Amazon Sneaks In Third-Party Seller Discounts


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Amazon recently began reducing prices on merchandise sold by third-party sellers, ratcheting up its market share competition with discount stores, including Walmart and Dollar General.

The company has started to display a new tag, “Discount Provided by Amazon,” The Wall Street Journal reported on Sunday. Price cuts so far have been a little less than 10 percent on goods sold by independent retailers.

Amazon has been making the cuts unilaterally and absorbing the losses itself, in order to provide customers with lower prices on an increasingly important mix of products.

“‘Discount Provided by Amazon’ is another way for Amazon to provide the low prices customers expect,” the company said in a statement provided to the E-Commerce Times by spokesperson Cecilia Fan. “When Amazon provides a discount, customers get the products they want at a price they’ll love, and small businesses receive increased sales at their listed asking price.”

Sellers can opt out of the program at any time, she said.

Best Prices Anywhere

Amazon’s willingness to absorb the discount costs and pass along the full value to third-party sellers is a tactic designed to further a wider objective, which is to compete effectively in all major price segments, noted Cindy Zhou, principal analyst at Constellation Research.

“This is about offering a wider assortment through the third-party sellers, and ensuring they maintain price competitiveness as we enter the holiday season,” she told the E-Commerce Times. “This might spur new sellers to list on Amazon and further increase their assortment and reach.”

Marketplace sales have become an increasingly important part of Amazon’s product…

Amazon May Disrupt Prescription Drug Space Next


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The rumor that Amazon has set its sights on disrupting the pharmaceutical industry has gained greater currency recently, just months after the company set the grocery business on fire with its acquisition of Whole Foods, and in the midst of its widely publicized search for a second U.S. headquarters location.

Amazon reportedly has taken major steps toward becoming a drug distributor and seller — actions that have caused concern among potential competitors and may have figured heavily in CVS’ negotiations to buy health insurance firm Aetna for US$66 billion.

Amazon has obtained licenses to sell drugs as a wholesaler in 12 states, including Nevada, Arizona, Alabama, North Dakota and Louisiana, according to a report in the St. Louis Post-Dispatch.

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The E-Commerce Times was able to obtain documents showing that Amazon has licenses to sell wholesale drugs in New Jersey and Connecticut, two other states on the paper’s list.

If Amazon wanted to get into the business of shipping pharmaceuticals directly to consumers, it also would have to obtain pharmacy licenses, the report notes.

The newly obtained licenses are related to the company’s growing healthcare supply business, which is part of a growing B2B segment at Amazon, said spokesperson Lori Torgerson.

As part of that business, Amazon sells professional medical supplies to doctors, dentists and other medical professionals.

“Wholesale licenses are required for Amazon Business to sell professional-use only products to healthcare companies,” Torgerson told the E-Commerce Times.

B2B Boom

Amazon this summer announced that its Amazon Business segment,…

Amazon to Let Delivery Drivers Open Your Front Door


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Amazon on Wednesday announced a new service that will allow Prime members to receive in-home delivery of packages with the help of high-tech smart locks that allow drivers to open their front doors.

Amazon Key will launch officially on Nov. 8 in 37 U.S. cities and surrounding communities, with additional locations to be added over time. The service will be available at no extra cost to Prime members, and it will work with standard, two-day, overnight and same-day deliveries.

“Amazon Key gives customers peace of mind knowing their orders have been safely delivered to their homes and are waiting for them when they walk through their doors,” said Peter Larsen, vice president of delivery technology at Amazon.

To use the service, Prime members must order an Amazon Key in-home kit, which includes the Amazon Cloud Cam and one of several compatible smart locks offered by Kwickset or Yale. The Amazon Key In-Home Kit starts at US$249.99. The locks can be installed professionally at no extra cost or self-installed by customers, according to Amazon.

Beyond Deliveries

When a driver requests access to the customer’s home, the Cloud Cam confirms the driver is at the right address through an encrypted authentication process. After the request is authenticated, the Cloud Cam starts recording the delivery and the door is unlocked.

