Amazon's Record Quarter, Seller Data and the Congress Hearing
Amazon has frequently made headlines in recent weeks: the pandemic brought Amazon remarkable quarterly figures for Q2, but Jeff Bezos has had to face questioning by Congress together with the other CEOs of the “Big Four” tech companies in the USA. More information can be found in our summaries below.
General Updates
Amazon reports record quarterly profit and 40% sales growth with strong COVID-related demand
Amazon reported its second quarter profits on July 30th. The results show how Amazon is proving to be one of the biggest beneficiaries of the COVID 19 pandemic as more people shop online and companies increase their use of cloud computing. Amazon had a net profit of $5.2 billion after announcing that it will spend the expected $4 billion on COVID-related initiatives.
https://www.reuters.com/article/us-valentino-amazon-lawsuit/amazon-valentino-file-joint-lawsuit-over-shoes-counterfeiting-idUSKBN23P2M3Amazon spent $4 billion on anti-coronavirus measures in Q2
Amazon CEO Jeff Bezos had promised to spend $4 billion in the second quarter to fight the coronavirus: This has indeed happened, and that’s not all. The company will invest another $2 billion in the third quarter in an effort to contain COVID-19.
https://www.cnbc.com/2020/06/17/how-wayfair-is-becoming-the-amazon-of-the-home-goods-market.htmlJeff Bezos’ hearing before the US Congress shows Amazon’s power over Sellers
For over a year, the subcommittee of the US House of Representatives has been investigating criticism of large tech companies for exploiting their excess of power. The first hearing of the “Big Four” took place on July 29th, when Amazon CEO Jeff Bezos had to face critical questions about Amazon’s handling of third party seller data. His answers made clear the power Amazon has over 3rd party sellers.
Amazon is under new antitrust investigation in the USA
The FTC and attorneys general from New York and California have launched a new antitrust investigation into Amazon’s online marketplace. Amazon has come under fire in recent months for potentially anticompetitive behavior after it was reported that the company secretly used its data on third-party vendors and startups to bring competing products to market.
https://blog.aboutamazon.com/sustainability/we-are-all-in-on-the-climate-pledge-net-zero-carbon-by-2040https://mashable.com/article/amazon-dash-carts-shopping/?europe=trueAmazon extends tests of robot deliveries to other states
Amazon introduced its six-wheeled delivery robot Scout in January 2019 but has been slow to expand its field tests. After starting in a single neighborhood in Snohomish County, WA and adding a larger site in Irvine, CA last August, Amazon accounted that is now testing Scout in Atlanta, GA and Franklin, TN.
Reduction of commission fees: Will Amazon sellers be tempted to switch to Google Shopping?
Google announced last week that it would abolish commission fees for sellers for purchases made directly through Google Shopping and open its sales platform to third-party sales tools. Google Shopping had about 3,700 shops and other merchants at the end of 2019, compared to 3 million active sellers on Amazon. The switch comes against a backdrop of rising complaints from small businesses that Amazon is pressuring them for more fees.
Comment: Amazon and Seller data
For anyone who deals with the largest e-commerce marketplace in the world on a daily basis, it is no surprise that Amazon is using its market power over third-party sellers. Too obvious are many examples of copied Seller products that we have come across in the past years.
One can counter this by saying that it is also common for other large retailers to create their own brands when certain retailer products are doing particularly well. The difference, however, is that Amazon has repeatedly asserted in the past that it does not do this, and as a marketplace wants to (and should) take a different position from traditional retailers.
The fact that Jeff Bezos as CEO of the company is now confronted with these practices and admits possible misconduct is new and a positive sign. Bezos, who had to testify for the first time in this context, is likely unhappy with the resulting press from accusations and associated threats directly from top American officials. It is hoped that pressure will now be brought to bear to change such events, and that the rethinking will also have an effect on other processes: many manufacturers and retailers complain, for example, about disadvantages compared to Amazon’s own brands when it comes to the display of advertisements. More and more often we see that advertising positions are simply replaced by “products of our (Amazon) brands”.
Amazon should consistently enable fair competition and to treat its customers (for once, this does not mean the buyers) better in order to prevent becoming a greater focus of the competition watchdogs.
Top 5 Amazon Keywords
All the best and stay healthy,
Your Team at Remazing
Want to receive these updates to your E-Mail inbox? Click here to subscribe!