Do you currently run an Amazon FBA business? If you’re new to the market, it’s natural to be concerned about how Amazon is using the data from your business to make decisions about their own company. Of course this has the potential to impact your profit and your ability to sell your business in the near future.
The news was recently announced that Amazon has been collecting data from their third-party sellers, but very few third-party Amazon FBA sellers were actually surprised by this. This is a good opportunity for sellers to take a step back, think more about the data that’s being collected on their behalf and set in place plans to diversify their channels and focus on branding. This will not only help to protect you against some of the data that’s being collected by the Amazon company but will also help you position yourself as a valuable company available for sale.
The information about Amazon FBA’s seller data collection program was revealed by the Wall Street Journal from an investigation. The Amazon company has denied engaging in data collection practices and in May 2019 told reporters that they prohibit the use of individual sellers’ information. A platform spokesperson had previously gone on the record to say that the platform prohibits employees from using seller specific and non-public data to decide which of their own private label products they will launch. As a result of the Wall Street Journal’s publication, Amazon said it is completing an investigation.
Rumors about this data from third party sellers have been out in public sources since 2007, however. Some third-party sellers who spoke to journalists said that they were not surprised by this news, whatsoever. The primary issue with this collection of data has to do with the use of the term aggregate data. Amazon defines aggregate data as data about products that are offered by multiple sellers, according to the Wall Street Journal.
However, the assumption of many Amazon sellers was that aggregate data means sales across an entire market or product category. But Amazon might also be considering aggregate data to include the sales of those products that have multiple offers. Furthermore, the investigation produced by the Wall Street Journal claims that Amazon also looks at items sold by one seller in addition to those items sold through the Amazon warehouse.
Seller concerns have long been raised about the Amazon policy and some of them are thinking about how this will impact their business at a big level; looking to move to their own e-commerce platforms, if possible. If you are interested in selling or growing your Amazon FBA business, consider scheduling a consultation with our business brokers.