The E-commerce Leader

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[00:00:00] JM: We have lawyers for all of this stuff. That would really as a little marketplace seller. That would really stink to your question. Amazon’s not really the marketplace competitor that we’ve ever cared about because they don’t do what we do.
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[00:01:56] JM: , it’s a really interesting perspective that the, this FTC interaction is, is in essence. Big part of it is focused on helping small businesses versus large businesses. And you’re right, that’s certainly seems different than helping consumers or, or making sure consumers aren’t harmed.
[00:02:15] I think the part of the rub here is just that all of us as, as e commerce operators, when we get into the business, have to decide who we’re going to partner with. And, and some of us are only oriented to like, learning to sell on Amazon is the only thing we heard of. I, that wasn’t my experience.
[00:02:32] My experience was I learned to sell on eBay originally. And so Amazon was always sort of a foreign object to us. but I think it’s really interesting to think through for all of us, who are we partnering with? We have to partner with a core set of providers to do e commerce online. Obviously in the olden days, I used WordPress and hated it.
[00:02:54] I mean, with a passion, they were like the, it was like the worst set of tools ever. Shopify came along and made magic happen for us. And Shopify has been a wonderful, resource to, to partner with, to sell online. The Amazon sellers are in the same exact situation. And, they know that they know that there’s a whole set of benefits.
[00:03:16] and a whole set of risks. and and if they’re naive to that, they learn it pretty quick as soon as they get into a forum or, go to a conference or start talking to other sellers. everybody who operates in that system becomes aware of the risks. and I, I think that’s just. It’s part of being a wise business owners to say, what is the risk reward calculus?
[00:03:37] where can I find advantage and where am I putting myself in jeopardy? and we all have to navigate through that. even if it’s known that Amazon does do the third party data review and then start selling things for in first party, even if that’s part of the game, that’s just a risk reward.
[00:03:55] equation that you’re working on. If you sell in that marketplace, I mean, it’s not even necessarily a, it’s like, that’s not even a reason. It’s not sell there necessarily. it’s a, it’s a risk that you’re running. And, and I think that’s, the government can’t, the government can’t like protect you from risk reward analysis for small business owners.
[00:04:16] there are other options besides Amazon for selling online and, so I, I just, to me, part of this comes down to, I, I’m not sure I see the, the wisdom in a lot of the, the, the case, the FTC case. If I’m being honest, I do think there, I do think there are other better things to pick on.
[00:04:36] and, but, but I think the free, like the, the marketplace of free competition is the best way to get at better solutions, so,
[00:04:45] MV: , I’m not necessarily here to defend the FTC or to criticize it really, I mean, I think it’s a reality is a sort of second or third order reality, which will have a big impact, though, I think it to your point that you made earlier. it may be that a bunch of regulation gets introduced that actually doesn’t benefit anyone except for Amazon or some other party that we had not even heard of.
[00:05:02] It suddenly springs up such as, other, other things came into existence. Google probably wouldn’t have existed. Microsoft hadn’t been broken up and so forth. Now, has that benefited everyone? Not necessarily. So, there are complicated things. I would say this though, if the FTC is serious about this and get some kind of action taken on, it’s worth knowing where they’re going because it probably will change Amazon’s response, even if they don’t lose the lawsuit.
[00:05:26] so the two things that are relevant to this, Amazon’s being accused of maintaining monopoly. through exclusionary anti discounting conduct that stifles price competition. Now, there are many mechanisms on Amazon, which I would say drive price lower, as we all know, as their body sectors or anybody who ventures onto Amazon.
[00:05:44] That said though, if you try and sell cheaper on your Shopify product, site or. anywhere else online that you have your products at a lower price than on Amazon, you’ll find that they tend to remove the buy box or suppress your visibility and search results. now, if somebody gets involved and tells Amazon not to do that, that doesn’t necessarily mean that consumers get lower prices, but I think it does actually.
[00:06:06] mean that it does change the game for the sellers. If you have a Shopify site and an Amazon site, for example. So I
[00:06:12] JM: So is that the, that’s the core issue is that issue of price parity across marketplaces
[00:06:20] MV: that’s one of the things I think that they’re talking about. Anti discounting conduct. I think that, one of
[00:06:24] JM: only thing that makes sense in my mind is because they don’t have any other, they want you to discount as much as you can on their platform. They don’t want you to discount on pets.
[00:06:32] com and. As compared to your pricing on Amazon. Sure. So is that
[00:06:38] MV: I,
[00:06:41] pressure? I don’t know. I, I, that’s something I’m happy to leave the lawyers to decide that. But what I’m interested in as a, as a seller in the compass operator is this, that if the FTC gets, gets the judge to agree or the jury or whoever, however it works, I’m not familiar with the ins and outs of the details of it, that it is counter competitive whether or not it is, is a different question.
