Amazon News: Etsy Shrinks, FBA Tightens, and TikTok Teaches Surprises

Amazon News: Etsy Shrinks, FBA Tightens, and TikTok Teaches Surprises Unknown Speaker: Welcome fellow entrepreneurs to the Amazon Sellers 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: Hey everybody. Welcome to another episode. There we go. Got some nice effects in it. Very nice. Love that. All right. So yeah, another Amazon seller news live another Friday here. Appreciate everybody out there joining us. We've got some good news today. Some, you know, is Etsy tanking, some FBA predictions, some tick tock shop statistics from simple Simple Modern, and then some top talent tips from Nathan Hirsch. So a lot of good stuff today, looking forward to it. How's everything going over on your end so far, Dane? And you said you're a little bit under the weather, but I appreciate you joining us. Speaker 1: Yeah, sure. As I was saying, I was going to cancel, but since it's just you and I this time, I decided, you know what, I'll just come on. And so for everyone that's watching, I apologize if I have to mute and go off to the side and cough and stuff like that. But I'll be right as rain in a day or two. I'm already feeling a lot better and things are going quite well. Thank you for asking. Other than being a little under the weather, things are going very well. Speaker 2: Yeah, we'll pray that you get healed up because you're going to be hosting some stuff over at the Prosper Show and definitely don't want a cold when you're dealing with that. Speaker 1: No, no, I'll be good. I'm majorly on the mend now. I'm just stuffed up now. I feel so much better. Speaker 2: Yeah, for sure. All right. Well, awesome. So it looks like we've got some people streaming in and watching the show. So appreciate you guys joining us. If you're watching and you have any questions, comments, concerns, whatever, just throw them in the comments and we'll try to bring them into the show and answer them or talk about them, whatever the case may be. So without further ado, let's go ahead and dive into it here. Speaker 1: Let's do it. Speaker 2: So Etsy loses 1.4 million sellers as marketplace momentum slows. Etsy's active seller base has dropped from 7 million to 5.6 million, marking its third straight quarter of decline. The platform also saw a dip in buyers and overall sales, signaling broader challenges beyond just seller attrition. While some of this decline may be due to Etsy cleaning up counterfeit sellers, data shows new seller signups have sharply fallen since the pandemic peak. For Amazon sellers, this highlight the key contrast, Amazon and Walmart marketplaces continue to expand, while Etsy appears to be losing momentum in the handmade space. So, Danan, initial thoughts on that. Speaker 1: So, you know, during COVID, we saw a lot of peaks of certain things, of course, also a lot of statistical dives as well. I'm wondering, my initial, my gut reaction was, well, maybe they're just cleaning up. But then since both customer base and sales revenue has fallen as well, it makes me wonder, was this a flash in the pan? And I would, but I would think that when buyers go there, well, let's see, I know a lot of people went to go and get handmade masks and stuff like that. So that would make sense. Maybe we're just seeing COVID-related sellers just drop off and buyers as well. So it could just be that. Speaker 2: Yeah, it could be. My gut tells me that it's more to do with Etsy no longer kind of being the, um, losing its, uh, what would it, what would it be called? What makes it shine, right? What makes it special when they opened it up to all of the drop shipping and foreign sellers and stuff like that. That's right now, you know, what is the purpose to shop on Etsy versus Just making it easy and buying it on Amazon along with all the rest of your stuff. Speaker 1: Yeah, so I just, I was just checking. I wonder if, yeah, because I remembered, I think we mentioned this in a different episode where Etsy opened it up just like Amazon did. They opened up to China to be able to fulfill direct and that's, you know, we saw the hit for that. Amazon, of course, made a ton of money, but as soon as they opened it up to these mass-produced products, which I'm not sure exactly when that was, but I know it was fairly recent. I guess it's not too surprising that these people, maybe they're going on to Shopify. Speaker 2: Yeah. Yeah. I mean, there's been a big, a relatively big revolt, at least a lot of news about upset sellers and things with the changes that Etsy's been doing. And so, you know, I feel like it's an example of a niche marketplace that was doing really well that tried to expand into a general audience and basically is destroying itself because of it. Yeah. Speaker 1: You know, this happens so often in business that you capitalize on a market And then you go, oh, well, we've done it here. Why don't we open it up to everyone? Or why don't we off? You know what? A perfect example of that is service providers. Hey, we do ads. Oh, cool. Let me also do SEO. And, you know, and then I'm not saying everybody has this, but there are definitely a fair number of agencies that said we're a full service agency and they're great at one thing and garbage. Or just mediocre at something else. And, you know, that's, that's because they want to capitalize on the revenue of offering other things, you know, and, but they, but they, excuse me, but they're no good at it. So they have no business doing, doing that or offering that. I, and I see no difference here at all. Speaker 2: Yeah, it's tempting to always offer more things and do more, especially when people are asking for stuff, like you mentioned with the PPC and then somebody's asking, well, can you do my graphics? Well, sure, I guess we can do the graphics, but you're mediocre at the graphics when you're excellent at the PPC. And then you start getting a bad rep or a bad representation of your business based off of maybe some mediocre