Weekly Loop #05: Prime Day Woes

 

Weekly Loop #05

PRIME DAY WOES

Each year since “prime day’s” inception in 2015, Amazon’s artificial “holiday” has brought in more revenue than the previous year. This year was no exception, with Amazon saying it was the biggest single day ever and sales estimates of $1.5 – $2 billion.

Many other big name online retailers have capitalized on shoppers attention by offering competing sales. An Adobe report estimated that revenue for retailers with over $1 billion in annual sales increased by 54% on prime day.

The same report found that “niche retailers”, defined as those with under $5 million in annual revenue, saw an 18% decrease in sales as consumers flocked to the big brand retailers.

That does’t tell the whole story, as many smaller sellers saw increased sales on big brand marketplaces such as Amazon and eBay. However, with the push to lower prices for the “shopping holiday”, profit margins were likely much slimmer.

With sellers bearing the cost of goods, Amazon (or other seller) benefit from another sale no matter the selling point by taking a percent of the revenue. In Amazon’s case, they also benefit by fulfilling a large number of marketplace vendors’ orders, thus generating revenue that doesn’t fluctuate with the selling price.

While “prime day” continues to be a success for Amazon, it poses yet another challenge to niche retailers.

Recommended Links

Each week, we read and watch articles, blog posts, videos, infographics, books and more related to ecommerce. We share some of our favorites links on Twitter, Facebook, and LinkedIn.

In our weekly updates, we pare the links down to our favorite seven links from the past week.

Have a suggestion of something to include? Get in touch.

— Amazon’s Prime Day was once again a success for the ecommerce giant, as well as other big name retailers (walmart, target, ebay, etc). Small retailers didn’t fare as well. 

“Not all retailers benefitted from Prime Day, however. Niche retailers…saw an 18 percent decrease”

Prime Day boosted other large retailers’ sales by 54%, says report
Sarah Perez eCommerce – TechCrunch

“”1

— Here’s a look at PublicMarket, a new blockchain based decentralized ecommerce solution. We’ve written about the problems with centralized marketplaces and have covered  decentralized marketplaces in the past. 

‘Where ecommerce is concerned, in most cases the only winner is the marketplace owner. PublicMarket is attempting to change that”

Publicmarket.io Working to Change the Face of eCommerce
Steve Walters Ecommerce Platforms

“Consider these statistics regarding ecommerce in 2018:

The big three of Amazon, eBay, and Walmart constitute over 60% of online commerce.
Amazon alone will control over 50% of all online sales in the next 3 years.
Amazon alone accounted for 70% of growth in US online retail last year.
The large majority of these marketplaces’ sales come from independent (“third party”) merchants, who bear all inventory risk and fulfillment costs.

In the west Amazon is becoming a near monopoly, and in the east Alibaba/Aliexpress is looking to fill a similar role. This means that for most people, ecommerce is controlled by 1 mammoth corporation, who has no responsibility to merchants or buyers. Their only responsibility is to make more profits to satisfy their shareholders. And since they have near monopolies they are able to add fees and costs to the commerce flow that excludes many smaller merchants while increasing costs for consumers on a growing number of purchases.”2

— One of the difficulties of social media marketing is needing to continually update. With Pinterest, posts typically have a longer life. 

“Unlike Facebook and Twitter, whose posts have half-life measured in minutes, average half-life of Pinterest post is 3.5 months.”