Customers can track the delivery using the Amazon Key app on their mobile phones. They get real-time notifications and can watch deliveries live or view recordings later. The entire delivery process is backed up by the Amazon Happiness Guarantee, the company said.

The agreement is a big step for Yale. Its parent firm, Assa Abloy, also on Wednesday announced that it is testing an in-home delivery service with 100 customers in Sweden, in collaboration with delivery firm PostNord and e-commerce retailers Jollyroom, Apotea and Komplett. Yale Doorman digital locks are being used in the tests.

“It’s significant in that we’re working with Amazon, obviously a powerhouse in online retailing, and working with them on one of the most innovative programs in e-commerce and home delivery,” the firm said in a statement provided to the E-Commerce Times by spokesperson Terry Shea.

The Amazon Key program will provide features beyond home delivery of packages, the company said. Customers will be able to grant keyless entry for family and friends, and they’ll be able to set frequency and length of time for access to the home.

Amazon plans to roll out a new program that will allow thousands of companies to access homes using the…

CMO Today: Scientology Targets A&E Advertisers; Amazon’s Athletic Wear Push; Why Columbus Is a Retail Test Bed

Actress Leah Remini held the award for outstanding informational series or special for “Leah Remini: Scientology and the Aftermath” at the Creative Arts Emmy Awards on Sept. 9.
Actress Leah Remini held the award for outstanding informational series or special for “Leah Remini: Scientology and the Aftermath” at the Creative Arts Emmy Awards on Sept. 9.

The Church of Scientology has long been famous for going after its critics. Now it is adopting the playbook of social media activists like Sleeping Giants and targeting advertisers. As CMO Today’s Alexandra Bruell reports, Scientologists are writing to advertisers—including Anheuser-Busch, Chrysler and Geico—demanding they boycott the A&E show “Leah Remini: Scientology and the Aftermath.” The group behind the effort, Scientologists Taking Action Against Discrimination (STAND), allege the series is inciting threats and acts of violence against members of the church. Is the campaign working? Some advertisers have pulled their ads from the show, but it isn’t clear whether the letters prompted their decision or simply the wider controversy around the content within the series. A&E says it stands behind the show, which won an Emmy earlier this year.

Amazon has apparel brands against a wall. Some brands have been resistant to listing their full inventory on Amazon, wanting to hold back some products to sell within their own carefully controlled environments, where they can dictate price and the merchandising environment. But Amazon is increasingly sending a message to any reluctant brands: If you leave gaps in our inventory, we’ll fill them. As Bloomberg reports, Amazon is working with some of the biggest athletic-apparel suppliers as it barges its way into private-label sportswear. News of Amazon’s activewear push sent shares of Lululemon, Under Armour and Nike down on Friday (although Nike’s shares recovered before the close). Established activewear brands are already having a tough time amid stiffer competition and discounting. Will Amazon’s new athletic line—which, if its other forays into clothing are anything to go by, will carry a trendy name that many people won’t realize is backed by Amazon—prove one disruption too far?

If you were asked to think about where you might stumble across cool new retail concepts, you might conjure up images of slick cafe-clothing setups in Williamsburg or Silicon Valley tech stores that double up…

Proactively Protecting Your Brand on Amazon

One morning, you get a call from one of your long-time retailers, complaining that he’s found your products being sold on Amazon at prices 20% lower than what you seek to have across all of your sales channels. Your retailer tells you he is very frustrated that he’s being asked repeatedly by his walk-in customers to match these lower prices – something your retailer can’t afford to do.

If you’re like so many brands today, not only do you not recognize the name of this Amazon reseller, you have no idea how to go about figuring out a solution to stop this sort of situation from continuing. How do you make sure you know all of the resellers of your product on Amazon, and what do you need to do to tighten up your distribution efforts so you don’t have big leaks like this?