[00:07:03] And they stop Amazon from removing the buy box from you or suppressing your listing if you sell cheaper somewhere other than Amazon.
[00:07:10] JM: sorry, but to be technical about it, it’s not anti discounting. It’s anti. Differentiated pricing. You can have as big a discount as you want. They just want you to be consistent from pets.com, walmart.com, amazon.com, so that there isn’t, so that there isn’t, exposure, on, on market share on their side.
[00:07:35] So you can go as low as you want, sell your things for 10 cents. They don’t care. They just don’t want you to sell it for 10 cents on pets.com and sell it for $15 on Amazon. So that makes. I mean, I get that’s not, I don’t know. That’s it’s not really anti discounting and it’s not really hurting the third party sellers.
[00:07:55] It’s requiring third party sellers to be consistent. Now, what I did see happen with a client of ours, this might be an interesting story is, I won’t say the brand or the details, but there were, they were selling on several marketplaces. one of the marketplaces would without the third party sellers consent.
[00:08:14] Put the items on sale because they had, I guess, that in their TOS that they could do like they could run sales across their system. So they would lower the price on this third party sellers product and that would flag Amazon and Amazon would get in its loop of, The negative feedback and consequence, and then, but, and so the, this third party seller would go back to the, the, the originating marketplace that caused this problem and say, stop that.
[00:08:42] You’re getting me in trouble with Amazon and they wouldn’t stop it. And so then she had to basically withdraw from that marketplace. It was really interesting story. Now I could see how. If you’re governing all marketplaces, you would say that, that’s quite a squabble between those 2 marketplaces. I mean, the 1 is obviously trying to make a sales occur and when share of wallet on the, in the online selling space for its [00:09:10] products by doing discounting, and beat it and beat Amazon, , that, that’s, that’s a pretty obscure use case, but, is that the place for the government to be involved? I mean, ultimately what happened was that person did stop selling on that rival marketplace and stuck with Amazon. so is there, is there a lawsuit in the makings there? Maybe. I, it is an interesting situation, isn’t it?
[00:09:38] MV: Well, I think the lawsuit is being made and is being delivered. Now, the question of whether it should happen or not is a political question. And look, I’m not even American. So I have no say in a democracy in what happens in American politics or law. what I think is relevant, though, is somebody who does sell in America and has done and advises people who do so.
[00:09:57] Is, the implications for us guys. So it is the job of a regulator possibly to consider other marketplaces other than Amazon and have what percentage of e commerce market they have. as a person who uses marketplaces rather than runs them, of course, you run a marketplace yourselves at a pixie fair, of course, but that’s a somewhat different question.
[00:10:14] So again, I think that the consumers, the. e commerce operators and marketplace owners and operators are three very different sets of people who are affected in three very different sets of ways. And I think the, my gut instinct overall is that Amazon treats the consumers like, the absolute gods and generally has delivered lower prices, faster delivery and greater selection to consumers.
[00:10:37] And to attack that is going to be a bit of a hard sell to the general public, me included. I do think
[00:10:42] JM: Well, you can,
[00:10:43] MV: third party sellers really badly, even though they have a lot of other options and they don’t have many other options. And I don’t feel too sorry for the other marketplaces, but there’s a fair point that maybe you need some competition.
[00:10:53] So that’s more abstract angle, isn’t it? So I think that the effects on these different parts, different constituencies, if you will, are really, really different. .
[00:11:02] Do you feel as a marketplace owner yourself, for example, at Pixie Fair, do you feel that, Amazon or anyone else is competing with you in an unfail way or is that not relevant to your lives?
[00:11:14] JM: it is relevant to us and , actually, as it happens, this, it is top of mind. A lot of this 1st party 3rd party seller dynamic. We navigate and manage on pixie fare. We’re like, Incredibly tiny, obviously, compared to the large e commerce marketplaces that people would know of. But in our case, we’ve done over 5 million transactions.
[00:11:37] we represent about 125 brands in totality. I think 19 of those are 17 of those are ours. Now, because we’ve been buying brands basically as people wanted to retire or stop working or just wanted to be done, we would basically buy their catalogs. and so, this is relevant. I would say that if the FTC makes a huge set of rules around marketplaces that.
[00:12:04] Damages me to have to, kind of comply with and Amazon’s happily like, that’s fine. We have lawyers for all of this stuff. That would really as a little marketplace seller. That would really stink to your question. Amazon’s not really the marketplace competitor that we’ve ever cared about because they don’t do what we do.
