Low-profit products can’t even be advertised?! Amazon decided to do this…

Like domestic e-commerce platforms, with the influx of large-scale sellers, the price war on Amazon is becoming more and more intense. Domestic sellers continue to use lower prices to attract orders and defeat their competitors.

Of course, there are almost no winners in a price war. Sellers sell more but earn less, or even sell at a loss. Buyers only buy products with extremely compressed costs, and their quality and performance are worrying.

Although Amazon continues to emphasize brands and has more support and preferential policies for registered trademarks and brand sellers, the platform is still flooded with a large number of products with very low profit margins and quality, which greatly affects the experience of both buyers and sellers.

Amazon is also constantly making plans to eradicate this phenomenon. I have previously told you about Amazon’s new policy for screening low-profit sellers ( click here to review ).

But these new policies are long-term operations and have little effect on the current situation. However, this time Amazon has taken a tough approach.

Directly cut off the traffic entrance of low-profit products!

The news comes from foreign media reports

To further increase profitability, Amazon is actively discouraging low-margin products from being advertised.

Amazon's advertising business has become the fastest growing and most profitable business in the entire Amazon system. According to third-party data, Amazon's total advertising revenue doubled to $10.1 billion last year, and will continue to grow by more than 50% this year.

In such a good situation, why does Amazon want to suspend the advertising business of some sellers?

Emails received by sellers whose advertising services have been suspended

Amazon stated in the email that this product has caused losses to Amazon, and unless the seller can further reduce the cost of the product, it will ban advertising for this product.

Amazon has already begun to screen out sellers and suppliers with insufficient profitability, all in order to raise its profitability to a higher level . After all, it has boasted about its ability to make money in front of its brother-in-law and Wall Street tycoons.

Brother-in-law spoke at the Economic Club of Washington dinner.

We have to find a way to make the boast come true. Clearing out these low-profit products/sellers/suppliers is the first step. We have seen the earlier layout, including buyer satisfaction and new advertising policies. They are trying to restrict sellers with low profits and make them give way to high-profit sellers.

The restriction this time is obviously for the same reason. Driving unprofitable or even loss-making suppliers to the third-party market and charging them advertising, commissions, and logistics and warehousing fees is a sure-win business for my brother-in-law.

Amazon's dominance over sellers and suppliers is becoming increasingly stronger, and it can change policies and various review systems at will to force sellers to make various choices that are only beneficial to Amazon.

Without regulation by giant companies like this, sellers will always be in a passive state, at the mercy of Amazon. Just like the change in restricting advertising this time. Low-profit sellers have no room for negotiation or resistance, and must lower costs and increase profit margins in accordance with Amazon's requirements to restore their right to advertise.

Sellers can only hope that governments around the world will implement restrictive policies against tech giants. The government will restrict Amazon’s tyranny over us sellers, so that the rights of sellers can be guaranteed.

For those of you who still don’t know how to set prices to ensure profit margins, I have prepared a pricing calculation formula for your reference. Please scan the QR code to consult me.

PS. If you want to join the seller discussion group, you can also private message me to let me add you to the group

Source: Cross-border Business School

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