graphics or whatever the case may be. And so that could be same kind of thing here. Etsy was great at the custom products and tailoring to that market. And now they're opening it up to be more like Amazon and they're just mediocre at that. Speaker 1: Well, I'd say less than mediocre if they've lost what almost 20% something like that. Speaker 2: Yeah, and they were growing rapidly since this graph I'm showing here goes from 2020 where they were at, what, about two and a half million there in 2020. It was just a rapid rise up to about seven million in the first quarter of 2024 and just a decline since then every quarter. Speaker 1: Now, given that we're looking at four years here, I would expect there to be some equalization, right? So maybe what we're seeing is, yeah, all these people, they sold one item, at least one item in the last 12 months, and they got on there because it was easy and there was a ton of advertising going behind it. And they're like, cool, sold that item. And now we're just equalizing. It wouldn't surprise me if we landed somewhere around five million, five to six million, and it just kind of equalized. But at that point, they still more than doubled their seller base in the course of five years. That's a hell of a thing. Speaker 2: Yeah, it'll definitely be something to watch. I mean, the negative side of that is that Walmart and Amazon are still rapidly growing their seller bases. Speaker 1: True. Speaker 2: And to see a shrinking seller base when your competitors are growing is not necessarily a good sign. But if Etsy can refocus on its core of handmade, They don't need as many sellers to focus in on that. A marketplace like Etsy doesn't necessarily get better by adding millions of new sellers every year. Speaker 1: Yeah, that's true. I mean, I think we have all seen that as Amazon grows, it gets worse and worse for us sellers in terms of, I mean, I would never say that there's not an opportunity there. I would just say it gets more and more complicated and things become a bigger pain in the butt the more they grow. Speaker 2: Yeah, yeah, definitely. Everything's going to be harder and logistics is the big thing, right? Etsy doesn't have any kind of logistics like Amazon has. So their sellers don't get any help delivering products. They're just, they've got to use UPS, USPS and fulfill out of their own warehouses or use a 3PL or something like that, which I doubt most Etsy sellers are using. Repeal unless they're the you know the drop shippers and the bulk manufacturers that started selling on there yeah. I just recently bought a couple. I have two garden flags for Easter. One has lent on it and another one is for Easter, for he has risen it has on it and stuff like that. The only reason I bought it on Etsy is because all the sellers on Amazon were from China. I went to Etsy and there was a bunch of US-based sellers that I was able to buy from. But otherwise, most of the products were also on Amazon that I was seeing on Etsy. Speaker 1: I'll say it again, I was so pissed when Amazon got rid of the checkbox to display only US-based businesses. I was so bummed they did that because that's how we shopped. We only wanted to buy from US-based businesses. Speaker 2: Yes, I do it with the Helium 10 plugin. That's how I do it at this point. If I see the red flag, I just scroll by all those listings until I see the US or Canada or some European country or something like that. Speaker 1: Yeah, that plugin is free, right? Speaker 2: I have no idea. I've paid for it for so long, I don't know if it's for free or not for sure. Speaker 1: Okay, I think... Speaker 2: We've got one... Comment that came in, Meraz Hassan says, that's exactly right. With Etsy losing 1.4 million sellers and increasing FOB costs, TikTok shops cross-channel sales data offers some really important insights, a detailed discussion on how the selling strategy should be designed in 2025 will be very helpful. What will be discussed in today's live screen will surely be valuable for everyone. Speaker 1: Yeah. Thank you. Speaker 2: Kind of sounds like an AI reply. I'm not sure. Sorry if it's not. But yeah, TikTok shop is coming up actually. We're going to be talking about it here in a couple posts. So we're going to be talking about TikTok shop. But yeah, he brings up a good point actually. Could part of that decline be because of TikTok shop? Speaker 1: Yeah. I don't see why not. We're in it today, so we can only speculate, right? In five years' time, in 10 years' time, we'll be able to go look back at these live streams. Not that we'll ever do that and be like, oh, we were totally wrong. It was this. It was briefly, briefly. Speaker 2: We'll ask AI. Speaker 1: Exactly. Speaker 2: Hey, was I right in my predictions back in 2005? Exactly. Speaker 1: Actually, you know what? Do we get the transcript from this? Speaker 2: Well, when you upload it to YouTube, yeah, it auto-generates a transcript. So assuming AI will have access to that, then it will be there, yeah. And also the show notes are on the website, so. Speaker 1: Okay, maybe we should feed everything into a notebook LM and then just as we go like, hey, were the predictions correct? Speaker 2: Yes. Speaker 1: It would be a fun little project. Speaker 2: Yeah, yeah, there's a lot of AI bots that you can build like that. You know, you just feed in everything you've ever created, videos, audios, transcripts, and everything else, and then it basically tries to act like you and answer questions in your voice and everything else. Unknown Speaker: Yeah, yeah. Speaker 1: Well, I think we've got Jungle Scout, a report from Jungle Scout next, right? Speaker 2: Yeah, absolutely. Let's go ahead and jump on to that. So Jungle Scout read least their predictions. Let me jump to that. Prediction, I don't have a summary for that for some reason. That's all right. So Amazon FBA predictions for 2025 what sellers need to know. So Jungle Scout Made some predictions. I think most of them