Amazon suddenly makes a big move, sellers here we go again!

Amazon's big move, sellers brace yourselves!

Finally, in the first quarter financial report, Amazon showed significant results in cost reduction and efficiency improvement, reversing the serious loss situation of last year.

In addition, Amazon suddenly made the product browsing volume public, which caused concerns among sellers that the price war on the platform will intensify. It can be seen that Amazon sellers are going to be busy again.

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Amazon announced Q1 2023 financial report

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Cost reduction and efficiency improvement are the key

Recently, Amazon released its first quarter financial report for 2023. The report shows that Amazon’s performance in this quarter exceeded expectations.

This year, Amazon’s net sales in the first quarter were US$127.358 billion, an increase of 9% compared to US$116.444 billion in the same period last year; net profit was US$3.172 billion, achieving a turnaround compared to a net loss of US$3.844 billion in the same period last year.

Among them, the Amazon North America department (United States, Canada) that sellers are concerned about had a net sales of US$76.881 billion in the first quarter of this year, an 11% increase compared to US$69.244 billion in the same period last year; operating profit was US$898 million, and the operating loss in the same period last year was US$1.568 billion. The growth in the North American market exceeds the company’s average, and sellers can be more confident.

It is worth noting that Amazon’s online sales growth continued to slow down, increasing by only 3% to reach US$51.1 billion; but the sales of physical stores surged by 7% to US$4.9 billion. This means that as consumers return to physical stores to shop, e-commerce business is under certain impact.

Looking back at the past quarter, cost reduction and efficiency improvement can be said to be the development theme of Amazon, which is also the key measure for its performance to exceed expectations.

In March of this year, Amazon announced that it would further lay off 9,000 employees. Earlier this year, Amazon had already laid off 18,000 employees out of a total of 1.54 million job positions. According to statistics, Amazon’s workforce has decreased by 10% to 1.47 million people.

In addition to layoffs, restructuring or closing businesses is also an inevitable measure to reduce costs and increase efficiency. Previously, Amazon cancelled plans to expand some warehouses and suspended its Phase 2 headquarters project in the back of Virginia. Amazon has also closed unprofitable businesses such as Amazon Fresh and unmanned convenience store Amazon Go.

Data shows that Amazon’s operating expenses in the first quarter increased slightly less than 9%, the lowest growth rate in nearly a decade. In addition, Amazon has raised fees for various services for sellers multiple times and raised Prime membership fees on multiple sites. In the first quarter, third-party seller service revenue increased by 20%, with about 26 million consumers ordering same-day delivery goods, a 50% increase from last year.

On one hand, Amazon is shrinking its internal business, while on the other hand, it is transferring cost pressures. Under such large-scale cost reduction and efficiency improvement measures, Amazon’s performance exceeding expectations is also reasonable.

However, due to the macroeconomic uncertainty, Amazon still maintains a cautious attitude towards the performance expectations for the next quarter. Amazon predicts that in the second quarter of the 2023 fiscal year, the company’s sales will be between $127 billion and $133 billion, and revenue will be between $2 billion and $5.5 billion.

As consumers continue to reduce discretionary spending and turn to buying low-priced goods, Amazon will face many challenges in the days to come.

For sellers, if the growth rate of online sales continues to slow down, the impact on sellers may be even greater. Therefore, sellers need to constantly adjust their business strategies and seek new development points.

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Amazon Front Desk Public Product View

Competition among sellers is increasingly fierce

Sellers are already struggling, and Amazon is still adding fuel to the fire. Recently, some sellers have discovered that Amazon has publicly released a new piece of data on the front desk: product views.

This is also a big move by Amazon after showing product sales and labeling products with high return rates. By thoroughly exposing the basic information of goods to consumers, are sellers worried or not?

According to sellers, the front desk currently publicly displays both the product’s view and sales, but sales are no longer publicized with views.

Many sellers believe that the data currently provided by Amazon is not entirely accurate.

Because some sellers speculate that the products displayed on Amazon that show sales are products with relatively considerable sales in the past week/month, and products with lower sales (such as below 50) are not displayed at all. Now, perhaps to add some interest to low-selling products, the front desk displays views, after all, a product with several hundred or several thousand views is not too unusual among a group of high-selling similar products.

However, in the eyes of consumers, whether the data is accurate or not, the likelihood of choosing products with higher views is definitely greater than that of products with lower views, especially when the data between the two products differs greatly, this differentiation phenomenon will be more obvious. When the product data is not significantly different, price and the product itself are more likely to directly affect the consumer’s choice.

In mid-last month, Amazon began displaying sales data from the past period on the front end. Now, they have also displayed the browsing volume of products from the past month. These publicly available data will inevitably raise higher requirements for the fine operation of sellers.

Sellers need to pay more attention to their data and make corresponding adjustments and optimizations in a timely manner. Some sellers are also worried that Amazon’s changes may give birth to a group of professional data brushers, which is likely to exacerbate the trend of brushing orders.

Frankly speaking, if you want to operate compliantly and obtain high product browsing volume, sellers certainly need to put more effort into the product page. Of course, just attaching importance to browsing volume and other data deviates from the initial intention of operation, and high conversion rate is the key point that sellers should pay attention to.

▪ Final words

Whether it is labeling with high return rates or publicly displaying product sales and recent browsing volume, Amazon’s goal is consistent, which is to improve platform competitiveness while optimizing customer experience by clearing out poor-performing products. For Amazon sellers, the platform’s test will become more and more strict. Only by doing a good job in products and serving users well can they win better development.

