Amazon faces antitrust lawsuit Some sellers said that the platform algorithm is overly biased towards their own brands Amazon drops more than a dozen affiliated brands Third-party sellers profit from this… 01 Good news: Amazon cancels some of its own products Amazon's search algorithm has always been a hot topic for sellers, but there are frequent rumors, " Some sellers claim that Amazon's search algorithm is overly biased towards its own brands, causing the platform's traffic balance to be seriously tilted." The sellers' concerns are not groundless. Not long ago, the platform was fined 112.8 billion euros for abusing its dominant position. However, at the antitrust hearing, Amazon was asked whether it used other users’ data to support its own products. In response, Amazon said that they strictly abide by their privacy policy and prohibit the use of third-party sellers’ data for the promotion of their own products. As a company with both an e-commerce platform and self-operated retail presence, Amazon said it is currently facing policy supervision and pressure to ensure a fair and just competitive environment. The answer given by Amazon to this matter is obviously difficult to convince the public, and whether the platform is fair and just is a matter of opinion. In fact, this is not the only time Amazon has been punished. The number of mistakes Amazon has made in this matter can be said to be unprecedented. Recently, in order to circumvent the enforcement of antitrust laws, Amazon had to close brand stores with too low sales. This is an inevitable move. The Amazon brand only accounts for 1% of sales. For the sales volume that is not enough to cover the expenses, Amazon has to make a choice, and giving it up is the best option. 02 Resist antitrust, reduce costs and increase profits According to a report by The Wall Street Journal on August 10, Amazon plans to eliminate dozens of its own brands. This move has made the above speculation more clear, aimed at responding to antitrust scrutiny and boosting the company's profits. “Amazon has given up dozens of its own brands, leaving only 3 out of 30?” Amazon has decided to eliminate 27 of its 30 clothing brands in the past year, including Lark & Ro, Daily Ritual and Goodthreads, according to people familiar with the matter. Although some of these brands still sell remaining inventory on Amazon's website, after the inventory is cleared, Amazon will only retain three of its own clothing brands: Amazon Essentials, Amazon Collection, and Amazon Aware. Amazon also plans to phase out its own furniture brands, including Rivet and Stone & Beam, once they are cleared of inventory. “We’ve always made decisions based on customer needs, and we know customers love our value-for-money products like Amazon Basics and Amazon Essentials,” Matt Taddy, vice president of Amazon’s private brands, said in a statement. These moves all indicate that Amazon's private brands have been on the decline. They also reflect Amazon's efforts to deal with antitrust scrutiny and try to focus on developing some popular and profitable private brands. 03 Third-party sellers profit from But for sellers, Amazon's cancellation of its own products is a good thing On the one hand, the cancellation of self-operated products may lead to the dispersion of platform traffic as buyers will be directed to the product pages of other sellers. This may increase competition among sellers, requiring each seller to work harder to attract and retain customers, but it is also more fair and just. On the other hand, removing private-sale products could increase customer orders. When buyers search for a specific product on Amazon, they will see more sellers offering that product, which means they have more choices. This may prompt buyers to compare between different sellers and ultimately increase the number of purchases made by customers. Although antitrust lawsuits may have a certain impact on Amazon's business, the specific extent of the impact is difficult to quantify, and may cause Amazon to make some business adjustments or restrict certain behaviors to comply with antitrust regulations. However, the ultimate impact depends on multiple factors, including product quality, pricing, marketing strategy, and the relationship between sellers and buyers. As one of the world's largest e-commerce platforms, Amazon still has great influence and market share, so buyers don't need to worry too much about this. Sellers can evaluate the impact of this change on their business based on their own situation and business model, and adjust their strategies accordingly. |
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