are relatively common sense. Some of them we can maybe debate. But Jungle Scout is predicting stricter compliance requirements and policy updates impacting sellers. I mean, we see that all the time. Speaker 1: That's just always happening. Speaker 2: Yeah. I'm dealing with a product right now. It's a slow seller for one of the brands that we sell in It's like a topical category, I guess, creams and stuff like that. And they were classified as skin changing products or skin coloration changing products. And we had tried to appeal it, the appeals that declined. So they want us to go through and do all this testing and stuff like that. And the brand is just like, It's not even worth it. Let's just not sell them. They're only selling like 20 or 30 a month anyways. Unknown Speaker: And so... Speaker 1: Yeah, that's a tough one. How much is it going to cost to get all that done? 10, 15 grand? Speaker 2: We didn't get that far in the process because I first requested what it would take for them to do it. And so they sent this big long list of all the information that they needed. And one of the things is they have to be registered with the FDA and get paperwork from them for cosmetics under the cosmetics category. And so that's a whole thing of itself. And so they didn't even want to go through that whole process of messing with it. They're a Canadian company, so they still sell it. Fine in Canada, no problem, but they're just not going to be able to sell them in the U.S. Speaker 1: That's too bad. I mean, there is a huge market for beauty here, that's for sure. Speaker 2: Yeah, for sure. Speaker 1: Yeah, I did. We did a brand called Tequila once. It was a three-stage process. Honestly, I don't even remember what it was, but it was like a serum and a lotion and eye lotion or something like that. And we did a very bad launch, very bad launch of it. And we still sold a fair amount of that. And I mean, there's just, there's such a big market for it, but it has gotten much more competitive. That's for sure. It's one of the most competitive markets. Speaker 2: Yeah, and you know, I've said it before, a lot of people complain about the stricter compliance, which I get, I've complained about it as well. But the bright side of that, the good side of that is that, okay, this brand that I work with, They've chosen not to sell those products anymore in the U.S. They're going to just keep selling their better sellers in the U.S. And if something comes up, we'll deal with the compliance on those because they sell really well. But that's two less products in that market. Less competition in that market because of the compliance requirements that they're choosing not to go through. So if you're the one who jumps through all the hoops and gets through the other side, there could be a bigger pie for you. Speaker 1: Absolutely. Yeah. I think it's a good thing. Now, could they do a better job of it? Yeah. You know, a better job of enforcing it. You're darn right they could. You know, an example was when brand and product gating was first introduced, I'd been selling A supplement for like five years on Amazon. And then they did product gating for supplements and they just said, oh, you can't sell this. I'm like, the hell are you talking about? We've been selling this for five years. Like, oh, no, no, you're not allowed. So there's. Yeah, it's it's they could do such a better job of implementation and management and enforcement. I think it's a good thing because if you have these junk companies coming in trying to sell products and there's no barrier to entry there, then what do you get? You get a whole bunch of People leaving negative reviews on your product to crash you down and then taking your buy box or putting their product on yours. I just saw an Instagram from somebody today. I sent it to you, Todd. I don't have it, but basically there's this fairly big supplement seller that's got like 20 different people selling his product and he can't get Amazon to take it off even though he's got brand registry and all that stuff. Speaker 2: Oh, wow. Yeah, that's so annoying. I haven't dealt with 20. I've dealt with one, but definitely not 20. Now, are those resellers? They're not like knockoffs or anything. They're just resellers? Speaker 1: They're knockoffs. Like this guy says in his video, yeah, he's the only one that manufactures this product and the only one that sells it. So they're fraud. Speaker 2: That's annoying. I feel his pain, especially when it's so obvious that they're knockoffs. To any human that looks at it, you know in a minute or two that they're knockoffs of the product. Yeah, it's hard. Dealing with the one seller that we had that was obviously a knockoff coming from China, selling at half the price. Amazon wouldn't take it down until we got the product delivered to us. And that took like a month. Speaker 1: That's the other thing. Yeah, exactly. That's the other thing that is total bull, that you have to buy the product. What if you have 10 people? What if you have 20, 30, 40, 50? So you got to go out and spend five grand, two grand, three grand, whatever it is, to buy all this product and wait while they're killing your sales and taking them and bankrupting you, let's just say, because probably that's what's happening. I think it's baloney. Like, you know, this is not a new thing. This has been happening for over a decade. Speaker 2: Well, and the other part that's angering as well is that, you know, eventually we got the seller removed, right? So Amazon finally was like, okay, yeah, obviously they're not legitimate. But then Prime Day comes around and we can't run Prime Day deals because it's going off of the $14.95 that they were selling it for when it was a $30 product. It's little things like that that are annoying where one hand doesn't talk to the other. We could have opened up a case and stuff and maybe fought with seller support, but that probably would have been ring around the rosy kind of thing, I'm