Amazon Profits are big enough to not have the company worry too much about some smaller unprofitable items? Apparently not! Amazon are hitting these vendors by killing off their PPC ads.
Sourced through Scoop.it from: gizmodo.com
Is there anyone out there that thinks Amazon does not make enough money? Well Amazon apparently! They are hitting vendors by killing off their ad’s for unprofitable items.
Amazon is looking at this creative way to boost it’s already huge profits. They are taking a swipe at vendors with unprofitable items and hitting them hard by killing off their Amazon PPC ad’s.
CNBC has seen emails that were forwarded to some Amazon vendors as well as some conversations from those involved in the matter.
As of Wednesday Amazon reached out to some of it’s sellers and politely informed them that will no longer be allowed to pay for promotion of certain products as they do not generate a profit for the e-commerce giant.
There is one particular email that CNBC has obtained informing some vendors that they must sell them at a lower cost to Amazon in order to continue trading them through the site.
An Amazon spokesperson has stated that the company decides on which products to advertise based on a variety of criteria including availability and profitability.
The company has said that this is not a new thing, however CNBC has said that Amazon as of yet has been unable to say how long this policy has been active.
It is one move of many by Amazon to boost its bottom line. The Wall Street Journal had reported last year that the company was taking aim at products it refers to as CRAP or (Can’t realize a profit). Nice!
According to the article as part of Amazon’s growth plan they pressure sellers to update a variety of attributes on products that are not selling as well. Things like changing price, usually lower to higher or changing packaging say from foil packaging to cheaper plastic packaging.
Another Amazon spokesperson informed Gizmodo that despite these reports their operations remained unchanged. Though he did concede that they reserve the right to stop selling items that are unprofitable over a period of time.
Amazon Prime Pantry seems to be the exception where known unprofitable products were made available in order to encourage participation. Sneaky!
Then there is the initiative to make its product packaging more attractive to their e-commerce customers. This has been around for years and has involved swap likes using shiny laminated packaging pouches instead of dull corrugated boxes.
Amazon PPC & Ad practices that have come to light this week have raised questions about how far the company will go to improve Amazon profits even when it is detrimental to smaller brands without the muscle of the E-commerce giant.
Is about time Washington stepped in?