MGR Amazon Weekly Update | October 21, 2019
Top News This Week
Incumbent Consumer Brands Aren’t Growing, So They’re Buying Smaller Brands Left and Right
The large incumbent consumer brands have had all of their growth stolen by what they call “ankle-biting microbrands.” They can call it “ankle-biting” all they want, but we think it’s a complete knee-capping. Smaller emergent brands have been stealing market share from the big guys in every consumer category and they are starting to feel the pain, especially as their shareholders keep asking, “where did all the growth go?”
So what is the predominant response from the major brands? They’re going on a shopping spree.
The question is, what are they looking for and how do you position your company as the next hot acquisition target? These are the 3 keys.
1. High growth. Obviously this is their top priority, if they can’t generate growth for themselves they will need to acquire it.
2. Strong brand identity with a loyal audience. The major brands have to go after broad, massive audiences, but that means that their brand identity is loose and often lacks devout fans. Smaller brands go after more niche groups and are able to develop cult-like followings, something large brands are dying to have and willing to acquire.
3. A path towards strong cash flows. Even if you don’t have amazing cash flow right now (most smaller brands don’t), what matters is that you can show a clear path towards it, especially if you had the large brand’s deep pockets at your disposal. This means healthy gross margins and a brand/product that has pricing power.
Amazon Shady Sellers Are Using Facebook Messenger Ads to Get 5 Star Reviews
Every seller is fighting to up their star rating, but some are breaching Amazon’s TOS to do so. How? They create Facebook ads that do something like this: Advertise that they’re giving away units for free with Messenger ads, then telling people who click on it to buy the product from them on Amazon and to leave a 5 star review. Once they leave the review and the seller verifies it they give them a returnless refund.
Is this method clever? Yes. Will it get you banned from Amazon if you get caught? Absolutely. Examples like this and countless others are why Amazon has become so strict over recent years when it comes to reviews. Amazon wants their customers to be confident that when they read reviews that they are legitimate, but because sellers know how important having good reviews is, they often try to find ways to cheat the system.
Other Notable Links:
1. Want to be featured on Amazon’s top 100 holiday toys list? It could cost you up to $2 million – BLOOMBERG
2. Many Amazon sellers have been getting caught selling expired food – CNBC
3. Third party Alexa apps can listen to you even when you aren’t speaking to them, have been used to gather personal information on people without them knowing – ENGADGET
4. Snapchat keeps expanding it’s advertising options, now let’s ecommerce companies run dynamic ads – TECH CRUNCH