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Amazon is ruthless...

Discussion in 'General Entrepreneur Discussion' started by irishmickk, Jan 11, 2018.

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  1. irishmickk
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    irishmickk Bronze Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    As many of you know I sell a pullup and dip bar, on Amazon I always hover around the seventh to tenth spot on the list of best selling pullup bars. (Amazon Best Sellers: Best Strength Training Pull-Up Bars)

    For as long as I've been keeping an eye on this list, the Iron Gym, which is a very well known brand name and has about 4,000 reviews was always in the number one spot. I noticed yesterday that there's a new pullup bar in the number one spot and the Iron Gym isn't even on the first page anymore, you guessed it, it's Amazon's own brand pullup bar which is identical to the Iron Gym which jumped right into the top spot with only 30 something reviews :rofl:

    It's also topping the list of New Releases...
     
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  2. Fpm9
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    I'm not surprised, it will probably increase Amazon profits. When I'll launch my product I'll probably sell it on Amazon too, but I'll focus more on trying to sell from my own website.

    It reminds me of when Youtube changed their rules and thousands of people complained about not making money anymore, saying its unfair and youtube was already making millions of $. If this is unfair, why don't they create their own youtube ?
     
  3. JAJT
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    JAJT Ha Ha! Business Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    It's possible (even likely?) that Amazon released the same exact product at a lower price point than Iron Gym.

    When customers saw that the same bar was for sale by two different sellers, they picked Amazon's brand even despite almost zero reviews because Amazon has strong brand equity and trust.

    Iron Gym used to sell their product around the 25 - 30 dollar point: Iron Gym Total Upper Body Workout Bar (B001EJMS6K)

    You can clearly see that 19.99 only happened due to competition with Amazon themselves.

    If I were a customer I know I'd pick Amazon's brand over even a highly regarded identical one from a different seller.

    Between the price disparity (initially) and the brand equity issue, I think Iron Gym fell naturally due to a sales difference rather than ranking manipulation shenanigans.

    Now, I'm not saying Amazon didn't manipulate things - they very well could have, but it's also possible that dropping from the first place is the natural result of a brand equity and price disparity.

    This is the danger of private label products - it's not your own. It's just your brand. You can't compete against Amazon's brand on Amazon's own platform on the same product. It's just not possible.

    Also possible, although I'd call this the "distant third" option - Amazon is sourcing their own version from Iron Gym. I don't know how Amazon behaves in this regard but it's possible this is also the case. From Iron Gym's point of view it would be win-win - whether a customer buys Amazon Basics or Iron Gym, Iron Gym wins.
     
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  4. irishmickk
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    irishmickk Bronze Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    Of course anything is possible but it's very very unlikely imo. I searched Iron Gym on Amazon and their listing (https://www.amazon.com/Iron-Gym-Total-Upper-Workout/dp/B001EJMS6K) shows that they are the 72nd best seller in the whole category or Sports and Fitness, for some reason they have been removed from the Pullup bars category. Amazon's own pullup bar is around 1000 in the Sports and Outdoors category, this means they would still be No.1 in the Pullup bars category by a mile. How you get listed in Categories is completely down to Amazon I believe (apart from initially picking the most suitable category when you list your product), I know I have tried in the past to get listed in both the Pullup bars category and the Dip bars category but amazon refused despite some competitors being listed in both. Maybe someone with more experience with Amazon will be able to chip in about category listings?
     
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  5. The EL Maven
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    The EL Maven No longer life's passenger Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I would assume (because they've been doing it for a few years now) that Amazon would look for generics to import under their own brand.They know what's searched for, they know the sales velocity, it's not difficult for a team at Amazon to continually look around and find the low hanging fruit. Sure, they'll burn their sellers, but they won't care since they effectively replace those sellers. The only defense is to go proprietary and be difficult to copy.
     
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  6. LeoistheSun
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    LeoistheSun Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Have a patent for the stuff you sell. That's Fastlane right there.
     
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  7. Digamma
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    Digamma Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Why wouldn't they? It's their platform. If they didn't give relevance to their own products it would just be plain dumb.

    As a side note, as a consumer, I welcome this. When I buy Amazon I know I'll get top notch product and service. That kind of trust is hard to beat.
    Which would be the commandment of Entry.
     
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  8. JAJT
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    JAJT Ha Ha! Business Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I've literally NEVER seen an issue getting listed in the proper category.

    Firstly, you can do it yourself in the back end. There's literally a button for it.
    Secondly, if that fails, you can do it yourself using a csv file upload and category number - harder, but it's more of a "brute force" method that works when the first doesn't.
    Thirdly, you can open a ticket if those two fail, and simply say "please list my pullup bar with ASIN 1234456 in the pullup bar category, thank you" and they will happily oblige.