sure, because they would have had no clue what we're talking about. Speaker 1: Yeah, exactly. This is the stuff where if Amazon just legitimately listens to not just the big sellers, because I know there are some very big sellers that they tell them what's going on, but there's got to be some sort of system where It just goes, oh, if some seller fraudulently sells this product, let's remove all data affecting the account or the product for that. I mean, it's common sense. Speaker 2: Yeah. Yeah. Speaker 1: To me. Speaker 2: Well, the other thing is, you know, the so we're not going to talk about it in the show, but Amazon is challenging the ruling that they're liable for recalls and stuff like that. So that makes me think about, you know, so so we proved that that seller was selling fraudulent products. Shouldn't Amazon recall all of those products that were sent out to customers, reach out to them and be like, hey, these were fraudulent products that we allowed to be sold on our our website. Yeah, even though we knew that they were fraudulent because the brand told us so. Yeah, yeah, I feel like there's something there in terms of liability for sure knowingly selling fraudulent products like that. Speaker 1: Yeah, well, I hope I hope this goes in our favor. Do you remember when we used to have to remit state taxes for every sale we did in every state and how horrible that was and there was only tax jar that could be used and it was super expensive and now Amazon does it for you and they charge you for it and I happily pay that extra penny or whatever, but that was something that happened in our favor, but that took years. Speaker 2: Yeah. Yeah, that one was becoming a nightmare. If Amazon wouldn't have stepped in to do that, that's just, I mean, what a hassle. I mean, that would have destroyed a lot of companies. Speaker 1: Yeah, let's be honest. They didn't step in. Speaker 2: Well, yeah, they were forced to, for sure. Speaker 1: Yes. Yeah. Yeah, because on one side, they'd say, hey, nope, Amazon customers are Amazon customers. These are not your customers. Oh, you have to pay taxes on your customers' purchases. Speaker 2: Yeah. Yeah, that's a good point. They always talk about that, that these are Amazon customers, not your customers. And then they turn around and say, well, we're not liable for anything that's sold on our platform because it's not a product. Right. Speaker 1: Yeah. Speaker 2: Make up your mind. Which one is it? Speaker 1: Oh, no, no, no. Amazon will have made up their minds. It'll be. We carry no responsibility or all responsibility unless it's inconvenient for us or makes us look bad. Then it's your fault and we're going to punish you for it. Even if we did it. Speaker 2: 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. Yep, for sure. You can't expect anything else. It's just kind of the way things work with a company that's the size of Amazon. They don't exactly have morals or anything when it comes to that kind of stuff. Speaker 1: Yeah, that's true and it has grown to such a level. Do you remember that Reddit post about the person that just made every case that came across his desk against Terms of Service or they were breaking Terms of Service? I can't remember exactly what it was. That's a perfect example of that. Speaker 2: He just auto-declined every appeal, I think is what it was. Speaker 1: Yeah, that's what it was. Costing businesses literally millions of dollars because he was afraid that his statistics would look bad on Amazon and he got acknowledged, he or she got acknowledged for doing a good job. Like this is this is the problem where where just making yourself look good is more important than doing a good job. Speaker 2: Yeah, I had an issue with seller support yesterday actually. So one of our products went down because we have a trademark term in the product because it works with that trademark product, right? So we have that, you know, fits this, this, and this, and this, and the brand names that it fits with. And so they took it down. And so I opened up a case and said, this works with, it fits with, this is all under terms of service and everything like that. And they replied back with the stupid scripted response of no response. So I opened up a chat and the guy, I replied to him, I'm like, hey, this is under the works with terms of service, shouldn't be a problem. And then he replies like, what can I help you with? I'm like, well, can you see the rest of the case? All the information is in there that we've been having a conversation around. And then he replies again. He's like, that's what I'm trying to figure out. What can I help you with? I'm like, Can you not see the case? And then he's like, oh, let me look and I'll get back to you. And he never came back. The chat just sat there for like a half an hour with no more replies to any of my messages. Unknown Speaker: He was just being lazy. Speaker 2: He didn't want to read the case. And instead of actually trying to help, he just, I don't know if he disconnected me or just put me on hold or whatever. Speaker 1: Yeah, I would have assumed that this person would have closed the chat because, you know, it used to be that Amazon graded you on how fast you closed cases. And that's when we had those two years of just like you put in a case and it gets closed as resolved without any response or anything. I'll bet you that he he's going And just leaving that open to put time on the clock. And then you can say, hey, look at how many cases I've resolved over this period of time. This one took 30 minutes, but I got it resolved. That one took 35 minutes in the same hour, you know, and I got both of them resolved. I'll bet you that's what it is. You should try responding today. Unknown Speaker: It could be. Speaker 2: I should check the case again because, you know, I closed the chat and I went back to the case and I just sent a message by email. And when I went into the case, the chat conversation was not in the