[00:12:23] Etsy is the marketplace that does what we do, and it is our most relevant competitor. and so do they do anything that’s unfair? Well, their core offer for, digital goods basically is that they don’t take hardly any. margin, out of the sale, except for transaction fees. Now, depending on how you sell and you do the math, I think that’s about 17 percent of the total sale, that comes out.
[00:12:51] we have a royalty payment structure and pixie fare. And so ours is different than that. more like a book publishing kind of arrangement. So, but Etsy is the, have they done anything wrong? No, they’re just huge. they just have the economies of scale and they, they can run. . seller fees at a super low transaction cost, and make it up in volume.
[00:13:10] But I would say this, they operate a completely open marketplace where, for example, and I apologize, this is in the little nitpicky details of a small niche, but I’ll just I think it’ll make sense to everybody. You can publish anything you want on Etsy as a digital. Good. It’s like a sewing document instruction on pixie.
[00:13:30] Fair. We have a whole set of guidelines and standards. And one of the guidelines is it has to be creative original work. In other words, you can’t just copy somebody’s idea and publish it. And that is a huge point of tension. And it is a very hard hurdle that we manage with a whole committee of people who look like a publishing committee that look at everything we put on our site.
[00:13:52] Etsy has no such requirement. So, it’s, it’s, a different system. We see the merit in our system and we see that our system honors. Original creative works. but does that matter to our 3rd party sellers? it’s like some someone to just publish what they want to publish. sometimes it feels good to them and sometimes it feels bad to them.
[00:14:15] and so it is a very different system that we’re running. But, but , I have skin in the game on this whole issue for sure.
[00:14:23] MV: I mean, I think what’s interesting as well is not so much to worry about whether the FTC should or shouldn’t do it. That’s a question for you to vote with your politicians or bug your congressman or woman about, I suppose, if you’re in America and I’m not. So I don’t have that sort of active view of the politics, but what’s very interesting to me is there are other Marketplaces where one can sell,digital or physical goods.
[00:14:44] And some of them are not the obvious competitors like Etsy, eBay, but the Facebook marketplace and Tik Tok is becoming a place that’s really growing in that place. And it would be quite interesting if the FTC not hobbles but reigns in Amazon or makes it harder for Amazon to operate in its current way, whether that will make space for Facebook marketplace, Tik Tok e commerce, or something else to, to blow up.
[00:15:07] whether that’s going to be good or bad for third party sellers. I mean, I don’t work for Facebook or Amazon or tick tock, so I don’t really care whether they get the share or not. But, what are your thoughts on that? Do you, do you think that would change the, change the landscape in a positive way for sellers?
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[00:16:10] JM: I do think that there are more and more e commerce selling, options available for people. Obviously, there’s a huge rise of the apps, especially in the fashion space and, reselling, clothing and handbags and all that kind of thing. There’s tons of opportunities there. I was very interested when facebook marketplace started to emerge and become more used.
[00:16:31] I got to be honest. I look at craigslist and facebook marketplace. . And offer up, every day, every, maybe, maybe five times a week, each of them. Cause I’m always just interested to see what’s on those marketplaces. Now that’s very, very different, e commerce than what Amazon offers. I mean, it’s, it’s just a whole different category.
[00:16:55] it’s more like local commerce. Enabled by tech, but I am very interested in those and to the extent that Facebook, for example, could enhance and improve and continue to expand, the marketplace, experience and really put tools and sophistication around that, that certainly could be a viable, place to sell.
[00:17:15] And it already is for many people, depending on your. Niche that you operate in, but most of the time those are equivalents to sort of garage sale, one time sellers, it’s where to get rid of your used car or your, patio furniture you want to get rid of. It’s more like, local Craigslist.
[00:17:29] Equivalence,
[00:17:30] MV: , that’s very interesting. So in other words, There are very different approaches to e commerce anyway, so locality matters. And I guess also the social media aspect is that we, we talked a while ago about sort of social selling on Amazon and everyone using TikTok like videos to sell. And then it’s gone quite quiet on that front, whereas people are using TikTok videos to drive sales to Amazon.
[00:17:50] And I wonder if a certain percentage of those will stay on TikTok. But as you
[00:17:54] JM: somebody told me the other day that, , somebody told me the other day that tick tocks publishing its own new sales system channel where you have your own shop and, and it’ll basically, disintermediate more that whole process. So that’s interesting. So I don’t think tick tocks, gonna stop leaning in to.