As I explain in my book, The Amazon Marketplace Dilemma, it’s important to understand how Amazon looks at situations involving gray market sellers or resellers not authorized by the brand to sell on Amazon. The Amazon marketplace is an open marketplace, which means that anyone who can get their hands on practically any brand of product can get a third-party seller account to sell on Amazon. With only a few exceptions, Amazon will welcome anyone to sell, as long as the products aren’t counterfeit and are properly described to Amazon customers by the product listings.

Amazon also makes very clear to brands that that Amazon is not in the business of managing or enforcing a brand’s distribution policies – that is completely up to the brand…

Amazon Deploys Army of Echoes Against Oncoming Threats


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Amazon on Wednesday unveiled five new Echo products that raise the bar in the automated home market.

Among other things, Amazon has improved the sound quality in its second-generation Echo speaker to compete with several new competitors in the high-end audio segment.

The new Echo, which is more compact and comes in a variety of shell colors and finishes, offers more immersive sound. It has a new speaker architecture, a dedicated tweeter, Dolby sound processing, and a 2.5 inch down-firing woofer.

The new smart speaker uses Amazon’s second generation far-field technology, which offers improved wake word-processing, better beam-forming and enhanced noise cancellation. These improvements are designed to help Alexa understand users’ commands, even from across noisy rooms.

The Echo allows users to listen to music from several different streaming services, including Amazon Music, Spotify, Pandora, iHeart Radio and TuneIn.

The new Echo speaker is available for a reduced price — US$99.

Amazon also unveiled Echo Plus, which includes a built-in hub for managing smart home devices.

Users can give the command, “Alexa, discover my devices,” to trigger the Echo Plus to find and set up lights, smart locks, electrical plugs, switches, and other devices without additional apps or hubs.

The technology is compatible with ZigBee devices like Philips Hue, GE and Kwickset, among others. Customers receive a Philips Hue smart lightbulb for free with the purchase of an Echo Plus, while supplies last. The Echo Plus sells for $149.99.

The Echo Plus also has improved sound, with 360-degree omnidirectional audio, and Dolby processing for deeper bass and crisper high notes. Users can stream from the above-mentioned music services. Amazon Music users also can search for songs by individual lyrics or time period — or the service can choose music for you.

Alexa Tech

The new Echo and Echo Plus include new Alexa software, as well….

Amazon’s B2B Business Blows Past 1M Customer Mark


Amazon Business, launched in April 2015, this week announced that it had reached the 1 million customer milestone.

“This is rapid growth,” said Ray Wang, principal analyst at Constellation Research.

It’s attributable in part to a crossover effect from the large number of B2C customers Amazon has, he told the E-Commerce Times.

Amazon Business offers business-only pricing on millions of products, and access to more than 85,000 business sellers.

Customers include hospitals, educational institutions, laboratories, daycare centers, government agencies, restaurants, Fortune 50 companies and sole proprietors. They range from Con Edison to Gwinnett County Public Schools to Johns Hopkins University to the Mayo Clinic and Siemens.

Amazon Business’ Appeal

This is what customers say about Amazon Business:

  • User set-up is simple and doesn’t require any staff training;
  • Pricing is competitive;
  • Customers can track purchases easily;
  • It’s easy to find products;
  • Amazon offers rapid delivery;
  • Customers can get large amounts or large items delivered easily; and
  • Administrative work for procurement is reduced.

Amazon Business provides free two-day shipping on orders of US$49 or more.

The site is Amazon Prime-compatible.

It offers multiuser accounts with approval workflows and purchasing analytics, and it lets users create custom groups to match their organizations.

Customers can pay with corporate purchasing cards or through an Amazon corporate credit account. Amazon offers tax-exempt purchasing for qualifying organizations.

The site can be integrated into customers’ purchasing systems.

Amazon Business offers an analytics dashboard for customers to track and monitor their spending, with dynamic charts and data tables. Both administrators and requisitioners can access the analytics tool.

Customers can analyze spend by individual users,…

ANALYST CORNER How Amazon Is Transforming Retail


Amazon’s plan to buy Whole Foods Market has raised many new questions. If the company is successful in making the acquisition, and then successful in operating the business, it could transform the entire grocery industry.