log at all. So I don't know if he removed it somehow or if it was just not there yet. I'll have to look today and see if it's there. But, you know, these kind of things are not rare. They happen every day with support and have lots of products. So, yep. This is very frustrating. Speaker 1: It is extremely frustrating. Speaker 2: Prediction number two, which this is going way out on a limb, FBA fees are going to go up and changing storage costs. So yes, fees are going to go up, storage costs are going up. Speaker 1: I don't see that happening. Amazon said they weren't gonna do it anymore. They're definitely gonna stay to their word. Speaker 2: Yeah, well, let's see. We've got, how many days are in this month? I don't know. So, we've got like nine or 10 days before fees go up on April 1st for AWD storage and receiving and shipping. Speaker 1: So, yeah. I told everyone that, you know, that went into AWD and What's the other one? AGL. That they pull you in with these lovely rates and then they lock you in and you're committed and then they They slowly raise your rates. Speaker 2: Yes. Yeah. Using AWD makes sense for some products, but you always got to be watching the fee increases and stuff because that can change at any moment. Speaker 1: Yeah. And what was it that they offered? There was no... They got rid of the inbound costs if you were using AWD and maybe some other percentage decrease. Was that what it was? Speaker 2: Yeah, you don't pay any inbound placement fees and you can ship everything to a single location, which is the main benefits. But what's changing is previously they did not charge any receiving fees. They only charged a fee when it left the AWD warehouse and went to FBA. Now, they're splitting that and charging half on receiving, half on shipping out, and they're also increasing the storage rates. Speaker 1: There you go. Speaker 2: They were getting killed on the front end, I think, because everybody was sending their inventory in there and they weren't getting any money for all the receiving they were doing into those warehouses. And as long as it sat in the warehouses, they never got those receiving or shipping fees, just the really low storage fees, which they're still relatively low. They're more comparable now to a lot of 3PLs out there. But still on the low side, for sure, for the storage side of it. A lot cheaper than FBA. Speaker 1: Yeah. Yeah, well, it won't be forever. Speaker 2: No, definitely not. Nothing is forever, especially in e-commerce. Speaker 1: Yep. Speaker 2: So AI automation reshaping Amazon fulfillment. This one I thought was interesting. You know, they're predicting AI driven inventory forecasting and AI powered customer support taking over a lot more. Speaker 1: That that could that could be better. Yes, but I mean. You won't have to wait as long. But how many times have you put data into an AI and then asked it a question based on the data and it gives you a completely wrong answer? Speaker 2: Yeah, definitely. Speaker 1: All the time. But if they did a good job of it and their team goes, hey, let's list out all of the most common questions and what is the real legitimate answer based on TOS, policy, etc. Okay cool and if you can but the problem is when the problem is gonna come to when you have to prove. Something when you have to provide data and. I found out that amazon was using a version of AI. Many years ago for forms that you had to fill in for supplements and because I had a misspelled word in the form, I kept getting denied and I spent hours, just hours on the phone. I finally got to somebody in support in England and I said, Is this form just being read by a computer? And he's like, yeah, it is. I'm like, oh my God, that's the problem. So this is one of those situations where if you don't cross your T's and dot your I's, you misspell a word, you got anything wrong at all, you're just gonna go back and forth on a denial. I see the launch of this being a massive problem, but maybe eventually you get actually better support. Speaker 2: Yeah, for AI powered customer support in particular will be great for all of your basic stuff. Like the questions that probably 75% of people ask Amazon support, it'll probably be really good at that. It angers me all the time because I'm the kind of person, I've already done all the basic stuff and tried some of the advanced stuff. So by the time I go to support, I'm already beyond 95% of the information the chatbot is going to give me. And so for me, it's just annoying because then I got to try to figure out what do I need to type to get to real support. It's basically the battle that I end up finding myself in. Speaker 1: Yep. Speaker 2: So the, uh, You know, we're already in a situation where almost no company has support anymore. And I think with AI, that's just going to take it to the next level where no one's going to want to offer like real life support. And so for a majority of people, that'll probably be fine. But for those of us that do the more advanced stuff, it's just going to drive us crazy. Speaker 1: Yeah, I see a place for companies like Simply Works and Seller Candy. I see an expansion of those services to help you with your complicated support issues. Speaker 2: Yeah, yeah, for sure. You have to go to a special consultant or an agency just to get your support questions answered because you have to know the proper escalation path to get to a real live person. Speaker 1: Exactly. Speaker 2: Yeah, for sure. Or you just create an AI bot that can battle with the AI customer support bot to get to the real life. Speaker 1: But then that would be against terms of service. Of course, that would be against terms of service because, you know, then you're using up Amazon resources to win your way. And then they, whoever created that AI gets sued by Amazon. Speaker 2: Yeah, yeah. Speaker 1: Probably i'm sure they'll put that in there for sure if i have genuinely considered going and getting a job at amazon to see