Among the most consequential recent changes, Khayman cited three in particular: Amazon delaying when sellers receive their money [DD+7], a 3.5% fuel and logistics-related [FBA] surcharge, and the ads payment change [now delayed to August 2026].
“If I go from $10 to $11.50 to offset my increase in costs, am I then going to be the most expensive option, or a more expensive option, and thus lose conversion rate on Amazon? Am I going to lose sales velocity? Am I going to lose ranking on the Amazon page?” Yale said. “The answer is probably yes.”
“Amazon has become, for me, sort of this whack-a-mole,” he said. “You solve one problem, another one pops up.” Tesoriero said he is increasingly focused on building outside Amazon.
Several Sellers in the piece are putting more effort into Shopify (own site) and TikTok Shop.
In a similar vein, I just finished up some coding and soldering to allow a Volvo owner to avoid the “Volvo App” subscription fee to monitor charging status of their plug-in hybrid Volvo as a favor to a friend.
The “subscription model” is a tax on people who want convenience, but aren’t technologically sophisticated, as there is always a way to throw a rasberry pi connected to an old cellphone at a problem, and replicate the feature, if one can speak fluent CANBUS, LINBUS, Flexray, et al, and one can also program right down to the bare iron.
I am reminded of the Album “Give Me Convenience or Give Me Death” by the Dead Kennedys, an obscure hard-core punk band of the 70s and 80s, which dates me as an “extinct fossil”.
Business Insider does an excellent job of reporting about dissatisfaction.
There is an endless well of it fed by the internet.
It would be interesting to take some of the sellers interviewed for this and other litanies of despair and bring them into a business school entrepreneurship class to review their business plan and performance. I am afraid, of how they would react when confronted with an analysis of their efforts and how their pain should have been expected.
The number of internet sellers who have been able to exceed the income to be expected from their business model has been larger than one might predict, and is decreasing.
I mean…maybe? But it was the Million Dollar Sellers group who organized and participated in the ad boycott earlier this month (mentioned in OP article) that resulted in Amazon pushing the policy to August.
It takes vetting, 2 interviews, and $7500/yr to be a member.
Not saying that you can’t earn “7 to 9 figures” and also be bad at business, but it’s not like an Amazon “guru” making a petition on Change-Org for their followers or a YouTube music video about Jeff Bezos or anything.
There’s plenty of bankrupt businesses that did millions or billions in revenue.
I still contend that if in order to get that revenue you “must” have ad spend be #3 in your expenses and can’t “lose” the 4% cash back, you’re not really succeeding. You’re on the cusp of failure.
Amazon “listened” this time because THEY would be losing millions in ad revenue if these companies stopped consuming their ad space.
I don’t disagree. But they are probably not still in the MDS club if that’s the case, if only because they can no longer fork over the $8k/yr membership dues.
All I’m saying is that the ad payment change awakened and mobilized a subset of Sellers who rarely get into the “I hate Amazon” minutiae, and that we can not assume that they are all (or even a majority) bad at business in the way @lake suggested.
Wait, where was ad spend claimed to be the 3rd top expense? Was that for every affected Seller? I missed it, I think.
From the article posted here, it sounded like it was the idea that Amazon was deciding for Sellers and changing a business procedure without enough warning and lead time–something we can all agree that Amazon does way more often than not.
It was from your OP story. It was the founder of that group’s words supposedly. He “knows” right? He’s not making any money from the people who pay $7500 to be in his “club” right? He’s not skimming, right? He’s just doing it for the good of the peeps, right?
A million dollars in revenue is not an impressive number from my perspective,
Back in the 1980’s and early 1990s my company which consisted of two employees reached $2 million in sales. We had gross margins of about 25% and were very frugal with our expenses,
By the time we pulled the plug on the company, our revenues were as high, but our gross margins had fallen to 8%, We could never grow the revenue enough to adapt to those rotten margins, so our money was better invested in someone else’s business.
Anecdotal information, I have seen, suggests that 8% is not an uncommon gross margin for many of Amazon’s high volume sellers. And a lot of other retailers. Costco gross margins are in that area, and their profits are driven by membership fees. Amazon retail’s gross margins are similar.
I have no dog in the MDS fight other than that they are not the usual complaining/activist Sellers we see calling for or organizing group action against Amazon.
I am fascinated by Sellers paying $8k/yr for a forum, though!
But to clarify: No Seller actually claimed that advertising on Amazon is their 3rd largest expense.
Wait, where was ad spend claimed to be the 3rd top expense? Was that for every affected Seller? I missed it, I think.
