Amazon News: Prime Day Protests, Return Badges & 3PL Power Plays

Amazon News: Prime Day Protests, Return Badges & 3PL Power Plays 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: What's going on, everybody? Welcome to Amazon Seller News Live once again. We've got Noah and Danan with me. How's it going, guys? Good, good. Speaker 1: Doing well. Speaker 2: Appreciate you joining me. I already got the first news story up here, so jumping the gun, but that's okay. We got tariffs like crazy going on. I don't know if you guys look at the news at all, but lately I've had to not look at it because wall to wall, like tariffs and, you know, the world is ending. Trump's pushing grandma off a cliff, all that good stuff. It's pretty crazy. That's the world we live in right now and we're going to be talking about a little bit here because of course the tariffs are affecting everybody in e-commerce, I should say. Let's go ahead and dive into the first news story here. Speaker 3: Let's do it. Speaker 2: Let's see. I've got the wrong one up. There we go. Some Amazon sellers skip Prime Day due to Trump's tariffs. Many Amazon sellers are pulling back from Prime Day this year, citing 145% tariffs on Chinese imports that make discounting products financially unviable. The cost to participate, such as Amazon's fees, plus slimmer profit margins are leading even Long-time sellers to opt out entirely. This shift highlights how rising trade costs and supply chain realities are reshaping Amazon marketplace dynamics, especially in the U.S.-based sellers, or especially for U.S.-based sellers, less able to absorb increases than Chinese competitors. For Amazon sellers, this is a clear signal to reassess pricing, sourcing, and promotional strategies heading into major sales events. And I'll just say real quick, this article is from Tech in Asia. So we gotta remember the source a little bit, but I've seen this in several different places. I believe Fortune had an article about it as well. So it's definitely a concern. I think it's a little bit hyperbolic, but I'm curious what your guys' thoughts are. Unknown Speaker: I'll kick us off. Speaker 1: I'll say it's not surprising, right? I mean, so many sellers right now are in kind of a limbo mode where we don't know what Even next week, let alone 90 days from now, it's going to look like you're 60 days. I see it a lot. I see a lot of people coming to this conclusion. Realistically, I should also say, I'm also not a huge proponent as is to Prime Day. Simply put, just from the aspect of you see three weeks before Prime Day, sales start dropping. Three weeks after sales drop, it ends up a flat line as is. I'm already kind of against Prime Day as it is, but that being said, this just isn't surprising, right? If people aren't going to have the inventory, they don't know how long inventory will take to get to them right now, how expensive it will be, they're changing manufacturing, they're raising prices. Why would people participate, so to speak, in Prime Day? I already tell people if you don't really feel like it, don't do it. But the sales are going to be there one way or another, I think, still, even with the consumers. That being said, big thing. I will say is we saw, for instance, Amazon 1P. All of Q1 was just stockpiling inventory from all their vendors for six months in advance. It's part of the reason we're facing issues right now with Amazon Warehouse's inventory levels, right? And being able to send it low volume items. And so I see stuff like that, and it's like, okay, so Amazon was prepping months ago themselves for Prime Day, knowing the tariffs were going to hit, and so Amazon will probably do great, but the average seller is, as we see, probably not going to. Speaker 3: Yeah. Speaker 2: Yeah. What do you think? Speaker 3: I haven't got a whole lot of room to speak on this because I haven't manufactured in China in seven years. Not all of it, but my main products are made in the US. And then my other products that I'm not currently selling on Amazon, I'm D2C on those, they're made in Pakistan. So this is not affecting me like it is affecting many others. But I mean, tariff talk is all the rage right now. But if I'm being honest, I feel like nobody really knows. Nobody knows. Everyone's freaking out. The sky is falling. Nobody actually knows. And so I don't really want to give a heavy opinion on this because I don't know. And I just think where there's discord and craziness and confusion, there is opportunity. So I would, I mean, I'll tell you what opportunity my wife and I are taking on this. With what we're seeing online we you know when it comes to finding us manufacturers it is really tough to find proper us manufacture so we're building it. Well we haven't fully decided but we started to build it we started aggregating data and we're just gonna build the alibaba of. the U.S. or maybe or something like that. I mean, that's a tall order, but we'll probably call it like Bobby USA or something like that. JohnnyBobby.com. Speaker 2: I like that one. Speaker 3: Johnny Bobby. Speaker 2: Yeah, that sounds perfect. Speaker 3: Yeah, but I think of this more toward the opportunity side. I realize that that's like everyone is having issues when it comes to their product. They knew it was coming, so they had time to prepare, and nobody knows what the net result, the end result of this is going to be, but it's going to be better than what it is right now. And if not, well, if I'm wrong about that, then none of it matters anyways. Yes, exactly. You know, and diversification in your manufacturing is going to be something that you need to take care of. But I just don't, I don't believe that anywhere else in the world has logistics down like China does for manufacturing. Speaker 2: I agree with you, Danan, that we really have no idea where this is going to go right now. I was listening to Victor Davis Hanson, I believe is his name. He's a conservative podcast guy. Um, but, uh, puts out a lot of really good stuff, a very, um, intelligent