if i can just go in and help. Clean stuff up because as a seller of 15 years on Amazon, I've seen the progress from 2010 to today and there's just so many things where it's like, no, if this, then that. And you'll just have it solved in 30% of the amount of time. Speaker 2: Yeah, I feel like in a bureaucracy that Amazon has become, people like you and I would just be driven crazy. Speaker 1: Oh, for sure. Speaker 2: Unless you got a leader like Elon Musk, who's willing to just go crazy on companies, it's just going to drive you crazy because you're going to have tons of suggestions and know how to make things better, but you're never going to see things actually implemented half the time, if not more. A super majority of the time, unfortunately. Speaker 1: Yeah. Yep. I agree with you. Speaker 2: Yep. Social commerce and external traffic driving more Amazon sales is their next prediction that platforms like TikTok, Instagram, and Facebook are going to be increasingly important for driving Amazon sales. Speaker 1: So, Amazon did partner up with TikTok. In some capacity, they announced it at the last Accelerate. And I agree with this. This is not something new. This has been happening and becoming more and more sophisticated for years now. Back when I launched my beauty product, I just found micro-influencers on YouTube and then had them link directly to my Amazon listing. And that was successful. Now, you've got these TikTok influencers. You've got Levanta and Levanta, their influencers have webpages and TikTok and Instagram and all that kind of stuff. And these blogs on the best products for whatever. And so it's just been getting more and more sophisticated and organized. I also, however, on the influencer side of things, I also predict a decrease on on that being as effective as people wise up to the fact that this video is bullshit. Yeah, because they got paid to do it. Speaker 2: So if I'm always telling my wife that because she'll see something on Instagram. And I'm like, yeah, they're probably getting paid to do it, or they're an affiliate. You can't even trust half those people's opinions. Well, super majority of them, I would say. They're just pushing whatever product is paying them the most. Speaker 1: Yeah. A perfect example of that is I was this close to buying a desk from a company called Secret Labs. In fact, they make this chair that I have. Oh, Secret Lab. At the end of the day, with it fully spec'd out the way I wanted it, it was $2,000. So it's a fairly expensive desk, right? For an office desk. It's a sit and stand desk. And I went on the hunt for videos that were not sponsored by them. I found like one or two. And it's like, then I went to competitors and I found this company called DeskHouse, spelled H-A-U-S, DeskHouse. They're in America and they, of course, buy materials from all over the place, but they're American made, American... No, actually, I believe they manufacture their stuff in Wisconsin or something like that. And they're of a similar price. They did a side-by-side comparison and the desk I was about to buy was crap, but nobody ever raised this desk up and poked it with a finger to see and it wobbled back and forth. Then they did the same thing to their desk. I'm like, okay, I'm getting a four-post desk, not a two-post desk. It's getting hard to find and legitimate review videos. And so I think that the buyers are going to get more and more wise up more and more to this being baloney and looking for the legitimate stuff. But there's no question it works today. Speaker 2: Yeah, yeah, yeah, you know, you used to, it used to be really easy to know who was just trying to sell you something, you know, you know, the used car salesman and, you know, the Q, what was it, QTV, Q? Speaker 1: Oh, yeah. Speaker 2: You know, those online, the TV sales platforms, I forget what the name of it is, but It used to be really obvious, you would know pretty quickly who was trying to sell you something. And then on YouTube and places like that, those are a lot of times more legitimate reviews. But now the just fake reviews and promotions and everything are just everywhere. It's become an entire industry, so you can't really trust Any video that you see anymore. Speaker 1: Right. Now, one thing that YouTube and a few other places have done to try to circumvent that a little bit is that you have to mark that you were paid or that this is a sponsored video. So there is that. Now, if you do legitimate videos and you still got it on sponsor and All you have to do, all those people have to do is say, look, I was sponsored, I was given this with no strings attached. This is my honest opinion. And if I didn't at least like it, then I wouldn't have done a review and told them, nope, I'm not gonna do it. So those types of videos, I think most of these people are gonna have to, these bigger influencers are gonna have to move over towards. But yeah, we'll see. Speaker 2: Yeah, there's always going to be a market for it. Speaker 1: For sure. Speaker 2: But I do think social commerce is going to be huge going forward. It's just people love that style of shopping. My wife is just always seeing things on Instagram that she likes. My wife's mother, we get packages at the door from this This lady that she watches on instagram it's like a you know it's like the old school. TV shopping network but yes on instagram qvc qvc there we go yeah. Speaker 1: Yes yeah and and i think that amazon i i can't i could be wrong but i believe they're they decided to reinvest into the amazon influencer in some capacity because. That's the new age version is live streaming these products. That's the new age version of QVC, right? You find somebody who you like and it's not just a TV show that's on 24-7. This person says, hey, I'm going to live stream this time. Speaker 2: That's going to be the thing. I think it's already happening to a point where people are waking up and realizing that they can't trust any of these influencers