[00:18:13] that whole issue of influencers who can move product and making tools and resources available to them to make that more,[00:18:20] integrated on their side. And less dependent on sort of maybe the resources and tools of the Amazon experience. I think that’s very interesting. So, it’s certainly a competitive space in that regard with all of these players.
[00:18:33] Facebook is no slouch in that regard either in terms of marketplace. So, it’ll be interesting to see how they all ricochet off each other and find new ways for people to sell products,
[00:18:44] MV: , it will be interesting to me if Amazon gets somewhat hobbled or tied up in legislation or even just in the lawsuits, whether that ends up giving a bit more space in the e commerce market as a whole to someone like TikTok. And as you said, that disintermediation, there’s always that economic. The basic economics 101, more free market economics, if you like, that says, if you can disintermediate, I take the middleman out, you can pass on the profits, or, you make more profit as a company or you, you, lower the price with consumers.
[00:19:15] And so there is a, an economic logic anyway. So if that gets accelerated by a bit of legal hobbling of Amazon, that doesn’t apply to tick tock, that could all go that way, of course. TikTok is owned by, ByteDance, which is a U S a Chinese company. So it could be that TikTok just goes away, but I’ll just flag that up again.
[00:19:30] I mean, China and the U S are on a bit of a collision course, and that was really quite a real possibility. It seems a couple of years ago, and then nobody’s talking about it now, which is interesting to me. So
[00:19:41] JM: the
[00:19:41] MV: there’s always interesting legal threats on there.
[00:19:42] JM: the other, , the other vector of interest for sellers online right now is how YouTube could be expanded to actually have more integrated selling options. And so we do some of that with, with our, our products, pixie fair and on the YouTube channel, I think so, there’s, there’s angles there where there’s, there’s really interesting elements where if you have selling occur as close to the audience aggregation as possible.
[00:20:11] That’s sort of the gist, in the marketplace, right now, and that’s why TikTok and YouTube and Facebook all have that opportunity to, to lean into the transactional side of things because they have audience aggregation. and, and that is an existential threat to the Amazons or the Ebays, I’m like, if you’re a third party seller and you’re, and you have a huge audience on YouTube and you could do the whole thing through YouTube tools. Why wouldn’t you? I mean, it’s like, like nobody’s beholden to anybody’s, like system or tools, like if you can get it done in a different and better way, why, why wouldn’t you? And so, I do think this interesting future ahead for all of it, I think the winners in all of this in a way are the third party sellers, the e commerce operators, and that shouldn’t be lost in the mix here.
[00:21:02] We’re not the victims. We, we, as third party sellers, we’re being offered an ever increasing bounty of free or cheap tools that enable us to put our stuff out into the world and, make sales. And so, I don’t see, I don’t see us as victims. I see us as a. Winners of a huge, investment into the systems and tools that make e commerce happen.
[00:21:28] And that’s exciting to me. That’s that’s the fun part of the future is all the opportunity spaces that are opening up. American optimism right there, buddy.
[00:21:38] MV: I was just about to say this is a proper cap on a very American legal story with some American entrepreneurial optimism. So I don’t want to mess with the spirit of that. I like that thought. And I think you’re right. I mean, just a final sort of, I suppose, more of a. British sober reflection on that. I think if you’ve wedded yourself to any system and the system changes in a way that doesn’t favor you, then obviously you feel bad about it.
[00:22:00] And I guess the answer is to, as you said, you’re going to get married to look carefully, choosing the devil you dance with, but then also dance with more than one devil. They’re all devils in their way. Google can give you the panda slap or whatever it is next. YouTube shuts accounts down every five seconds as for Facebook does as well.
[00:22:16] It seems particularly advertising ones and Amazon. Can either charge you through the nose for your advertising or suspend your account. That’s actually less common, I think, than a Facebook suspension. So they all have their problems, but as you say, also, there’s also tons of opportunity and I suppose that, you just have to make sure you’ve got more than one iron in the fire to coin a phrase.
[00:22:36] JM: . Good thoughts. All right, buddy. Well, wonderful conversation. We should probably wrap it up there. so if you’ve enjoyed this conversation, we would love to have you leave your highest and best review wherever you’re listening. And, Michael, how can people get ahold of you if they’d like to go deeper and talk to you about their specific business situation?
[00:22:52] MV: so you can get an audit on your Amazon account. I can’t tell you what the FTC is going to do, but I can look at your Amazon account in the current sort of climate and rules, which is over at www. myamazonaudit. com.
[00:23:05] JM: Nice. And as always, for things related to my coaching and consulting work and are done for you services, omni rocket dot com is the place to go. So thanks everybody for listening today. Hope you have a wonderful rest of your day.
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