stuff, not just hyperbolic stuff. And he compared what's happening right now to FDR when he implemented the new deal. And we basically took a hard left turn towards big government controlling a lot more stuff in the economy. And Trump is kind of trying to do the opposite, right, a hard right turn. Decreasing the size of government potentially, and reworking the way taxes work and everything else. And if you really think about everything that he says he wants to do from eliminating the income taxes, bringing manufacturing back to the US, and tons of other things, it's a tall order. And we're right, we're only 100 days in, and he's done more than most presidents I think do in their entire four years. So we really don't know where things are going to go from here. It could fall off a cliff and the economy crashes. Or we could, you know, boom like crazy here. In a year from now, you just don't know where it's going to go. Speaker 3: I know. I don't. Yeah. And honestly, I don't know what I would bet on either. Speaker 1: The big thing is that I think a lot of people are looking far too short term because it's going to be like there's so much pain with it right now, right? And the thing that I think everyone is having a hard time with, especially when it comes to something like tariffs, is normally tariffs get rolled out in like waves over long periods of time that you have time to prep for. Whereas like this has been a This is happening today and from now on forward, right? And like no one had time to prep. And so that's the real chaos behind it, right? And so, but we're not going to really see a lot of like that kind of stuff. Like it's going to be two years, right? In the making for a lot of that to happen. And so it's going to be, you know, if it does stick around, we're not going to know True outcome for a while, right? And that's if all this happens. But I also wonder because there was another news article this week from, you know, Amazon was considering adding a little blurb showing what the cost increase of products is with, you know, tariffs and everything, right? And then Trump called Bezos and suddenly now that's gone. I'm kind of curious with something like this. If Amazon sees like a major decrease for the first year ever when it comes to total sales on Prime Day, right? Because every single year Amazon has seen an increase in sales on Prime Day. And so I'm kind of curious if that even happens. Would Bezos have much pull here? My perfect world vision is that we end up getting reduced Amazon seller tariffs for anybody who goes through AGL. That's kind of what I think Amazon might try and do is cut a deal like that is you go through AGL, you get reduced tariffs, which that's the most logical in my opinion. Speaker 3: And that puts how many other logistics companies out of business overnight? Speaker 1: Exactly. Like it's the best play for Amazon. It would be, you know, the best, I mean, perfect worldview would be, you know, having tariffs just affect differently based on, you know, total revenue of a business, right? And SMB pays a different tariff than, you know, an enterprise company, but, you know, If I'm Amazon, I'm going to play the long game of trying to take more market share in an area that's extremely profitable for me while simultaneously finally throwing a bone to the people on my platform for, you know, once out of the zero bones they ever give. Speaker 3: Well, I mean, let's be honest. This is a bone on a string. They're going to take it away. They'll just use it to entice you. Then they'll. Speaker 1: Yeah, and the price increase that comes with AGL right before it or something, right? Speaker 3: Yeah, exactly. Yeah, they'll get you on the platform. You'll get some kind of bonus. This is what they always do. Ads, when 3P ads first came out, oh, it was so cheap. It was so effective. You just put up keywords, anything you want, you made a million bucks. And then they went, oh, well, now there's tons of people doing ads, so it costs a lot more. And now you have, what, 50 million ads experts out there. I am not one of them. And it's just what they always do. It's a typical play. Make an offer that people can't refuse and then slowly remove what they couldn't refuse. But now they're now they're entrenched. Speaker 2: Yeah. And make guardrails to force them into music. Speaker 3: Especially once you're there. Speaker 2: Yeah, yeah, for sure. Yeah, that's one thing I definitely don't agree with is, you know, the government picking winners and losers like, oh, we're going to exempt Apple from the tariffs because we like the iPhone. Things like that. It's like, no, that's not how this should work. But unfortunately, it is what it is at the moment. Now, one thing that with the tariffs, I forget what I was going to say now. One of the things that would have been ideal, as you were saying Noah, is if we would have prepped for these tariff increases way beforehand, before implementing them. Speaker 3: He told everyone he was going to do it though. He said it was coming. Speaker 2: But I'm talking about building out, you know, alternate supply chains, you know, like he didn't plan for China cutting off the raw materials and stuff that we need to produce a lot of products in this country. Anyways, he didn't have other sources. He just signed a deal with Ukraine, but he's got to get Russia to end the war before we get any of that kind of stuff. So these kind of things should have happened before the tariffs, but I can't necessarily blame Trump because we live in a such a A hyperbolic world and polarizing Democrats and Republicans, right? Even though a lot of stuff that Trump is doing right now, like closing the border, cutting waste and fraud in the government, these are all things that Democrats have supported in the past. We're in a place right now that if a Republican does it and you're a Democrat, you can't support it. And if you're a Democrat doing it and you're a Republican, you can't support what the Democrat's doing. And so I think Trump knows