for the most part. It's kind of like if you go way back when TV first came out and if you saw it on TV, It must be true. It must be a really good product. They say so on the advertising. Speaker 1: As seen on TV, man. Speaker 2: Yeah. Now everybody knows everything you see on TV is a bunch of bull. And so I think there's been a period with social media where people see all these influencers and they're like, oh, this must be really good. And now people are going to start wising up to that. And so that's going to get harder and harder. And trusted influencers, like you said, are going to be worth a lot more than just your random. Speaker 1: Absolutely. Yeah, absolutely. And they're going to be one of the ones making all the money. Yeah, deservedly so. Speaker 2: Um, this next one, AI optimized advertising becoming more prevalent on Amazon. I think this one is a little bit of a controversial topic. Some people say AI driven advertising is horrible. And I'm here to talk to you about how to sell on Amazon. And I know that you should do it manually and other people swear by it. So what do you think, Dana? Have you played with both of them at all or with AI advertising, I should say? Speaker 1: So I haven't personally done it, but one of my partners, August, who does our PPC cleanups, and we don't actually run PPC for people. We just go in and fix stuff He said he's used most of them, there's a lot obviously, and he still prefers to do it manually. He's okay with PPC, with AI reporting and suggestions, but he has universally said that all, and I'm sorry for those of you that are my friends in the space, and I'm sure they're not not the story isn't the same for everyone but my my partner said universally all PPC met a IPC management systems do not do a good job because, I don't know why, but he, so for anything that he does and he manages just a few accounts and his self and a couple of our buddies, he does it manually. And we use ad labs for our, for our tracking and because you can, there's some really good bulk operations in there, but, but, Yeah, let's see. They actually just released something the other day. Speaker 2: At Labs, you said? That one there? Speaker 1: Yeah, yeah. And not that I'm trying to plug this, but I think if you use the code Danan, you get like an extended trial or something like that. Speaker 2: Okay. Speaker 1: I think, let me, I met these guys, yeah, I met these guys at Accelerate and I got on the phone when I was sitting down with them, got on the phone with August. I was like, hey dude, this is, what's your questions? And I just asked him, answered and And we sat down for probably half an hour while August asked him a bunch of questions like, yeah, cool, I'll try it. And so he's converted all of his management over to them, which for me, he's been running ads since ads dropped, since ads was released on 3P. So he really, really knows his stuff. And he's a profit kind of guy. He's not a launch or anything like that. He optimizes for profit. And so this is what he said is the best. Speaker 2: Okay, very good. Yeah. Yeah, I'm torn on the AI advertising. I think it could definitely be beneficial for some things, but you're going to want to be manually verifying for sure. Yeah. AI giving you recommendations and telling you what it thinks it should do would be good, but having someone who knows PPC and knows the product, Is even more important, I think, and knowing the industry and the category really well. I was going to be better than AI, at least right now. Speaker 1: Yeah, until and then also you have outside influencing scenarios, right? Let's take COVID. All right, cool. Now everybody makes face masks. But if you were trying to stay in an ACOS of 20% on that product in 2020, well, guess what? You'd get zero sales and you'd stay at that ACOS. So there's just... I'd be surprised if there was ever a day where you could just fully trust AI without human verification. Because AI is trained on the opinions of whoever wrote whatever the hell they wrote on the internet. It doesn't make it right. Speaker 2: Yeah. And as we all know, like you said, AI gets it wrong all the time. Speaker 1: All the time. Speaker 2: The one that I always like to bring up as I have is, you know, I asked it to give me the highest peak in all 50 states. And I think the first time it gave me like 48 states and then I said, you're missing two and it gave me 54 states. It's like, okay, definitely not going to trust you going forward after that one. Speaker 1: Yeah. And another thing is like Dolly, for instance, that's the one that you use to create images. If you, this is, this is another, a visual example of how the AI is trained and what it's capable of doing. If you tell it to create an image of a watch at 12 o'clock, you'll get 1010. Speaker 2: 10-10 in Dali. All right. I wonder how Grok does on that. Speaker 1: Let's see. Share your screen on that. Speaker 2: Let's see. Create an image of a watch, you said? Speaker 1: Yeah. Speaker 2: At 12 o'clock? Speaker 1: Yeah, just 12 o'clock, 12, 15, whatever. It doesn't matter. Speaker 2: All right. Let me bring it over and we'll do it live here. Let's see what kind of image it gets. Create an image of a clock. Speaker 1: A wristwatch. Let's go with a wristwatch. Speaker 2: Wristwatch at 12 o'clock. Well, Grok is supposed to be super advanced right now, right? So, we'll see what it makes. It's got the newest data set out there from all of them. So, we'll see what it does. Speaker 1: Yep. So, we've got an 8 o'clock. A 1 o'clock, oh no, a 12.20. 12.20. 12.05. 