[ BDSN ] ⚠️ Alert: Amazon Sellers, Change is Crashing Your Sales Party

🕰️ IS the CLOCK TICKING on TIK TOK SHOP?

The future of TikTok in the U.S. is currently in a state of flux, with significant implications for users, content creators, and sellers on TikTok Shop.

The House Energy & Commerce Committee unanimously passed legislation last week to compel ByteDance to divest TiKTok within six months or face having the social media platform banned on app stores and web hosting services in the USA.

The committee voted 50-0 for the legislation, which now must be voted on by the full House. The move is driven by national security concerns regarding the potential for the Chinese government to access vast amounts of American user data.

The vote followed a lobbying effort by TikTok, including sending prompts to users urging them to contact their member of Congress to protest the legislation.

Lawmakers’ offices reported being inundated with calls, but the strategy may have backfired when it came to members of the committee.

With TikTok's user base in the U.S. exceeding 170 million, the implications of such legislation are profound, particularly for sellers on TikTok Shop who rely on the platform to reach consumers and drive sales.

Critics of the bill argue that it infringes on Americans' First Amendment rights and could negatively impact millions of small businesses and content creators who depend on TikTok for their livelihoods.

The American Civil Liberties Union has labeled the bill unconstitutional, suggesting it trades First Amendment rights for political points.

For sellers on TikTok Shop, the potential ban poses a significant threat to their ability to market and sell products to a vast and engaged audience. The platform's unique algorithm and social commerce features have enabled many small businesses and entrepreneurs to thrive.

However, there are reasons to believe that the proposed ban might not come to fruition or its impact could be mitigated. The legislative process is complex and uncertain, and previous efforts to ban TikTok have stalled.

Additionally, the bill offers ByteDance the option to divest TikTok to a U.S. company, which could allow the platform to continue operating in the U.S. under new ownership, potentially preserving its utility for both users and sellers.

As the legislative process unfolds, stakeholders will be closely monitoring developments and preparing for a range of possible outcomes.

🧭 AMAZON PUTS BRAKES on GLOBAL DOMINATION

Amazon's ambitious global expansion plans have hit a significant slowdown, a departure from its aggressive growth strategy in recent years.

In 2022, Amazon had its sights set on opening storefronts in Ireland, Belgium, and Switzerland, alongside plans to introduce original Nigerian content on Prime Video as a precursor to establishing an e-commerce presence in Nigeria.

The company's expansion efforts have largely stalled. Of the European countries targeted, only Belgium saw the launch of an Amazon online store in October 2022.

Plans for storefronts in Ireland, Switzerland, Nigeria, Chile and Colombia have been put on hold, with no new international sites introduced in 2023.

This marks a significant shift for Amazon, which had consistently opened at least one new international website annually since 2016.

South Africa has been announced as the next marketplace to open this year, and is now accepting seller registrations.

 📊 SALES HISTORY NOW REQUIRED for COUPONS

Starting tomorrow, March 12, the way you can use coupons as a seller on Amazon is changing.

You will no longer be able to run a coupon until you have first established a sales history. That means no more coupons allowed for new product launches.

You also will not be able to later raise the price then apply a coupon to “bring it back down” to the original price.

All products will now have to have a sales history (it is not clear yet how many sales that is) to establish a “was price” before you can run a coupon. For established products, the “was price” is based on a 90-day median.

The coupon also must be at least 5% lower and no more than 50% off.

🏦 AMAZON STOPS LOANING MONEY to SELLERS

First launched in 2011, Amazon’s invite-only lending program in the USA and UK is discontinuing giving term loans to sellers, in part due to a high rate of defaults.

In 2022, Amazon Lending served an aggregate of $50 billion of loans ranging from $1,000 to as high as $750,000 per loan.

Amazon tightened its underwriting requirements yet doubled its average outstanding loans to nearly $2 billion in 2023. About 1.4% of those loans defaulted and were written off.

Despite the growth, the Amazon Lending division will cease underwriting its own loans to merchants, according to an email like the one below sent to some sellers:

Amazon Lending will continue to service existing loans for sellers that the company has already underwritten, as well as those that have recently been offered to sellers. But no new loan offers will be made.

Amazon will still market financing solutions offered by other “trusted third-party providers with deep experience in lending and servicing financing programs.”

An alternative option to consider if you need financing for your UK or USA based account is Uncapped.

🤖 RUFUS AI SEARCH SUCKS

Shira Ovide of the Washington Post (owned by Jeff Bezos) recently tested Amazon’s new Rufus AI powered shopping bot and was less than impressed.

Designed to streamline the shopping experience by offering personalized product recommendations, it has so far fallen short of expectations.

For buyers accustomed to navigating Amazon's vast product offerings, the promise of a chatbot capable of discerning the best products for specific needs like vacuum cleaners for pet hair or starting a composting project at home seemed like a significant advancement.

However, the reality has been a mix of irrelevant suggestions and a lack of trust in the chatbot's recommendations, leading to frustration rather than facilitation of the shopping process.

For third-party sellers, the chatbot's inability to effectively narrow down product choices might deter buyers from discovering niche products or new listings that could perfectly meet their needs, potentially stifacing sales for sellers who rely on Amazon's algorithms to connect them with their target audience.

On the other hand, the chatbot's shortcomings may drive buyers to rely more on traditional search and review methods, maintaining the status quo of competition among sellers.

As Amazon continues to develop and refine Rufus, the impact on third-party sellers will largely depend on the company's ability to improve the chatbot's accuracy and reliability in making product recommendations that resonate with buyers' specific needs and preferences.

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See you again on Thursday …

The answer to today’s STUMP BEZOS is
an estimated 1,363 in the USA alone