that he's got It took him two years to get done what he wants to get done because if he loses the house in 2026, then a lot of what he wants to do is done. All the investigations start, the impeachments start and everything else and starts overshadowing what he wants to do. So unfortunately, he just had to go as fast as possible and that's why he is moving so quickly. Speaker 1: I agree with that. Speaker 2: As far as Prime Day though, I think there will be some sellers that quote unquote skip Prime Day, skip the deal. You might not have as big of deals from a lot of companies. But you, it also might, you just might see alternate products that are having deals. You know, all the made in the USA products that already exist, everything made in India and Mexico and other Vietnam and countries that aren't here with these high tariffs, you're going to see those discounts. You're just not going to see the big discounts potentially from products that are coming from China. Speaker 3: I'd like to make a prediction here. Speaker 2: Go for it. Speaker 3: It's going to be a whole bunch of Amazon haul deals. Speaker 1: See, I'm actually kind of interested to see this because Dayminimasu is done starting today, right? Or yesterday, right? So I'm kind of interested to see the first Prime Day in the last few years. We're Chinese sellers don't have, you know, full authority. Granted, they're probably still doing the whole black hat thing of, you know, saying, oh, yeah, I manufactured this product for, you know, a penny on the dollar compared to my next close competitor. And so they're probably still not paying very much in tariffs, but they are still having to, you know, try and get around day minimals and everything. So I'm kind of curious to see if that has any impact here at all. But my guess is probably not Tom. Speaker 3: I mean, I think those, those manufacturers have stockpiled inventory already in America. Um, I, I think that what, what we'll see, I think you're right that us made India, Pakistan, Japan, Germany, whatever, that those will have deals up there. But I think that by and large, we're going to see a significant reduction of people like us. That are doing prime deals, you know, the mom and pops that rely upon Amazon for to to pay for our bread and bacon, you know, I love bacon. Speaker 2: Anyhow, we did that story a few weeks back that what was it something like 80% of prime deals or something like that are from Chinese based China based sellers. Speaker 3: I think I I remember it being 60, but definitely more. I think so, yeah. Speaker 2: It might have been 60. Yeah, it was the majority for sure come from China. Speaker 3: Yeah. I believe that also the majority of the 3P sellers, I think it was 60% of the 3P sellers are Chinese-based, China-based. Speaker 2: And they do them a lot more frequently too, because they talked about the always on discounts, right? They'll hop between the discounts and just keep it going. So those kind of things you can potentially see going away some. I think they'll still do them. Like you said, they're five ways around the system. Some of the bigger players are gonna figure out How to get around the system by moving their products over to Vietnam or Bangladesh and Mexico. I've read articles of Chinese setting up factories in Mexico. They've been doing it in Vietnam for a long time. You're going to get a lot of that kind of stuff moving product around. It's going to be different. That's for sure. Whether sales will be up or down. That'll be an interesting thing to see how much it affects because Prices have started coming up on some things. We've seen price increases, but even if it's not major, just the news cycle that's going on out there to drive fear in people, which is what they're trying to do, that can have an effect. Speaker 1: Consumers are afraid to spend. Speaker 2: And so that gets free sales even if it's not justified. Speaker 3: Yeah. Propaganda was propaganda as a use of, was used in war. Effectively, mind you, I think it was like World War One. They started doing that basically just like playing messages like, you know, those motivational posters. These were demotivational messages, you know, and so there is an alternate war of propaganda here. And the problem is, is that a lot of these media places are in the pocket. Of certain corporations or countries or whatever. Speaker 2: Pretty much. Speaker 3: Yes, exactly. George Soros and some others. Speaker 2: You could probably do the same thing with tariffs, but I don't know if you guys recall seeing the video going around about the people talking about COVID and masking and getting the shot, that you're not killing people basically, and they kept adding in more and more We're newscasters that were talking on different stations and they were all saying the exact same thing. And it's the same thing. It's just that they're doing with tariffs. It's just kind of funny when you, once you see the system, you just laugh at it, but there's still a lot of people that are, you know, stuck inside there and actually believe what they say on Fox News or MSNBC. Speaker 3: Yeah. Well, perhaps we shouldn't go into too deep of a rabbit hole here. Welcome to Amazon. Speaker 2: I'm not just talking about Republicans. I'm talking about Democrats, independents. Speaker 3: No, I know. I know. Speaker 2: Don't trust what you see on TV is all I'm saying. That's why I said Fox News and MSNBC because they both do it. Speaker 3: Yeah, yeah, that's look, don't listen is the motto to live by. Speaker 2: Yeah. Speaker 3: And thanks for listening to Amazon Seller Politics. Absolutely. Speaker 1: I bet that would actually be a podcast that would do pretty well. Speaker 3: Amazon Seller Politics. Yeah, that's funny. ASP. Speaker 2: That would be fun. I don't mind bringing in a little politics. I enjoy it. Speaker 3: No, I know. Speaker 2: For the most part, as long as I'm talking with someone, people that, you know, aren't overly into the hyperbole. Speaker 3: Sensitive? Speaker 2: Yeah. Overly