Amazon Prime Day, France Passes Digital Tax and US Eases Ban on Huawei: Newsletter July 12, 2019

Amazon Prime Day 2019 will take place on July 15 and be the longest-ever Prime Day yet, running a full 48 hours. While Amazon hires up to 5,000 workers to help with increased orders ahead of the biggest shopping day of the season, JP Morgan predicts 2019 Prime Day sales could generate over $5 billion in sales for Amazon, up 56% from last year’s event.

Top Tip: Even without utilizing lightning deals, Prime Day can still prove profitable for Amazon store owners. Merchants without lightning deal-eligible products can still utilize an Amazon Coupon to tag their products with a discount label (this must be completed at least two days ahead of time). This will be visible to shoppers in search results, on product pages, on Amazon’s Coupons home page as well as other pages. Amazon sellers should use Prime Day as an opportunity to highlight strong performing products because they will be more visible, sell at higher volumes, increase sales ranking on the platform and are a better bet for generating repeat customers.

 

In entrepreneurial news this week, SaaS Mag has released a list of The Best Places to Get SaaS Funding in 2019, highlighting the top funds investing in SMB SaaS businesses. As public SaaS companies’ stocks continue to demonstrate the market’s appetite for the software as-a-service business model, the relatively new space of investment funds specifically targeting the sector is gaining significant traction. Head over to the SaaS Mag blog to read about some of the best funds SaaS founders, owners and operators should keep an eye on in the years ahead.

This week the world of digital policy saw the French government pass a digital services tax on multinational firms headquartered outside of France. Intended to counteract the lack of taxes levied against such companies’ digital services, the tax will charge 3% of sales generated in France by multinational digital firms, such as Google and Facebook. Digital companies of any niche or model with more than $850M (€750M) in revenues of which at least €25M is generated in France will be subject to this new tax, which will be applied retroactively from the beginning of 2019.

Elsewhere in international commerce relations, the United States has relaxed a recent ban which restricted US companies selling to Huawei. The Chinese tech giant was placed on the US Entities List in May 2019, meaning US companies would not be authorized to sell technology to Huawei without first receiving a government license. Now, while Huawei will remain on the Entities list, the licensing requirement has been relaxed to only include products related to national security, a win for many tech companies who have been lobbying to continue selling to Huawei since the ban was ordered.

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In events news, the FE team had a great time in Vietnam for Digital SEO Summit, where Founder Thomas Smale gave a talk on how content business owners can improve the value of their business to an audience of over 650. Later this month, the FE team will be attending SaaStock Local in London on July 23 at 6pm, so feel free to reach out if you will be in attendance and want to connect!

Continue reading below for more on Amazon Prime Day, the French digital services tax and the US ban on Huawei sales.

 

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In the News…

Amazon Prime Day 

Amazon Prime Day is around the corner, and merchants everywhere are making sure they are as prepared as possible for the biggest shopping day of the season.

While there is quite a bit of hype around driving sales from the sales event, there are several factors to consider when gearing up for the day. For deals which are eligible for the sales event, Amazon picks the best deals submitted and ranks them according to sales potential based on the best price, quantity, and stock. While many sellers will not be eligible to capitalize on lightning deals, there are other ways to take advantage of the heavy traffic on the platform that day. Adding a coupon to your top products, pushing the bestsellers, price-matching similar deals on your native website (if you have one) and advertising to your mailing list are just some of the ways sellers can partake in Prime Day.

With 2018 breaking all records for previous Prime Day sales volume, this year’s is expected to be one of the biggest shopping days in e-commerce history.

France Passes Tax on Digital Companies

This week France passed tax on digital services sales generated in the country despite the US threatening to retaliate under claims that the tax unfairly targets US companies.

The Financial Times reported that the US administration is investigating this move, and will determine whether to enact retaliatory tariffs. Robert Lighthizer, stated that, “The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.” The French finance ministry has stated that their tax is in compliance with international agreements and labeled retaliation via trade instruments as inappropriate.

The tax will affect around 30 companies, including Alphabet, Apple, Facebook, Amazon and one French company, Criteo.

US Eases Ban on Huawei

Following a recent announcement that US tech companies would be facing a ban from selling to Huawei, the US administration has given an update on the specifics of the ban.

The tech giant will remain on the US entities list, however only products relating to national security will be subject to the ban. Other products will still be allowed to be sold to Huawei upon receiving a government license. On the topic, the director of the White House National Economic Council, Larry Kudlow, stated that the US had “opened the door — relaxed a bit, the licensing requirements from the Commerce Department.” While the US government itself will not purchase Huawei parts, Reuters reported that non security critical components will be allowed. According to the Financial Times, Kudlow also noted that the requirements will only be relaxed “for a limited time period” which may mean the ban could be re-tightened if trade negotiations do not improve.

It is not yet entirely clear which technology products are classified as relating to national security concerns, and which do not.

For more updates throughout the week on the financial world of online business M&A, follow our team on Facebook, LinkedIn, Twitter, and Instagram