Pinterest Marketing for Ecommerce Business: Drive Traffic with Pinterest
A Better Lemonade Stand A Better Lemonade Stand

“In short, Pinterest is the perfect place to start your sales funnel from. With Pinterest pins, you can build awareness around your brand and products, develop consumer interest, and increase traffic, but then you can also use Pinterest to boost in-store and online sales and influence users to take actions like sign-up to, purchase and install products.
The end goal of using Pinterest for business is to get users to engage with and take action on your pins. Engagement can mean anything from clicking on a pin to see it in detail, saving a pin to one of their boards, sharing a pin with a peer or even trying a pin idea out for themselves. All of this helps to create brand awareness and puts users in the very beginning stages of your sales funnel.
As a brand, you achieve this end goal by first creating great content which helps you become more discoverable and then you make your pins easy for users to take action on whether it’s just clicking on the pin, saving the pin, clicking through to a link attached to the pin, making a purchase, signing up to something or installing your app.”3

— Choosing a niche for your online store is a key in standing out vs competitors. Check out this guide for tips on finding a good niche. 

“The biggest mistake that you could make when you choose a niche is to choose one that has no demand”

How to Find Niche Markets for Selling Online
Marquis Matson Word-of-Mouth and Referral Marketing Blog

“To get fresh niche ideas, it makes sense to go where your target audiences hang out online. Look into their world and see if you can understand their pain points, what they are spending their money on, what their biggest complaints about a particular product are, and whether or not it’s an industry that you’re interested in joining.”4

— A rather far-fetched case is made for Walmart striking at Amazon by providing a service to compete with the delivery portion of Amazon Prime. Really, this shows how difficult it is for even the giants to compete with Amazon.

“Not by providing the same thing as Amazon, but by providing something simpler and more focused”

Now is the time for Walmart to strike at Amazon Prime
Devin Coldewey eCommerce – TechCrunch

“What would this Walmart offering consist of? They already offer free shipping on a lot of items, free store pickup, and so on. You don’t need to use your imagination here. What would make this better? Free 2-day shipping on all items with no minimum amount; grocery and secure package delivery; a set of basic TV and music streams or even just a partnership with a couple existing products; and lastly some in-store benefits like members-only promotions and perhaps even early access on Black Friday. (Plus extra perks at sub-chains like Sam’s Club.)”5

— We’ve written about the importance of product descriptions in the past. Here’s some more tips – or check out our copywriting service to have it done for you by experts. 

“Try to avoid the product descriptions that a wholesaler or manufacturer provides with the product”

Write Persuasive Ecommerce Product Descriptions
Bootstrapping Ecommerce Bootstrapping Ecommerce

“These are the tips, tricks and tools that you can use to write persuasive ecommerce product descriptions that sell. Do you have any more tips or ideas to make product descriptions stand out? Do you have an example of great product descriptions that you would like to share? Let us know in the comments below!”6

— Looking to automate for of your marketing? Get an intro to what’s possible in this article – and check out our ecommerce consulting services for help. 

“Marketing automation is the process of using software to manage repetitive marketing tasks.”

Getting Started with Marketing Automation (for Ecommerce)
Anna Kayfitz Practical Ecommerce

“A marketing automation tool is typically a large investment. It can take time and money to set up. The staffing needs can be expensive. However, in my experience marketing automation can easily be worth the effort. It can decrease your marketing workload and greatly improve conversions.”7

  1. https://techcrunch.com/2018/07/18/prime-day-boosted-other-large-retailers-sales-by-54-says-report/
  2. https://ecommerce-platforms.com/articles/publicmarket-io-review
  3. https://www.abetterlemonadestand.com/pinterest-marketing/
  4. https://www.referralcandy.com/blog/niche-markets/
  5. https://techcrunch.com/2018/07/21/now-is-the-time-for-walmart-to-strike-at-amazon-prime/
  6. https://bootstrappingecommerce.com/persuasive-ecommerce-product-descriptions/
  7. https://www.practicalecommerce.com/getting-started-marketing-automation-ecommerce

Andrew @ EcomLoop
EcomLoop founder. I've worked in ecommerce since 2005, beginning with my own ebay store. I've run multiple independent ecommerce businesses on Magento, Joomla, and more recently, Shopify and WooCommerce. I believe marketplaces should be looked at as a sales channel and that all independent businesses should strive to build a direct connection with their audience for long-term success.

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