what are we doing? But that's my thinking. And so like the little hacks bother me, they annoy me because you're just a hack. Like I honestly don't even like to participate that much in little hackathons or top 50 Amazon hacks that someone's been doing 15 years because I just don't want to be considered a hack. I want to be considered a storyteller, a brand builder. And I think if you're building a brand, The hacks are cool, but they fleet, they come and go. And so just do like, you know, think story brand, think like building a brand storytelling, no matter what channel you're in. And if you think like that first, I think you're setting yourself up great. And I think even Amazon content has proven that point. Where, you know, if you were trying to really storytell with your images and content and brand build and doing that the right way, now that Rufus and Cosmo is scraping the images and looking for intent and looking for, you know, what problems you're solving and what the issue is, you're actually set. You're pretty much set if you were doing things the right way. If you were trying to gamify it, you're having to Figure out, okay, well, how's Rufus and Cosmo really evaluating my images and features now? I need to ask, answer questions, not just put features. Yeah, you should have been doing that all along if you were story. So maybe a little bit of a hot take for me right there. But that's how I think about just like the hacking again and being a kind of a hacker versus being a storyteller and a brand builder. Speaker 2: That's a good mindset to keep for sure because that's not going to go anywhere. The hacks are going to come and go. They're going to start working, stop working. And then you're always jumping on to try to find the next one. But if you're focusing on the core, storytelling, brand building, building a real business, that stuff lasts. Speaker 3: And that dictates what you do, where you spend your time, what you spend your money on. You know, a website that's just there because you want to get sales from it doesn't really have purpose or intent. A website that's there to storytell and brand build and build relationship and communicate. Now, all of a sudden, it has a purpose for existing there and why you should do it. Speaker 2: Yep, yep, absolutely. Any last thoughts on that, Chelsea, before we move on to the next article here? Speaker 1: No, I think you guys nailed it. Speaker 2: All right, very good. So let's jump on to this next one here, which kind of tails right into what we were just talking about. Um, so Amazon leads AI commerce traffic, but its own AI blocks could backfire. So Amazon currently leads in AI driven shopping traffic, but recent aggressive blocking of AI crawlers and shopping agents may limit its future visibility as AI commerce. Though just 0.5% of e-commerce today, it is rapidly growing and could reshape product discovery. So I thought this was really interesting. This is a, I believe a year long study that this company did. But the data is only up until May of this last year. So up until May of this last year, Amazon was actually leading all AI traffic. But then this timeline here, so July, Amazon blocked Anthropic, Perplexity, and Google. And then August, they blocked Meta, Huawei, Mistral to the block list. November, they blocked OpenAI. In December, they blocked another 47 AI crawlers. So AI Commerce obviously is still extremely small, but those blocks of course are going to drop Amazon's traffic drastically. So I'm curious your guys' thoughts on the future of AI Commerce number one and if this is going to come back to bite Amazon in the future. Speaker 3: Well, my thoughts on this are If I'm an Amazon optimizer, like I'm trying to optimize my listings, I'm trying to see my brand, what's working, what's not. In the past, like if I was running meta ads to my Amazon listing or some outside traffic, let's consider like AI being kind of like outside traffic in that way. There were pros and cons to sending a whole bunch of traffic that wasn't keyword driven for a meta or a whole bunch of traffic that wasn't validated on intent or any of those things. In the old days, That would crash your listing if you send a whole bunch of traffic that wasn't validated or that wasn't converting high enough because your bounce rate would be up even if sales were up, your click-through rate would be off. And so all the metrics are kind of like, ah, this is chaotic. I think as times have gone, it's changed a bit in regards to They don't punish you as much for sending off Amazon traffic directly to the listing. You just have to like kind of qualify it. But I think there's probably an element of that here, which is like Amazon has this massive algorithm that's constantly learning. They have their own AI. They're trying to train and get better. I have all