A blog on eCommerce, Social Commerce, Comparative Shopping Engines & Business

By Hendrik Laubscher

Search Results for: "Amazon"

Should Amazon be doing more regarding Tax Nexus in the US?

Let me start off by saying that I am not an accountant nor a financial professional but I believe that there is a story that has been developing that can impede Amazon’s dominance in the US. Amazon is a hybrid marketplace in the US as it is both a retailer and allows third parties to sell to their customers to ensure that they can be the “Everything Store” that has virtual shopping isles that has an infinite length.  Amazon has inadvertently created a situation in which sellers are generating sales to States without them knowing the location of their products due to them using Fulfillment by Amazon (FBA). As Amazon moves products to warehouses all over continental US these sellers are generating Tax Nexus in States that could lead to an increase in tax to certain States.

Amazon has been seen by many and a certain leader as not paying tax and thus negatively impact retailers in the US. Amazon has started collecting taxes in most states to ensure that they can build logistics facilities closer to customers in various US States.

According to CNBC, after 1 April, the only states in which Amazon won’t collect taxes are Alaska, Delaware, Oregon, Montana and New Hampshire. These five states don’t have sales levies.

Map of US State Sales Tax Collection


Amazon has over the years made it clear that they are not responsible for the products that are sold on their marketplace nor are they required to enforce the collection of sales tax by third party sellers.


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Why Amazon Prime Now Is Another Trojan Horse

Amazon has entered Singapore in a new fashion that should put new countries on alerts. As I wrote in my newsletter last night that this is potentially a very big future indicator. By using Prime Now Amazon is leveraging local assets (local logistics, staff) to enter Singapore.

This past week Amazon entered Singapore via their on demand mobile app, Prime Now.  Amazon has used this country as its market entry into South East Asia. Singapore is not large and thus quicker market entry has been possible. Amazon has used 2 Singapore born staff to go run this new market. By appearing in Appstores instead of via a website Amazon has shown their secretive nature but also how they are going to go into new markets in Asia. This past week should provide more than enough evidence of the future battle that is going to appear more and more, Alibaba vs Amazon. Both have significant capital and desire to enlarge their businesses.

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The week in News for Amazon (AMZN)

The week that ended was one that had the entire digital industry looking at a Seattle, Washington company. Amazon and its founder Jeff Bezos had quite a bit of ink, pixels devoted to them. There is such a lot to think about, it kinda lead to one post on the topic (The 10 stories post is going to be written as soon as this is done).

Washington Post

When I read about Bezos selling his stock, my attention got diverted into “I wonder what Bezos has in mind..” and then I got busy at work. When Bezos sells stock (which generally occurs very seldomly) generally it means cash is needed for something (normally an acquisition). The fact that he spent $250 million to buy the Washington Post and made it clear that the acquisition is in his private capacity for me are clues that this purchase was long time in the works. No-one saw this coming which communicates just how close Bezos keeps his cards to his chest

Why?

Bezos has bought the Washington Post to save a business that is facing extinction. The long term thinking that Bezos has shown will ensure that Washington Post survives. There are a few things that Bezos has shown me with this purchase:

  1. He loves content. May it be books, e-books or news, he has a love for knowledge. The Washington Post is another platform that creates thousands of words and articles per year. The need for news will always be a factor in newspaper’s long term future. You cant create algorithms for that – human editors and writers are needed.
  2. If an opportunity arises that leads to an acquisition – Bezos will take the chance but it will be on his terms. There is a reason why he purchased one of the most historical newspapers in the US. It may be influence, the opportunity to change the newspaper industry, potentially have another business that he can leverage to provide sales to his day job (Amazon.com) – may it be a Kindle etc.
  3. The Washington Post provides another data set for Amazon to potentially incorporate into their algorithms. (I wonder if the Washington Post will be seen on Google news when the sale completes?)
  4. The Washington Post is Bezos second news related investment. Earlier in the year, Bezos invested in Business Insider.

The Washington Post under Bezos’s ownership is going to be something worth keeping an eye on.

Amazon – The Art Gallery

Amazon has also announced that is selling art. Needless to say this news will concern art gallery owners. It is becoming clear that Amazon wants to be the “Walmart of the web”. Being able to buy whatever you need, Amazon is to be your starting point towards a purchase.

Amazon.com, Inc. today announced the launch of Amazon Art (www.amazon.com/art), a marketplace that gives customers direct access to more than 40,000 works of fine art from over 150 galleries and dealers. At launch, Amazon Art will showcase artworks from more than 4,500 artists. The store is one of the largest online collections of original and limited edition artwork for purchase directly from galleries and dealers.

The art space will be disrupted by Amazon or it might be another story as seen with Amazon’s struggle with wine selling.

Amazon moves into Russia

Amazon has started to hire for staff in their Kindle division in Russia. The Kindle Store is the trojan horse for Amazon as that is normally the first path to market entry. We have seen this same behaviour when Amazon entered India and Brazil.

When I first heard about this news, I thought Amazon was going for a strictly digital play. But if the detail about the trademarks is true then the Kindle Store is but the tip of the spear. Amazon is probably repeating the strategy they used when they launched in Brazil. Their first operation in that country was the Kindle Store, which launched in December 2012. So far as I can tell Amazon has yet to launch a retail operation in Brazil, but it is probably in the works.

