At The Wall Street Journal, Dalvin Brown explains why retailers are willing to go all out to get returns processed faster, even picking them up at your home. Watch: … [Read more...]
Walmart’s Newest Fulfillment Center Is Its Largest Yet
Walmart has pioneered the "big box" model of retail, with big box stores and even bigger warehouses to house its massive logistical operations. Now, Walmart has built its largest fulfillment center yet outside of Indianapolis. The center is the second of a whole new breed of fulfillment centers Walmart calls "next generation" facilities. These new facilities are purpose-built not only to serve Walmart stores but online sales as well. The newest fulfillment center is 2.2 million square feet. Ben Ames reports on the facility for DC Velocity: Retail giant Walmart on Thursday opened the second of … [Read more...]
Wall Street Regretting Bet on Online Retail Aggregators
Wall Street firms bet big on online retail aggregators during the pandemic, but now some firms are regretting their entrance into the market. Spencer Soper reports: During the pandemic, Wall Street banks and private equity firms invested billions of dollars in startups rolling up popular brands sold on Amazon.com Inc. The bet was that these upstarts, fueled by an online sales boom, would become the next consumer product conglomerates — like Procter & Gamble or Unilever. Then the pandemic ended, consumers returned to the stores, and Amazon’s sales growth cratered — erasing almost half … [Read more...]
Can Amazon Turn Itself Into a Influencer Mecca?
Amazon is working hard to integrate itself into the ecosystem of influencers who have grown up on YouTube, Instagram, and TikTok. They have star power Amazon wants to harness in order to sell its wares. David Lee reports in the Financial Times: Amazon has stepped up plans to crack the QVC-style livestream shopping market as the $1tn ecommerce giant aims to replicate the success of social media rivals in an attempt to revive flagging online sales. The group has been increasing investment in Amazon Live, a platform it quietly launched in 2019 but is now a central focus as it fights to grab a … [Read more...]
Warehouse Developers Watch Amazon Slowdown with Trepidation
The warehouse development industry is viewing Amazon's profit warning as a possible sign of the end of a good run. George Hammond reports for the Financial Times: Fears that the Amazon-propelled boom in ecommerce is running out of steam have wiped billions off the value of the world’s biggest warehouse owners in recent days, reversing some of the huge gains made by the sector during the pandemic. A profit warning from Amazon on Thursday evening triggered steep share price falls, providing an indication of how much warehouse owners rely on the ecommerce group as a customer for space and a … [Read more...]
Amazon Passes Inflation onto Suppliers
Amazon is charging its marketplace suppliers an inflation and fuel surcharge of 5% to compensate the firm for higher costs. That doesn’t sound unreasonable given soaring inflation, but it should be a reminder to all small businesses who hitch their wagon to big dominant marketplaces like Amazon, Facebook, and Google, that when times get tough, smaller partners' margins will be the first to get sacrificed. Etsy is imposing a similar price hike, raising their take of sales to 6.5% from 5%. Etsy sellers are trying to boycott, but Etsy holds all the cards in these relationships. The upshot for … [Read more...]
SALES SLOW: Inflation, Shortages, Fear, Hurting Retailers’ Sales
Retailers were unhappy to see sales growth slow to only 0.3% growth in November. That's a far cry from October's growth of 1.8%. There are many reasons sales growth is slowing, including summer fears of shortages that led many shoppers to buy early, and stimulus measures that have driven prices for food and gasoline higher, taking away dollars that may have been earmarked for Christmas presents. After months of politicians telling shoppers to "shop early," to avoid shortages, shoppers may simply be done shopping for the season. Gabriel T. Rubin reports in The Wall Street Journal: “If … [Read more...]
Billions Pour Into Amazon Seller Roll-Up Funds
Investors can't get enough of roll-up funds that buy Amazon sellers. John Thornhill reports for the Financial Times: Any sober seller might think twice about doing business with a company whose founder was wedded to the idea that “your margin is my opportunity.” But many merchants, desperate to stay afloat as retail sales shifted online during the pandemic, have had little choice but to sell on Amazon’s vast marketplace. At last count, some 56 per cent of the units sold on Amazon’s platform were made by 1.9m third-party sellers. Jeff Bezos may have blasted out of the chief executive’s seat … [Read more...]
Big Businesses Consolidating Amazon Retailers Leads to Uncertainty
There's a group of big businesses known as "aggregators," that are buying up small Amazon.com stores, and consolidating them. The bigger these aggregators become, the more power they have both in the market for future acquisitions, but also with respect to Amazon itself. Dave Lee explains in the Financial Times (abridged): Reaching the top of Amazon’s listings, even for the most innocuous of products, can translate to millions of dollars of sales. So in the past 18 months, at least 69 start-ups have raised some $7bn to begin buying up successful Amazon sellers, in the hope of building a … [Read more...]
Can You Trust Amazon Ratings?
Amazon may have a ratings problem. Sellers of some items are breaking the rules on paying customers for ratings, and some ratings may not be real at all. Nicole Nguyen reports in the WSJ: A charging brick recently caught my eye on Amazon. AMZN +0.13% It was a RAVPower-branded two-port fast charger, and it had five stars with over 9,800 ratings. The score seemed suspect but Amazon itself was the seller, so I added it to my cart anyway. The device arrived a day later, along with a clue to all that customer satisfaction. A small orange insert offered a $35 gift card—roughly half of the … [Read more...]
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