However, no matter what, Amazon’s consecutive actions in recent months are enough to prove the platform’s determination to change the status quo.

In addition, Amazon’s sudden release of product browsing volume on the front end has caused sellers to worry that price wars on the platform will intensify. It can be seen that Amazon sellers are going to be busy again.

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Amazon Releases Q1 2023 Financial Report

Cost Reduction and Efficiency Improvement Are Key

Recently, Amazon released its financial report for the first quarter of 2023. The report showed that Amazon’s performance in this quarter exceeded expectations.

This year, Amazon’s net sales in the first quarter were US$127.358 billion, an increase of 9% compared to US$116.444 billion in the same period last year; net profit was US$3.172 billion, compared to a net loss of US$3.844 billion in the same period last year, achieving a turnaround.

Among them, the Amazon North America department (the United States and Canada) that sellers are concerned about had a net sales of US$76.881 billion in the first quarter of this year, an increase of 11% compared to US$69.244 billion in the same period last year; operating profit was US$898 million, and the operating loss in the same period last year was US$1.568 billion. The growth in the North American market exceeded the company’s average, giving sellers greater confidence.

It is worth noting that Amazon’s online sales growth continued to slow down, increasing by only 3% to US$51.1 billion; but physical store sales surged by 7% to US$4.9 billion. This means that as consumers return to physical stores for shopping, e-commerce businesses are experiencing some impact.

Looking back at the past quarter, cost reduction and efficiency improvement can be said to be the development theme of Amazon, which is also the key measure for its performance to exceed expectations.

In March of this year, Amazon announced that it would further lay off 9,000 people. Earlier this year, Amazon had already laid off 18,000 employees out of more than 1.54 million job positions. According to statistics, Amazon’s employee count has dropped by 10% to 1.47 million people.

Aside from layoffs, restructuring or closing businesses is also an inevitable measure to reduce costs and increase efficiency. Previously, Amazon canceled expansion plans for some warehouses and suspended the second phase of its headquarters project located in the back of Virginia. Additionally, Amazon has closed unprofitable businesses such as Amazon Fresh and the unmanned convenience store Amazon Go.

According to data, Amazon’s operating expenses in the first quarter grew slightly less than 9%, the lowest growth rate in nearly a decade. Along with multiple increases in seller service fees and Prime membership fees on multiple sites, third-party seller service revenue in the first quarter increased by 20%, and about 26 million consumers ordered same-day delivery items, a 50% increase from last year.

On one hand, Amazon is shrinking its internal businesses, while on the other hand, it is transferring cost pressures. Given such a large-scale cost-cutting measure, Amazon’s performance exceeding expectations is also reasonable.

However, based on the uncertainty in the macro economy, Amazon remains cautious about its performance expectations for the next quarter. Amazon predicts that in the second quarter of fiscal year 2023, the company’s sales will be between 127 billion US dollars and 133 billion US dollars, and revenue will be between 2 billion US dollars and 5.5 billion US dollars.

As consumers continue to reduce discretionary spending and turn to buying low-priced goods, Amazon will face many challenges in the coming days.

Similarly, for sellers, if the growth rate of online sales continues to slow down, the impact on the sellers may be even greater. Therefore, sellers need to continuously adjust their business strategies and seek new development points.

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Amazon publicly displays product browsing volume on the front end

Sellers face increasingly fierce competition

Selling on Amazon was already difficult enough, but now Amazon is making it even harder for them. Recently, some sellers have discovered that Amazon has publicly released a new piece of data on the front page: product page views.

This is another move by Amazon after displaying product sales and high return rate labels for products. By completely exposing the basic information of products to consumers, do you think sellers are panicking?

According to sellers, the front page currently displays both product page views and sales, but sales will no longer be displayed if page views are displayed.

Many sellers believe that the data currently provided by Amazon is not entirely accurate.

Some sellers speculate that the sales displayed on Amazon are for products with relatively high sales in the past week/month, and products with lower sales (such as less than 50) are not displayed at all. Now, perhaps to add some interest to low-selling products, the front page displays their page views. After all, with a label of several hundred or several thousand page views, the product is not too different from others with high sales.

However, in the eyes of consumers, regardless of whether the data is accurate or not, they are more likely to choose products with higher page views than those with lower page views, especially when the difference between the two is significant within the same product category. When the product data is not significantly different, price and the product itself are more likely to directly affect consumer choice.

In mid-last month, Amazon began displaying sales data from the past period on the front page. Now, they are also showing product page views from the past month. These various pieces of publicly available data will inevitably raise higher requirements for sellers’ precision operations.

Sellers need to pay more attention to their data and make timely adjustments and optimizations. Some sellers are also concerned that Amazon’s changes may give rise to a group of professional data brushing service providers, which is likely to exacerbate the trend of brushing orders.

To be honest, in order to operate compliantly and obtain high product page views, sellers definitely need to put more effort into the product page. Of course, focusing too much on data such as page views deviates from the original intention of operation. High conversion rates are the key areas that sellers should focus on.

▪ Final words

Whether it is labeling high return rates or publicly displaying product sales and recent page views, Amazon’s goal is consistent, that is, to improve customer experience while clearing out poor-performing products to enhance platform competitiveness. For Amazon sellers, the platform’s test will become increasingly stringent. Only by doing a good job in product quality and serving customers well, can they win better development.

However, no matter what, Amazon’s successive actions in recent months are sufficient to prove the platform’s determination to change the status quo.

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