Following anti-trust investigations into Amazon by the Department of Justice and Federal Trade Commission, Amazon sellers are sharing grievances around the e-commerce giant’s unfair practices. Citing Amazon’s greater access to seller data, complaints allege that the platform uses their access to sales data to compete with bestselling third-party products, which currently make up $307 billion of Amazon’s $1.1 trillion enterprise value (58% of all items sold). Also listed in complaints against the platform is Amazon’s lack of notice when suspending sellers.
Elsewhere in e-commerce news this week, Amazon unveiled the opening of its largest ever campus in India, after earlier this year scrapping new headquarters in New York and Virginia. This new campus will cover 9.6 acres, cost the e-commerce giant “hundreds of millions of dollars” and will serve as a hub for over 15,000 employees as part of a larger expansion strategy in India. Jeff Bezos has this year pledged $5 billion into expansion in the region to combat competition Flipkart, and the campus comes just as Amazon added an Amazon Fresh store with two-hour delivery in Bengaluru.
The digital marketing world this week saw Google release its new Maximum Conversion Value smart bidding strategy for all ad campaigns. This option will offer insights to marketers as to whether their campaign is spending less than the daily pre-set budget, and will use historical campaign data to suggest an “optimal CPC bid” at the time of action. While more rules around maximum conversion value will be released in the coming week, Google has already specified that marketers will need to be utilizing transaction-specific values or have established conversion values via the “tools” page.
New in FE exclusive listings this week we have a highly-popular lead generation business in the Rehabilitation & Self Help niche listed at the $857K price point. This high-quality and informative resource has been able to generate steady traffic with over 230,000 visitors in the LTM. The site ranks for c.6,500 keywords, including ranking first for numerous high-volume terms, supporting its strong brand and organic search presence. With rapid revenue growth of c.517.3% for the period 2018 to (e) 2019, a new owner will be well-positioned to expand into new growth channels. Please follow the link above to request a prospectus.
In events news this week, the FE team had a great time at SaaStock Local in San Francisco this past Wednesday, where Founder Thomas Smale and some of the M&A team joined other leading founders in a discussion around Churnbusting and how to overcome roadblocks to growth in business. Next week on August 29 Thomas will be attending SaaStr Scale in San Francisco to stay up to date on the top trends in sales, marketing and customer success. If you will be attending either event and want to connect, feel free to reply to this email to set up a meeting.
Continue reading below for more on Amazon Seller grievances, Amazon India and Google campaign updates.
- High-quality and informative resource in the rehabilitation niche.
- Steady traffic with over 230,000 visitors in the LTM.
- Strong organic search presence with rankings for 6,500 keywords and a robust backlink profile.
- Rapid revenue growth of c.517.3% for the period 2018 to (e) 2019.
- High payouts per lead, with average commissions per lead of c.$150 in the LTM
Yearly net profit: $422,000
Asking price: $857,000
- Growing foothold in the multi-billion dollar health and fitness niche
- Hundreds of informative articles helping secure rankings for c.146,000 keywords
- Impressive revenue CMGR of c.11.9% over the last 12 months
- Simple operations with lean costs allowing for high net margins and growing cash flows
Yearly net profit: $218,000
Asking price: $655,000
- Vast content library with over 200 articles covering a diverse product range
- Steady traffic with over 774,000 visitors over the L12M
- Keyword rankings for c.34,000 keywords
- Lean cost structure driving high net margins
Yearly net profit: $56,000
Asking price: $139,000
- Reputable brand with seven years of operational history
- Over 12 million visitors and 19 million page views in the past year
- Hundreds of articles published from authoritative government sources
- Dominant social media presence with over 1 million Facebook followers
Yearly net profit: $270,000
Asking price: $716,000
- Nearly a decade of operational history, allowing for a well-known and reputable brand
- Dominant SEO presence with keyword rankings for c.28,000 keywords and numerous backlinks from reputable sources
- Steady investment into content with thousands of articles published to-date
- Large social following with hundreds of thousands of social media followers
- Freelance writers staying on post-sale
Yearly net profit: $208,000
Asking price: $698,000
In the News…
Amazon Sellers Leverage Complaints
This summer, the DOJ and FTC began probing into Amazon after reports of anti-trust violations. Third-party sellers make up a large majority of Amazon’s enterprise value. The $307 billion business beats out Amazon’s first party business which only brings in only $93 billion of the company’s $1.1 trillion value. Amazon’s questionable marketplace is being investigated as sellers report the trillion-dollar business uses their sales data against them by producing similar versions of popular products as well as canceling or suspending accounts with little notice.
The consequences of these practices become more severe as third-party businesses continue to grow into established, high-earning companies. According to Chris McCabe, an independent consultant helping Amazon sellers and former Amazon employee, told Business Insider why sellers are struggling to find security under the thumb of the e-commerce giant. McCabe explains how negative feedback from buyers could result in a sudden suspension of the seller’s account, without much vetting of the complaint. Amazon has also abused access to seller data, one business reported to Bloomberg that Amazon created a similar version of their popular laptop and sold it at a fraction of the price. Sellers are hoping measures will be put in place to protect them from exploitation.
Amazon Launches India Campus
The largest Amazon office in the world has just opened its doors in Hyderabad, India. At a cost of “hundreds of millions of dollars” the new campus covers 9.5 acres of the southern Indian city and will employ 15,000 of the 62,000 Amazon workers in India. The development further contributes to the company’s global expansion of services and facilities as India is amazon’s “last major growth market.”
In competition with the e-commerce authority is Walmart e-commerce business, Flipkart. To prevent Flipkart from encroaching as a threat, Amazon founder, Jeff Bezos has dedicated $5 billion into developing and expanding operations in India. One such addition is the newly introduced Amazon Fresh store located in Bengaluru, offering 2-hour delivery on Amazon.in for Prime members.
Google Releases Maximum Conversion Value
Available now, Google has introduced a new smart bidding strategy for marketers. The new addition is an add on to the maximize conversions bidding strategy released in 2017 and will now include maximize conversion value. Manual bidding is still available, but with more and more advertisers using automated bidding for their online campaigns, marketers will be able to automatically generate the greatest conversion value within their budget.
The smart bidding strategy utilizes historical campaign data as well as contextual searcher information to generate an “optimal CPC bid” at auction. Maximize conversion value is only available to those using transaction specific values or those who have set conversion values for the conversion types they’re seeking to optimize. Google’s latest addition is helping marketers get the most out of their campaign budgets.