these things happening and then they have these massive giants jumping into their space that maybe it's not bringing them that much business, but it's throwing off everything they're trying to learn and everything they're trying to do. And so maybe there's a play that like one, they just don't want them to being able to crawl it for free and they want there to be some monetization to be able to crawl it and they're trying to work out that deal. Something else could be that They've been building Amazon's choice with Alexa for years, which is essentially what's the best phone case to buy and it's picking it and it's AI behind the scenes, picking that for you. I think there's a lot of reasons why here. It's probably not a matter of if, but when and is it going to cost you to be there or What does that look like? Because I could just say, I guess, from a thousand foot view, you have 50 new AI crawlers on the market, all just crawling your site bots from all over the world, just up and down your If you look at your catalog to Amazon's infrastructure team, to Amazon's security team, to Amazon's development team, they're like, we got to stop this. This is just throwing everything off. So, and it's like crawled, it instead needs to be listed correctly, which would like have some regulations to it. Like, just like if we want to list on GPT, I was talking about the agentic search, like, oh, there's like a feed, like a Google shopping feed type of process. Maybe that's what Amazon is looking for here instead of it just being crawled and then the information put there. It wants to be more like a direct shopping feed into that. So that's my hypothesis. I have no Data to back that up other than just what I would what I would be thinking if it was my system. Speaker 1: Yeah I was actually on a hacks webinar yesterday with Scott Needham from I Always know I'm not gonna win. So I go on I talk about either inventory or you know profitability and I you know, I'm like I'm not gonna win because my hack is You know, not as much of a hack as it is, you know, or a strategy. Yeah. But Scott Needham, they're doing work in terms of organic ranking for, for AI. And there are Amazon links still showing up. So my thought is that What about the links on other sites? If they're not crawling, they're probably grabbing the links from other sites where they've been posted. So that's a strategy. If you want your Amazon listing to show up, get the link on other sites that might be being crawled, you know, and maybe find a pattern of does Amazon use certain websites, certain data and can I get my links in there? Speaker 3: That's brilliant. I think backlinks or even like the Shopify thing I was saying before, by having your Shopify site optimized for it, you can say click to buy here, click to buy on Amazon, click to, you know, whatever you want to do. Maybe your own site could be the thought authority that, you know, is able to scrape or able to use those links. So that's something I hadn't thought of that's super insightful. Speaker 2: Yeah, you know, one of the ways that I'm kind of thinking about it, if you're again putting yourself in Amazon's shoes, If we think of WWE, for example, World Wrestling Entertainment, they've got a huge IP catalog, right? And every so many years, they shop it around to different places. Right now, they're on Netflix because they've got a huge deal with Netflix, right? In a few years from now, maybe they move to some other platform that pays them more. Could Amazon do the same thing? You know, they've got this huge IP catalog of products. Could they come to ChatGPT or Perplexity or whoever and be like, hey, How much do you want to pay us to get access to our entire database of products? Because that is a big value potentially that they've built up there if it's something that they can shop around like that. Speaker 3: And control the quality and customer experience a little bit too. Like if that's important to them, maybe it takes them from 0.15 to 10% of shopping just by getting Amazon in the right way, done the right way. We don't know really what that lift would be, but letting people just scrape your IP for free doesn't sound like the best idea to me. Speaker 2: Yeah, especially when you're the biggest, you know, you're the biggest, biggest IP content system in the world right now for e commerce. Speaker 3: I mean, I remember way, I didn't mean to interrupt, I was gonna say, um, I remember Early days of Amazon, the brands we were trying to contact to put onto Amazon, images didn't exist, descriptions didn't exist, content didn't exist. It was really the power of Amazon that made so many brands, wholesalers, resellers, agencies, I put in all that work to get product photos for car parts and those kinds of things. To an extent, Amazon has made that happen and that IP, even just