sensitive. Yeah, freaking out about everything. Alright, let's go ahead and jump on into the next story here. Speaker 3: Cool. Speaker 2: So new Amazon return badges could boost or break your sales. Amazon expert Vanessa Hung reports that new badges like Frequently Returned and Customers Usually Keep This Item are now appearing on product listings and influencing buyer decisions. The red badge warns of high return rates and could hurt conversions, while the green badge builds trust and may boost sales. Vanessa emphasizes that sellers must proactively improve product accuracy, quality, and review management to avoid penalties and benefits from the changes. As Amazon rolls this out quietly, those who adapt quickly will likely see an edge in visibility and customer trust. Speaker 3: All right. Yeah, I've got a few things to say about this. So you guys know that I'm in the business of helping Amazon sellers remove negative reviews. This is as much of a killer. I see the frequently returned badges as much of a killer of conversions as is going from a 4.3 to a 4.2 star. I think if you see that badge on there, you're going to see a 25 to 50% reduction in conversions. Now, with that being said, if it's legit, it's legit. But we all know that in certain areas, in many areas of Amazon, competition Creates scenarios like this and these accounts they could buy 10 of these a week and return them. No cost to them still do a verified one star a verified purchase one star. And cause that badge to go up and kill a listing this is what i see with the problem that the problem with this and it's not that i disagree with the logic right. It's that i can see that this will be so easily gained by the bad actors that. It's gonna like we'll be seeing it. We'll be seeing it, you know, and look, if you deserve that, that badge. Good. I want to know. Because I bought some things on Amazon where it's not at all what I was expecting to get, you know, and I'm an educated buyer. So, you know, like there's a good side and a bad side to this, but because of the world that I work in and constantly having to fight with Amazon about fraudulent reviews and TOS noncompliant reviews, this is going to be the next Big problem for my customers. And I'm, I'm afraid for that reason. 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. Speaker 1: I'm on the same page, to be honest. So I mean, this isn't new, so to speak, right? So this badge has been around for a couple of months. They recently changed it, though, to that red banner. And that's what I kind of hate, is the aspect of like, now it's just a big, bold red banner. However, I have seen that there is a difference between the frequently returned like banner down there, the second one, and the one up at the top. So it seems from what I have seen that the one up at the top only happens when you cross over a certain threshold, whereas the one at the bottom there is only if you're above the average return rate threshold for the category. So there are differences here, right, in them. But to your point there, Dan, The red banner almost seems like it might be easier to game if you're planning on returning everything under the same exact reason, right? Like if there is a specific reason that they always go under. Granted, the thing I will say there as well, we're never going to be able to fully stop that. Similar to the fraudulent reviews or anything like that, there's not anything any seller can do to protect themselves here, right? There's not anything that you can realistically do. Speaker 3: A little bit. Price. Speaker 1: Oh, that's fair. Speaker 3: Start selling $900 items on Amazon. Speaker 1: Yeah. Speaker 3: Good luck. Speaker 1: But that is the type of thing, right? Where it's, I think it's rather difficult to quantify this, right? I think it's great because also there is the aspect of Amazon very often has been the company that in my eyes, they don't typically reward people for doing the right thing. They pretty much only punish people for doing the wrong thing, right? So it's always that like guilty before proven innocent thing. I do like that they have the badge where it's like customers usually keep this item because that's at least some form of kind of reward system that Amazon's actually giving people for once, right? To actually maybe help conversion, right? Speaker 2: I agree with that, Noah, but look at the placement. Speaker 1: I know. It would be so much nicer if it's right up at the top there with that red one where it's just like, you know, 98% of people keep this item. Speaker 3: Yeah. Look, you know what this reminds me of is Subaru. So Subaru owners are known to keep their cars for freaking ever, right? And so Subaru plays on that, like only 2% or 5% or whatever it is of cars get returned to us, right? And so the angle at which Amazon is coming on this, it isn't customers love this product. It's, yeah, customers usually keep this item. It's still a negative in my opinion. Yeah, the color is green. It gets a green checkmark. It's like, oh, cool. Customers usually keep this item. I mean, it's all right. Speaker 1: Let me ask you a question. Would it be better or would it be worse if they changed these badges to just put a percentage? Speaker 2: Yes, I was just thinking. Speaker 3: Totally, yeah. Speaker 1: Because think of it this way, you know, the red one, the red one I'm thinking is like 20%, you know, or 10%, whatever, because it's above the average based on average for category, right? So, if it's like, you know, hey, 13% of people return this item for this reason, right? Speaker 3: Yeah. Speaker 1: I honestly, but simultaneously, 98% of people keep this item usually, right? Yeah. Honestly, 13% isn't going to deter me as much as a giant red badge that people say frequently. Speaker 3: Yeah, yeah, yeah. And let's talk about this. Frequently returned because of this reason, but not usually kept because they love these features. How many people, I think, if I remember correctly, of the brands, the big brands that I