1.55. And 1.50. Yeah. I'll tell you that. Speaker 2: None of them were able to get it. Wow. Speaker 1: Yeah. So that, I tell you, that is a lot better than what Dolly can do. Actually, let me just, I'll use the same prompt. It was, what was your prompt? Create an image of a wristwatch at 12 o'clock. Speaker 2: But still something so simple and it can't do that, but yet you're gonna trust it with thousands or tens of thousands of dollars a month to run your ads for you. Speaker 1: Yeah, so this again just points to the fact that an AI is only as good as its training, right? Okay, so I use the exact same And I essentially got two wristwatch, here, let me share my screen now. Speaker 2: Yeah, I like on the one image here, it put two watches on one wrist. Both of them are at different times. One of them has four clock counters on there, four hands. Speaker 1: Yeah. Are you seeing my screen now? Speaker 2: No, I do not see your screen. Speaker 1: All right. Oh, I see. I need to... There we go. You should see it now. Speaker 2: Yep. I got it. Speaker 1: Cool. Speaker 2: Add to stage. It's not letting me do that. Let's remove mine. Add yours. There we go. Okay. Speaker 1: Yeah. So there you go. Speaker 2: Yeah. It's a very slick looking watch, but neither of them are at 12 o'clock. Right. Speaker 1: And here's the reason why. If you go to virtually any Advertisement for a wristwatch. 1010 is the most attractive looking time on a wristwatch. Speaker 2: Okay. Speaker 1: And so all of the, yep. So all of the images available, not all of them, but a significant number of the images available on which Dolly is trained, those say 1010. Yeah. Speaker 2: Yeah. That makes sense. Yeah. Yeah. That's, that's just what I'm talking about. You got to be careful with AI. It's great for so many things, but it can get things wrong. I've, I use it to code, write code a lot, you know, app scripts to manipulate data and spreadsheets and it does really well, but sometimes I'll copy and paste the code in and it'll get an error or I'll say, you know, something is wrong. And then I'll be like, oh, my mistake. I put this in there wrong and then it will correct it. It's like, okay. Yeah. So you're going to run my ads and then you're going to accidentally put in the wrong bid. Yeah, exactly. Oh, sorry about that. I entered the wrong bid. Speaker 1: I thought that your budget was $100,000 a day. Speaker 2: Yeah. So just be careful with the AI stuff for sure. And the last prediction, I think this is the last one. No, they've got a couple, but we'll go through these real quick and then hit the last story. Amazon warehousing and distribution network expanding as an alternate to FBA, that's for sure. Increasing competition and the growing need for product research. Speaker 1: That's always been there. Speaker 2: Yeah. Augmented and virtual reality becoming a bigger deal in e-commerce. Speaker 1: Okay. Speaker 2: That I don't know. That's been like I don't know, like two decades in the making at least, three decades maybe, the augmented reality, virtual reality, and it's just failed every time. Speaker 1: So I don't know if I'd buy that one. Amazon does support AR. So you can upload AR images so that people can see them in their homes. And I think that part of the reason that it's failed is virtual reality, I think that's baloney. Like not every household has Google goggles or an Oculus or whatever Apple's is, you know. But the phones, our phones have gotten better and better and now all of our phones have these infrared lasers and they can actually look at the size of a room And then put the correct aspect ratio of a product in there. And so rumor has it that if you have a product that sits on a tabletop or as a chair or whatever, and you add images that support AR, that you get a boost in sales. Speaker 2: I could see that. The virtual showroom is kind of cool. Well, I don't know if that's a virtual showroom, but what you're talking about where it literally takes the product and puts it in your room so you can visually see it, that is kind of cool. I could definitely see that augmented reality stuff. I've been hoping for cars to put augmented reality windshield glass on there so that the map lines, you know, when Google Maps says turn left up here, there's like a literal arrow pointing to the road on your windshield. That would be really cool. Speaker 1: They have, they've got that today. And basically what it is, is there's a screen in your dash and a particularly a square on your windshield that reflects. And they've gotten better because the screens have gotten brighter and it is a pretty good overlay. And I know that Chevy many, many years ago played around with using infrared, not infrared, is it heat? Whatever it is that sees heat, maybe it is infrared. And overlaying that on an even larger reflective place of your windshield so that at night you could see bodies or dogs walking around. They never moved forward with it, but they were testing it. Speaker 2: Those kind of things are really cool and that I could see having a major impact. But yeah, virtual reality, I think that's going to be a niche thing for a long time, if it ever is not. Speaker 1: Yeah, one day someone will come out with some glasses you can put on in front of your mirror or just a mirror that you can buy and you can tap on your phone. I want to see what it'll look like in this dress because I wear dresses all the time, you know. Speaker 2: Yeah. Speaker 1: Awesome. This is what I look like in this dress. I don't want it or I do want it. How does this blouse look on me? How does this hat look on me? But yeah. Speaker 2: Yeah. If they can ever get virtual reality to a point where it's just like putting on sunglasses and it's that simple, then I could see it becoming a bigger deal. But augmented reality has a lot more possibilities than virtual reality outside of gaming. Speaker 1: Yeah, agreed. And they'll use that to move into the VR. Speaker 2: Yeah, yeah, for sure. Speaker 1: Eventually we'll get there. Speaker 2: All right, cool. Well, let's wrap it up there. We're over the top of the hour here. So I appreciate you joining me, Daynon, and everybody out there watching. Appreciate it as well. We'll see you guys next Friday. Have an awesome weekend. Speaker 1: Bye, everybody. See you at Prosper. Speaker 2: Yeah, for sure. 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.