from an image standpoint, is massive in regards to just letting another system just take it. Speaker 2: Yeah, for sure. It's valuable content that somebody will probably end up paying for and whoever does is gonna get a massive leg up From versus anybody who doesn't have that content. I mean, if you're, if social, or not social commerce, but if AI commerce grows to be a good chunk of the market, kind of like social commerce is growing right now. If you don't have access to Amazon, are you really AI commerce? You know, if you're missing out on 70% of the products that are on the internet? Speaker 1: Yeah. I was just gonna say they will, you know, it'll be discovered, they'll find it there, but they'll buy it on Amazon. Speaker 3: Do it anyway, right. And Metta and TikTok, I think it was... Last year, the year before, time flies, but, you know, never saw those companies working together. Now, all of a sudden, you can swipe up on social and buy on Amazon with one click. It's, you know, they used to make that really difficult and they made a partnership and we're just like, how did that happen? We didn't see it coming. So probably something similar here. Didn't see Amazon TikTok working together and Meta working together. That's crazy. You know, and so we'll see it. And some of it can be like, they just might not want to pick the wrong partner too early. Maybe it's, you know, signing with OpenAI might be the biggest and Anthropic passes them in six months because of how fast everything is going. So maybe it's just kind of like, let's wait and see who the big player is and then sign with Netflix when we know which one is the big dog. Speaker 2: Yeah, yeah. It's going to be fun to watch. I mean, we're living in a time where, you know, things are changing so fast. You know, ChatGPT is one of the big AI systems right now, but next week it could be someone else and it's going to shift over and over. Same with TikTok and social commerce. Will they be the big dog in a year or two from now? It's hard to say, but it's going to be exciting to watch and see where things go. Speaker 3: Agreed. What I can say is in a year or two from now, Amazon will still be the big dog. Speaker 2: I don't think that's going to change anytime soon, kind of like Google being the big dog of search. It isn't going to change, but new technologies can come out and disrupt. More and more people are starting their searches on AI instead of Google. Speaker 1: Yeah, market share will shift, not as significantly as maybe some people want it to, but there will be people kind of chipping it off. Speaker 3: I think, again, this is a good reminder that when you think about e-commerce, think holistically. Think about all of your channels together, blended ROAS. How does everything work together if you're running ads? You've got a 2.0 on Meta and a 3.0 on TikTok and a 6.0 on Amazon. You're thinking about everything blended. And at least as it's true today, that Amazon is the best converting channel that there is. I don't care what you say. And right now there's a lot of competition for what's the traffic driver, what's the best traffic channel that's still up for debate. But I think for the foreseeable future, Amazon still converts better hands down than any other channel. And if you think about it like that, it's like, what can I utilize to drive traffic? And still Amazon is a centric focus if you're in the Amazon game. And Amazon is still your cart. Amazon is still your conversion baby if you're driving from TikTok or Meta or AI or Google or whatever it is. Speaker 2: Yep, 100%. All right, well, Chelsea, Andrew, good to have you on the show. I think we'll wrap it up there. And everybody out there watching, we do this every Thursday at 12 p.m. Eastern. So hopefully you'll join us next week, but yeah, Chelsea, Andrew, appreciate you coming on. Speaker 3: Thanks for having us on. Hope you guys got something out of this. It's fun just chatting hypothesis and what we think is coming down the line. It's even fun sometimes to eat your own words when it comes out and you're like, I didn't see that coming. It just keeps us on our toes. So thanks for having me on and getting to chat it back and forth with you guys. Speaker 1: Yeah, it was fun. Appreciate it. Speaker 2: Have an awesome one. Unknown Speaker: This has been another episode of the Amazon Seller School podcast. Thanks for listening fellow Amazon seller and always remember success is yours if you take it. Speaker 2: Hey, if you made it this far in the show, I really hope you enjoyed it and I'd like to ask you a favor. Could you head on over to Apple or Spotify or wherever you're listening to this and leave us a review? It would be greatly appreciated and would help us continue to grow the show and offer more episodes for you. Thank you. God bless and have an awesome day.