have as clients, their review rate on orders is something like 1% or 2%. Does that sound right, Noah? Speaker 1: Average is about 1% to 3%, yeah. Speaker 3: 1% to 3%, okay, cool, yeah. Speaker 2: You might be able to get 1% these days. Speaker 3: Yeah, so one positive review out of every 100 orders, but it's a known statistic in marketing that an angry person will tell 10 people and a happy person will tell one. And the weight rating system of the negative to positive reviews, in my opinion, are way off. Because the more reviews you get, especially starting out, the heavier the negative reviews weigh down your rating. And it takes so much more to overcome that. Right. And so It's just like everything I see on this screams to me like Amazon still doesn't know how to help their sellers. Speaker 1: I don't think they're trying to here. I don't think they're even trying to help the cost. I know they're the most customer centric, right? I don't think this helps customers in the slightest realistically, because again, you know, the average rate to get that frequently returned for most categories is about 10%, 10 to 15%. So if you are 11% return rate, right? 11 out of 100 orders. You know, basically 101 orders out of 1000 get returned. And who knows if it's you're selling something that's like a very niche item, right? That like, you have to have a specific type of cable or you have to have something. There's all sorts of reasons as to why people return things, right? Not every time somebody returns something, is it necessarily a negative customer experience at the end of the day. The amount of times I've returned something where I'm just like, oh, you know, I bought the wrong phone case size. I had to return that phone case and that wasn't the fault of the seller or the product. It's like, I just bought the wrong one because I wasn't paying attention, right? And so that type of thing. I will actually real quick, I will call out, I got to bounce guys. So Todd, thanks so much for having me. I hope you guys have a great rest of the show. Speaker 3: I'll see you on the next one. I will say one more thing about that is that Amazon's return system is, why are you returning this thing? Didn't work, something, blah, blah, blah. There's not a whole lot of options, right? And so, My wife is the one that does all of our Amazon purchasing and returning and stuff like that. So I couldn't speak to this 100% for today. But it used to be that I didn't like it. Cool, you can't return it. But there was a problem with it. Oh, yeah, you can definitely return it. So what did people choose? There was a problem with it. Speaker 2: Now they've got so many different options for returning. Drop it off at Whole Foods, drop it off at a UPS store, have UPS pick it up, print the labels and take it to a UPS store. I think Kohl's is another option to drop it off at. Speaker 3: I think Kohl's did away with that and now it's Whole Foods. Speaker 2: But some are free sometimes and others are not free sometimes and you don't know until you get to the end what it's going to be. So you get to the end and it's be like, well, I don't want to have to go to Whole Foods to drop it off for free. I got to pay for all the rest. So you go back and you pick a different option to return it to try to find the, you know, how can I just print the label for free so I can drop it off at a UPS box or whatever? Speaker 3: Yeah. Speaker 2: You know, so I've had to do that sometimes in the past, you know, I don't, It's a moral gray area, I guess, but I prefer to print the labels myself because I've got all the label printing equipment and stuff to print them off and just give them to the EPS guy or whatever. So sometimes you got to play with it. You mentioned the percentage. It would be nice to see a percentage for us. I don't know how well that would work for the average person. Because most people don't like math, so they don't want to have to think about percentages. I think, I remember reading that like discounts, people tend to like dollar discounts versus percentage discounts more because then they don't have to do the math to try to figure out how much of the discount actually is. Speaker 3: Yeah, I think that there is a, so if you say, you know, let's say you're buying something for $2,000, right? Like, hey, you can have 10% off. Uh, okay. Or you say you get $200 off of this. Which one sounds better? But I believe that in marketing, there is a percentage number where it's better to use a percentage than a dollar amount. It's actually more specifically, it is a retail price range amount. And a dollar to percentage off, because if you're selling a $6 item, it's better to have 20% off than it is to have 40 cents off or whatever it is, you know, a $1.20. Yeah. Speaker 2: Yeah. There's a line there where people perceive the percentage as being greater, even if it's not. Yeah. Yeah. Speaker 3: Which is why some places mark the price up and then put the discounted price as the regular price, you know? Speaker 2: Yeah, that happens a lot on Amazon for sure. Speaker 3: Mm hmm. Speaker 2: It's, you know, I, you're definitely right, Damon, on the, this being taken advantage of, I could see this being farmed out to different places in China or wherever these, these, where they've got these review farms, right? This is going to totally become a thing where they're buying and returning products, just trying to get That frequently returned badge onto a competitor. So, and if any, if the history is a judge, Amazon almost never prepares for these kinds of things ahead of time, even though they know they're coming, they just, they react to it well after the fact that it becomes an issue. Speaker 3: Yeah. Yeah, exactly. Yeah. And like a long time after it's become of an issue and the sellers are up in arms about it and All that stuff. Yeah. Speaker 2: Yeah. Now I see what they're trying to do. If I look on the positive side of what Amazon is trying to do, returns harm their bottom line, right? So the more they can decrease