If we pull the camera back, we can see how success on the grocery side could foreshadow Amazon’s success in many other parts of the retail environment, furthering the expansion that began two decades ago in the book business, when Amazon challenged Borders and Barnes & Noble.

However, as successful as Amazon is in many different arenas, it is not successful with everything it tries. Remember the Fire Phone Amazon released a few years ago? It was a big flop. Amazon pulled itself out of the wireless handset business so fast it made our heads spin.

Not that Amazon is the only company to fail at wireless. Comcast, Time Warner Cable, Facebook and others met with the same fate. Just because a company is a leader in its field, that does not mean it can be successful in other sectors. It must prove itself in each market it enters.

Still, the grocery business is part of the retail world, and Amazon so far has been very successful at turning the retail world on its head.

Amazon Go and Whole Foods

Amazon’s entry into the grocery business threatens current industry leaders like Kroger, Publix, Walmart and Target. Amazon began experimenting in this segment a while ago with a store called “Amazon Go.”

Amazon Go is a different kind of grocery store. Customers walk in, grab what they want, and walk out. Their smartphone app automatically rings up their purchases. Is that the model Amazon will…

FTC to Take a Gander at Amazon’s Discount Pricing Practices


The U.S. Federal Trade Commission is looking into Amazon’s discount pricing practices in response to a complaint filed by Consumer Watchdog over the company’s pending US$14 billion purchase of the Whole Foods grocery chain, Reuters reported last week.

“Asking informal questions about issues potentially related to a corporate acquisition is a natural part of the FTC review process,” observed Charles King, principal analyst at Pund-IT.

That said, it might be worth considering whether Consumer Watchdog’s allegations might be a shield for politically motivated actions by the FTC, he told the E-Commerce Times.

Although the Trump administration has yet to nominate three new FTC members, including the agency’s chairman, “given the rancor between the president and Amazon CEO Jeff Bezos, it’s worth considering,” King mused.

Consumer Watchdog’s Allegations

Consumer Watchdog earlier this year published a study that found widespread use of inflated list prices on Amazon’s U.S. website. However, Amazon rejected those findings, saying it had eliminated list prices when it believed they weren’t relevant its customers.

It introduced a “was” price to provide customers with an alternative list price when it didn’t display the list price, the company said.

Consumer Watchdog conducted a follow-up study last month, which examined 1,000 items advertised on Amazon.

It found the company had employed deceptive sales tactics — among them, displaying a struck-through price near the price it charged for a product, and indicating that the difference was the amount the consumer saved, although in many cases the product never had been listed at the struck-through price.

Amazon displays four types of reference prices: list, was, sale, and amount saved — indicated by the struck-through price.

Consumer Watchdog found…

With Echo Dot at Bat, Amazon Scores Prime Day Home Run


Amazon has hailed its third-annual Prime Day promotion as its single biggest global shopping event ever. The sales event, held earlier this week, reached US$1 billion in sales, according to some analyst estimates, surpassing year-ago sales by 60 percent and beating the company’s prior Black Friday and Cyber Monday records.

More members joined Prime on this year’s Prime Day than on any other single day in the company’s history, Amazon said, although it did not release any figures to back up that claim.

However, tens of millions of the company’s estimated 85 million Prime members made a purchase on the site on Prime Day — 50 percent more than a year ago, according to the company.

“First and foremost, Prime Day is a retention and acquisition tool for [Amazon’s] valuable Prime program, in addition to being their biggest opportunity to sell their own products to customers,” Clarus Commerce CEO Tom Caporaso told the E-Commerce Times.

Smart Speaker, Smart Sales

Amazon struck the jackpot with record sales of its Echo Dot mass market smart speaker — which sold better than any other product on offer from all manufacturers and across all categories — after it slashed its already low price from $49.99 to $34.99. Amazon sold seven times more Echo Dot devices on this Prime Day than on Prime Day 2016, it said.

Prime Day also marked the biggest single sales day for Amazon devices ever, with record sales of Echo smart speakers, Fire tablets and Kindle devices.