    I've done all 3 numerous times in previous products I've listed and not a single time have I ever had issues. Mind you, sometimes the first and second method doesn't work well for "stupid amazon system" reasons, but the third ALWAYS worked for me.

    What did support say when you requested the change? Have you asked support?
     
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  9. justonemore
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    I fear that in 20 years there will only be 2 big companies left in business.
    Amazon and Google.
    Everything else will eventually get eaten or killed.
     
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    Envision Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    They're ruthless but this is why you need to build a brand and not just sell a product.

    I sell in a very similar niche as you (we talked on FB yesterday btw) and honestly i cant see Amazon competing with my brand simply because of how it's positioned. People dont think Amazon is cool - they cant replace Nike, Adidas, or Reebok. They could in some crazy future buy them if they got big enough but no one is going to think that Amazon Shoes are cooler than Nike Shoes...

    Do NOT sell a product - build a brand, create brand equity and provide amazing customer service and while you may get delisted on Amazon (this isnt the first time ive seen this) you will still own your brand and be able to grow.
     
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    Couldn't agree more. A lot of people in this game don't realize that if you build a REAL brand, you're already ahead of 95% of the people trying private label/ecommerce.

    Also, for the guys in the supplement space (myself included), did you know amazon has a vitamins/minerals brand now at prices you cannot compete with at all. Again, this is where branding comes into play.
     
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  12. Envision
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    @JAJT in regards to this point, ive read stories where Amazon shuts down high performing products and asks for verification including suppliers and all details for "verification" purposes. Once they got the details they allow you to go back to selling however a couple months later your manufacturers wont supply you anymore because they are supplying someone with an exclusive agreement that is placing HIGH volume orders... It was Amazon, the person was shut out from their manufacturer and taken over by Amazon shortly after on the platform.

    EDIT: A TIP FOR ALL FASTLANERS

    In regards to my point above, this is why you ALWAYS want to have atleast 2 backup manufacturers and I like to have them in multiple countries to prevent any issues that could come up with importing. This also helps in case of overflow, manufacturers going out of business, etc.

    If someone were to require you to provide manufacturing details, i would NEVER disclose my primary manufacturer and as I built the relationship I would sign paperwork with that manufacturer to never disclose my business relationship with them
     
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  13. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    This is highly important. A listing, however well presented is not sufficient. A brand name, however catchy or memorable is not sufficient. Slapping on a label to differentiate is not sufficient. Ordinary service is a recipe for failure, it must be outstanding. Building a brand is all of these and more.

    You not only need backup suppliers but you also need a backup sales venue, preferably your own eCommerce site.

    Signing paperwork with a manufacturer to never disclose your business relationship with them is unlikely to be of benefit if the supplier is in China. It's only the relationship that gives
    you any chance of having them treat you that way.

    Asking them to sign would be deemed offensive to a Chinese business person, but there would be no harm in telling them that it is important to you to never have that relationship disclosed to other businesses.

    Many vendors have already given Amazon all the sourcing information Amazon need simply by shipping direct from manufacturer to Amazon. Send via your own premises if possible or via an independent fulfillment service. Otherwise, if your product sells like hot scones, Amazon will take it over as their own, and you have made it easier for them.

    Walter
     
  14. irishmickk
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    irishmickk Bronze Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    Sorry maybe I should have been more clear, I was listed in 2 categories (Pullup bars and something like Pushup Stands) and asked to be listed in both the Pullup Bars and Dip Stands categories because they are better descriptions of the product but Amazon refused and removed me from the Pushup Stands category so I was listed in just Pullup Bars.

    Obviously I don't know what's happening behind the scenes but I think if Amazon is advertising this "Best sellers" list as a ranking of the products with the most sales they should not be manipulating it.
     
  15. JAJT
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    I'd have to look into it.

    They used to allow 1 main category and 2 secondary categories but there was a LOT of fuckery going on from sellers (like listing in any category that you can rank well in regardless of how well it fit).

    It's entirely possible they've clamped down on this and changed the rules.
     
  16. Valor
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    While I certainly don't advocate making it easier for Amazon to rip your product off, make no mistake; Amazon can and will get the information from your supplier if they want it, whether you are shipping it directly to their warehouse from your manufacturer or not.

    They can (and have) put a review on your account pending certain required information and basically hold your account ransom until they get said information. This happened to me a couple years ago when I first started selling on there, although it didn't lead to anything. And if you don't give them information, one of your competitors will one way or the other.

    Obviously the best and only method for avoiding this is through your product design, guarantees, brand, and customer service. Amazon could technically still rip my product off (as well as almost any product if they want to bad enough), but I've positioned myself so that there are so many more attractive products for them to rip off before mine.