returns, the more they increase their profit and our profit as well. So if you've got a crappy product out there that you know is getting returned all the time, you probably should fix it, whatever the issue is, and start selling a new and improved version to stop getting those returns. So the good side of it is going to be that people will be pushed to improve their product to decrease the returns. The bad side, if you do get hit with this, it's going to tank your sales big time. You're going to want to watch your return rate even closer if you haven't been in the past and improve your product, which you should be doing anyways. If you have a private label product that you're making, you should be incrementally improving that probably every few quarters or a couple quarters, if not every year or more. When you're selling, if you're seeing these issues pop up and it's a repeat thing for a reason, people are returning it. We used to sell these zippers, these replacement zippers, and they got returned all the time. Very high return rate. I bet you if I went and looked at the product, it has this badge, assuming that it's rolled out to everybody. Speaker 3: What's the product? Speaker 2: I'd rather not share. Speaker 3: Fair enough. Speaker 2: The problem is that a ton of those returns were from people not using it properly because if you didn't fasten it onto the jacket or whatever properly, then it's going to come off in the wash or it's not going to zip properly. Most of the returns were for those kind of issues. And it's such a cheap product to make, it was still worth selling it even with the high 10, 15, 20% return rate that some of the different sizes were getting. It's gonna hurt a product like that, but it's not necessarily their fault as to why they're being returned. Yeah, watch out for it. It's coming. I don't know if it's fully rolled out or not, or if it's just they're starting to roll it out quietly. But as a consumer, I will like to see this, definitely, if something is being frequently returned. Now, often that's going to pop up in the reviews as well. So frequently returned is probably going to correlate to a lower star rating, but not necessarily always. Speaker 3: Yeah, yeah, there's probably so because Amazon waits the more recent orders and reviews more heavily as a representation, a more accurate representation of a product. The way I see this working is some competitor to your zippers says, Hey, I want you to blast this guy with 10 negative reviews over the, over the course of five days, you know, and then they buy the product and they all return it and they all leave roughly the same review. Um, you know, there's, there's a client that I have that, uh, that's exactly what just happened to them. And actually, I'm going to just take a look at their recent product because I think, let's see if they got that badge. Unknown Speaker: Hmm. Speaker 3: No badge there, but. They just got blasted with like five reviews and every review was in with three days and they all are almost exactly the same review. Speaker 2: Oh, wow. Yep. Yeah, that's going to happen a lot. Christian says, I have found the tags are pretty accurate and I got returns often for these listings. So I'm guessing, are you talking about your own products? For products that you're purchasing, it kind of sounds like he's talking about his own products, perhaps lining up. Speaker 3: Yeah, I think so. Speaker 2: Yeah. It's going to be interesting to watch and see how the manipulation happens, because this is going to be a prime target, because that badge right at the top there, bright red, is like you said, it's going to tank your sales by 50% or more. Speaker 3: It's literally next to the add to cart button. Speaker 2: Yeah, for sure. So yeah, watch your returns out there. If you haven't checked them in a while on your products, take a look. See if you got these badges of the ones that you know that are frequently returned and fix your products if they're being returned for a reason that can be fixed. Speaker 3: Yep. Speaker 2: All right. So let's go ahead and jump on to the next story here. We've got a double story here, one about Etsy, one about eBay. So Etsy marketplace sales fall 8.9% in Q1 amid seller fees increase. And eBay sales are flat as CFO departs, ad revenue rises. So Etsy reported an 8.9% drop in marketplace sales for Q1, with habitual buyers also down 11% year over year. Despite this, overall revenue grew slightly, 0.8%. Probably due to inflation, I imagine. Well, it says due to increased ad spending by sellers and a hike in seller setup fees from $15 to $29. And then eBay reported just 1% growth in both GMV and revenue for Q1, while also announcing the replacement of its chief financial officer and chief product officer. Despite sluggish sales, first party ad revenue on the platform rose 13% in year over year, generating 418 million. So the ads is the saving grace kind of for both of the companies. They're charging more for ads and it's making up for their decrease in sales. But I don't think that's a winning strategy. What do you think, Danan? Speaker 3: Yeah. I mean, Let's take a little page out of Amazon's book. What are the sellers going to do? They're going to gripe about it and pay. It's like those of us that have to get gas in our cars, right? Summer comes along, price goes up to $4.50 or $5 or whatever it goes up to. And we go, oh man, this sucks. Now I'm having to pay $80 to fill my tank. I'm paying the $80. Here I go. And I think the same thing is going to happen with eBay. There are people, there are massive businesses that happen on eBay. Here's the weird thing. They've raised the pricing of PPC, but it's supposed to be a free market where you're bidding against your competition. So are they artificially increasing the bids then? Speaker 2: Yeah. That's maybe they, maybe they increased the base or the starting rate or something. I don't know. Speaker 3: Yeah. Whatever it is. I mean, anytime fees get raised for sellers, sellers get upset and then pay them. Speaker 2: Yeah. Yeah, I mean, if you're if you're going to sell there, you don't really have a choice other than to use the ads and the ad prices are going to rise naturally over time, one due to inflation, but also due to increased competition, which eBay's ads are relatively new compared to Amazon's. So it makes sense that their ad revenue is increasing, but eventually if you continue to see flat growth or decreased growth like Etsy, that ad revenue is going to start dropping off. Speaker 3: Right. Yeah, and so that's where I think Amazon is headed is they're going, well, how far can we push? How much can we squeeze our sellers? You know, before the screaming stops and the money starts dropping off and they start leaking dollars, they stop leaking dollars for us. Speaker 2: Yeah, ads are unfortunately are a part of the game. You know, And it's increasingly more and more the placement on all of these platforms. I have searched and paid attention on Etsy and eBay recently, how many ads are on every page. But I know on Amazon, it's like 40% of the page is all ads. So they just take over the search results and push the authentic results off the page, right? Because if 40% of the page is ads, then that means 40% of the people that should have showed up on the first page are now pushed to the second page. Speaker 3: Yeah, it then becomes an actual non-organic search engine results, right? It's augmented. It's, you know, Amazon, yeah, they do a good job of displaying the right types of ads and stuff like that, but it's not necessarily the product that actually deserves to be there, right? Now, I come from an era where prior to 3P ads even existing, and so the most organic results would always be the winner because that's exactly what the people were looking for, right? And when ads first came out, I was like, I'm not going to pay more just to make the sales that I'm making. Forget that, right? And then when I went to launch my first true private label, My sales velocity was, it was okay, but I wasn't like, wait a minute, the search volume on this is X. I should be making at least four times. And so what did I do? I went, all right, well, let me turn on ads. Boom, sales double. And I'm not talking about PPC sales. I'm talking about organic sales. And so when that happened, I was working at I manage my stats at this time. I started looking at a few accounts ago and hang on a second. What does organic conversions do compared to PPC? And so I pulled some data. This is before we actually had this graph, but it's there now partially because I brought it to the attention like, hey, we need to be able to overlay these graphs. But I got the data and then I got help creating a sheet that showed what was the rise and fall of organic sales and what was the rise and fall of PPC sales. And you know what I found is that organic sales We're going to trail PPC sales by about somewhere between two and six weeks. It could be even wider than that, but if you take those two graphs on the timeline and you move them toward each other, you will find they approximately travel the same path, which means that if, which basically all it really means is Amazon says, Hey, if you're not paying us for ads, we're not showing your shit. That's what it boils down to. You may deserve that ranking very heavily. And that's when I realized, oh my God, because people were saying, yeah, it's pay to play now. I'm like, no, no, you just need the best listing. Nope, it's pay to play. I statistically proved it to myself. Speaker 2: Yeah Yeah, I mean you're still like you said in the beginning you're still gonna get sales even if you have a really good listing and a good product you get a little traction you're gonna get sales without the ads I have a ton of products that I sell and For other companies that, you know, they don't have me run any ads or anything like that and I get sales. Speaker 3: Yeah, I don't run ads. Speaker 2: Their brand name and, you know, probably maybe off of ads that they're doing outside of Amazon, but we don't run ads on Amazon and they still get plenty of sales. So you're still going to get them, but if you want to be at the top of Amazon, then yeah, you're, you have to pay to play to, to push those sales up and keep your ranking. Unknown Speaker: Yep. Speaker 3: Yep. True, but unfortunate. Speaker 2: The name of the game. But curious, what are your thoughts based on this information on the future of Etsy and eBay? Speaker 3: Look, this is the third time we've covered Etsy on this live stream, and they're reaping what they've sown. That's what I think. This is just a gut feeling, but I think eBay is doing okay. The only problem is that when you go public and you have to always show growth, the only way to show that growth after a little while is to squeeze the people that generate that growth. Speaker 2: Yeah, I agree. eBay is not going anywhere. It's going to be 50 years from now, eBay will probably still be there and a decent percentage. I don't think it's going to grow unless they do something crazy that I can't imagine right now. It's going to be one of those sites that's just There forever, people are going to be buying and selling on there. Etsy, I don't know. Etsy could collapse. Speaker 3: Could. Speaker 2: Or it could start increasing again if they're able to focus back on their core and focus in on the farmers markets that you go to locally on the internet. Speaker 3: And I just don't see that happening. And so I think they're going to go more, I believe that they'll head more towards collapse because as soon as they started introducing just like manufacturers and stuff like that, and it was no longer the farmer's market, the handmade market. I never went there again. Speaker 2: Yeah. Because I just go to Amazon at that point. Speaker 3: Exactly. Exactly. Speaker 1: Faster. Speaker 3: Yeah. They lost my business years ago. You know because it's not the site that I went to eBay is still the site that I've always gone to. For what I'm looking for and now admittedly in