    Like I said, I don't advise making it easy for them, but it's unwise for people to lie to themselves and think just because they aren't shipping direct to Amazon, that their product is safe. If you sell on Amazon, you're simply a tool for low-capital growth for them, and you're at risk of Amazon's tactics.
     
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  17. Walter Hay
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    I agree that avoiding shipping direct is not an ironclad guarantee that Amazon can't find your supplier. I just say, why make it easier for them?

    As I wrote above, building a real brand is your best protection. To improve on that you should also have your own eCommerce site and incorporate the URL in your labeling, whether it is added to the product and/or package, or else an integral part of the product itself, i.e., molded into or otherwise etched into the product.

    I would like to add, that I also advocate post-production labeling and brand incorporation so that even your supplier doesn't know the details.

    Walter
     
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    I see quite a few posts that say be careful about sending direct to Amazon since they could get your supplier information. As a manager for Amazon who works in one of the largest FC's in North America, I thought I'd offer my insight into this.

    When your shipment is unloaded off the truck, its put on a conveyor that goes down a line of people called, appropriately, receivers. Receivers cut open your box, ensure an ASIN label is properly attached, and scan it into a tote. Your box, which had supplier info on it, is thrown on another conveyor that ultimately dumps all boxes into a huge compactor. I have been in FCs all over the country, and that is how it is everywhere. No one gathers any kind of info from boxes.

    If Amazon wanted to get your supplier info, the more likely route, which has been discussed, is to do a verification on you and demand that info as some kind of proof. I can't say for sure this doesn't happen, but I doubt a multi billion / year revenue retailer needs to go through all that to find a supplier. I would guess most suppliers would throw themselves at Amazon for a chance to do the kind of quantity Amazon wants to do. And even if they don't throw themselves, Amazon has a MASSIVE team in China that they could easily send around to any number of manufacturers to inspect products first hand, they can easily negotiate changes to the product given what their order size would be, and they can probably easily ensure a supplier doesn't sell a certain product to anyone else because Amazon can throw huge amounts of money toward litigation, and besides, a supplier would rather make Amazon happy and keep their business much more than your normal importer.

    So, as has been said, your own brand, selling in channels other than Amazon, is crucial. But if you can ship direct to Amazon without worrying about quality concerns, my opinion is to do it, because it should be cheaper than sending again from your home / warehouse / wherever you ship from.

    EDIT: I just searched Amazon for pull up bar. Iron Gym is number one and labeled as Amazon's Choice, although it does appear below two sponsored ads, the first of which is Amazon Basic's Pull Up Bar.
     
    Last edited: Jan 12, 2018
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  19. Walter Hay
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    @B_Mac I really appreciate this information straight from the horse's mouth. The numerous reports I have received have been anecdotal, without any authoritative backing, but there have been so many that I was inclined to believe them.

    I have personally experienced the immense influence that huge companies can have on Chinese suppliers, resulting in abandonment of long-standing, quite substantial customers, because the supplier has found the holy grail of Chinese manufacturers, namely a huge multi-national customer.

    It's true that those huge companies have vast resources enabling them to do intensive product sourcing, but even with those resources they won't always find the manufacturer they are looking for. Locating the actual manufacturer of a specific product is one of the more difficult tasks in product sourcing unless the product is one of the big brands, in which case it is much easier.

    The easier way for them is to send samples for copying or improving, and I have seen many such samples being copied in Chinese factories that I have been visiting.

    Walter
     
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  20. AllenCrawley
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    Sorry but needs to be said and I wrote 2 books about it: Amazon cannot co-opt (steal) a productocracy. They co-opt commodities with litle differentiation other than price.
     
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    Amazon is doing the same thing to mom and pop e-commerce that WalMart did to Mom and Pop stores in the 80s and 90s. I remember reading the HBR cases in college on how WalMart squeezed suppliers then.
     
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    Aside from your books, have you sold a product on Amazon?
     
  24. MJ DeMarco
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    Nope, have you?

    In fact, have you done ANYTHING entrepreneurial in your life?

    You've been here 5 years and I'm still yet to hear you do anything except being a first class troll with a PhD in armchair-entrepreneuring.

    And to expand on your question, no, I have not sold anything else on Amazon because I don't need to. And if I did, it would simply be one channel to a product I invented, created, and own (books fit that mold)-- not something imported from China that can be easily knocked-off by Amazon, or knocked off by people like you lurking around corners looking for easy money.

    Keep it up.

    At some point I'm going to say f*ck it: I'm not going to allow you to tailgate me with your counter-insurgency at everything I post just so you can play internet peacock in your double-wide.
     
  25. KLaw
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    Damn. Dude. It was just a question. Not sure why you got so defensive. I simply asked if you have sold anything on Amazon. No. I haven't sold anything on Amazon. Your next question about entrepreneur...only on a small scale. My problem is lack of focus and limiting beliefs. You totally took my q the wrong way.