the early days of eBay, I was like bid, bid, bid, bid, bid, bid, bid, bid, bid, bid. Yes, I won, you know. Speaker 2: That was so much fun. There's so many people that will never know the joy of winning an eBay auction. Speaker 3: Yes. Yeah, or and then they came out with automatic bids and then you're like, I just want to think $400, you know. And so that got gamed a little bit. But, you know, I'll give you a perfect example. What eBay will always be for me is it is the the global flea market. Speaker 2: Yeah. Speaker 3: And the global garage sale. Global garage sales, probably a better example. Speaker 2: Yeah. A few steps below a farmer's market. Farmer's market is usually a little higher quality stuff, but at a flea market, you never know what you're going to find. Speaker 3: Exactly. Speaker 2: That's a good example. Speaker 3: I busted the mirror on my Rover, and it's a heated mirror, and so it's got electrical connections. Now, could I go to Amazon and go buy a mirror from China? Yeah, I could. But I wanted a Land Rover mirror because I know the elements are going to work properly and it was built properly and stuff like that. And so rather than going or I could buy a new one for $300 or something like that. So I found a mirror on eBay that it would cost me 60 bucks. And so it'll always be that place for me. It's like, hey, I need a new, I don't know. I want a new controller for my Xbox. Well, let me see what's on eBay. Hey, this is super lightly used. It's what I want. It's $50 less. Cool. I'll buy it here. Speaker 2: Yeah, eBay is frequently less expensive than Amazon. I think because their fees are lower most likely, but I just bought a pallet jack actually on eBay this morning. A pallet jack that has a built-in scale for paying pallets. It was $1,300 on eBay. On Amazon, I was looking and it was $1,900 over there for the same thing. No, new. Yes. Same delivery timeframe and everything because obviously this is in Prime. Nobody's sending a pallet jack in to Prime. They're both delivering between, I think it was the 6th and the 12th or something like that was the estimated delivery date. It's a big difference for a lot of things like that I find on eBay versus Amazon. If it's a big purchase, I will usually check around the different platforms. Speaker 3: Smart, yep. I wish there was a platform that aggregated all the data from the other platforms, like a kayak for e-com. Speaker 2: Yeah, well, that ChatGPT could be that potentially, right? Speaker 3: That's true. Speaker 2: We were talking about that last week, how they're working with Shopify. They could very easily connect into Amazon and eBay and Etsy and all those, but the problem with that is though a lot of these sites block those kind of things. Speaker 3: Yes. Yes, they do. Speaker 2: So they, Etsy was pulling their data or ChatGPT was pulling their data. They'll cut them off and then they'll stop working. Speaker 3: So this is something that they made some strides in toward recently is blocking scrapers because, and I know this because in order for us to determine if Amazon removes a review that we filed on, we have to go look. They don't say like, oh my gosh, you're totally right. We're so sorry. We let that one go through. So we've removed it for you. They don't do that. So we have to go and check every single day. Did it get removed? Did it get removed? Well, guess what they're blocking? That. And not only are they blocking it, because there's ways to get around that, but they're also If you log into a VPN and you try to go to Amazon, they will give you an artificial 404 page. And if you reload it, oh, it worked this time. That's weird. Why did it go to a 404 saying site not found? It's amazon.com. So even if you're legitimately using your computer, because I've got a VPN that I use on my computer that I got when I was traveling to China. Amazon started blocking that VPN. Well, guess what? If you have a VPN service like NordVPN, Proton or whatever, well, guess who knows all of those IP addresses? The big guys. And so they just go, yeah, these guys are using a VPN. They're probably doing something nefarious. And it could just be somebody like me being like, don't track me. Speaker 2: Yeah, I had that issue a lot. You can't log into a bank account with a VPN turned on a lot of times. They'll block you. You have to shut it off or whatever to get to the login page even a lot of times. Speaker 3: Yeah. Speaker 2: Have you tried creating a ChatGPT, uh, what are they called agent or, or whatever to, and set it up so that you can say, here's the review, go to the page and look to see if that review still exists there. Speaker 3: Yeah. Oh, uh, for that? No, I haven't. Um, I've tried it. I've tried it and it wasn't working properly. I don't know why because I give it the domain of the review and I'd say, hey, what's here? Sometimes I say, oh, I can't access the internet, but I've got web search turned on. Sometimes it'll go, yeah, it's this, that, and the other. I'm like, no, that's wrong. Go look again. And it's like, oh, I'm so sorry. You're right. I can't access that page. Speaker 2: Are you using just the ChatGPT chat? Speaker 3: No, no. I built a GPT for that. Speaker 2: You built an operator? Speaker 3: Yeah. Speaker 2: Okay. Speaker 3: Yeah. Speaker 2: Well, maybe Amazon could potentially be blocking that in some way as well. I wouldn't be surprised. Speaker 3: Yeah. Speaker 2: They're probably detecting that. All right, I think we can wrap it up there, Danan. You're over the top of the hour, so I appreciate you coming on the show and I appreciate everybody out there watching as well. Always have fun with you guys every Friday at 1 p.m. Eastern, so we'll see you next week. Speaker 3: See you next week. Oh, wait, you won't see me next week, but you'll see me the week after. Speaker 2: All right, well, see me next week along with probably a couple other people. Speaker 3: Yep. Bye, everyone. Speaker 2: Have a great weekend, everybody. 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.