The emerging markets are steadily getting more attention from Amazon. Brazil, China, India and now Russia is seeing more investment from the Seattle company. Ozon.ru has been placed on notice, Amazon is on the way.

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Amazon doing an FBA pilot

Earlier today a reader contacted me with some very interesting information on a pilot that Amazon is testing currently. The contents of the communicated has been redacted to protect the identity of the source but a few things are clear to me.

One – Prime is becoming more important for Amazon to combat the impact that Google will have on their business and bottom line. Being able to provide a standard Amazon experience to all shoppers and then leverage Prime to enable more transactions just highlight just how valuable Prime is for the Seattle company. Amazon Prime is the worlds greatest loyalty program.

When Bezos and co create a revenue generation opportunity via a new investment or feature it is to be leveraged multiple times to recoup that investment. This very factor makes me realise just how far Amazon is in front of their competition. Think of it as Lean Startup meets Walmart.

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Amazon and controversial warehouse worker non-compete contracts

The last 24 hours is the reason why Amazon has hired Jay Carney, a former Obama spokesperson to be responsible for global corporate affairs. Amazon has seen a fair share of controversy over the warehouse workers and working conditions. As usual the company has largely remained quiet and I believe this is one of the areas in which Carney will be more verbal.

The issue is in my mind – the technology chameleon that does ecommerce (Amazon) is still very reliant on human intervention when packing of purchases are done inside Amazon warehouses. Speed and efficiency which is sold to customers lead to very harsh working conditions for seasonal and temporary workers. Robots who don’t have unions can only work for so many hours until they need recharging. Also sometimes logic is needed for packing which cannot be seen inside a robot.

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Amazon goes grocery shopping outside Seattle

Jeff Bezos must be the pied piper of commerce. His creation Amazon is slowly moving out of its traditional market (online) and disrupting retail. He clearly wants to ensure that Amazon can supply any product to any shopper in the US. (International focus is to intensify in the next 5 years in my opinion as current countries of operation become saturated)

The onslaught into retail and the high street started with the Amazon Price Check app. The idea was to enable shoppers to scan and compare products and then buy through Amazon at a discount.  In this specific case Bezos used the shopper as an intelligence network that would enable Amazon to create pricing data for retailer product.  It is telling that this happened in 2011 and if one looks back it was the beginning of their challenge to retailers in the US.

On Dec. 10, Amazon promoted a new “Price Check” mobile phone app by offering shoppers a 5% discount—valid only for that one day—on items they found in brick-and-mortar stores, but purchased online through Amazon instead. The app enables in-store shoppers to scan or snap a photo of a product. It then immediately compares prices with Amazon’s. The app is prompting an outcry from small retailers, who say the site is using their independent stores as its own showroom.

“The goal of the Price Check app is to make it as easy as possible for customers to access product information, pricing information, and customer reviews, just as they would on the Web, while shopping in a major retail chain store,” he said.

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Alibaba vs Amazon – 2014 Edition

When I wrote my first post on Amazon in which I looked at the competitors it will face; back 2012, I had 7 major ecommerce businesses that could destabilize Amazon’s domination in ecommerce:

  1. Amazon is and still is it’s own biggest concern
  2. Apple
  3. Alibaba
  4. eBay
  5. Walmart
  6. Rakuten
  7. Regional players (Netretail, Ozon, MercadoLibre)

Fast forward 2 years and a variety of changes (global economic changes, investments and the rate of offline and online retail convergence) – the above list changes considerably. The growth in single global brand ecommerce businesses has grown remarkably primarily through the globalisation of ecommerce.

Let me be clear – I am of the opinion that regional ecommerce competition is a less of a factor now as the global competitors can at any time launch in a market.  Global ecommerce businesses (Amazon, eBay, Rakuten etc) have the potential to invest significantly in a market through funds and staff.

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Amazon & Junglee Enter Indian ecommerce

Amazon has launched in India. The way which they have entered the Indian market is of particular interest to me.  Junglee.com which is partly owned by Amazon is wait for it, a comparison shopping engine. I initially thought that they would look at acquiring one of the popular ecommerce operators such as Flipkart, Naaptol or Myntra etc but it seems that either the Indian ecommerce valuations is too high or this is phase one of something bigger. More on that in a bit as I think Amazon is both playing offence and defence with Junglee.

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Why Kiva + Payment On Delivery May Equal 1 Day Prime for Amazon

There are two ways to extend a business. Take inventory of what you’re good at and extend out from your skills. Or determine what your customers need and work backward, even if it requires learning new skills.
Jeff Bezos

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The Amazon effect

“Google = fab search, Amazon = top-notch retail, Apple = elegant devices, Microsoft = dominant Windows, Facebook = best social networking.”
Kara Swisher, on Yahoo

The last few days have been busy for Amazon and in all honesty, I think the bigger implications of this week will be seen in future quarters.  I have  been deliberately not mentioning Google in this as I think the implications of a paid for Google product search (Google Shopping) is much larger than what is expected.

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Who is Amazon’s biggest challenger?

Having read George Taylor’s interesting article on “The battle over global commerce: Amazon vs Rakuten“, I feel a bit of perspective is needed. Amazon is a true giant that spans over many different business and Rakuten is the challenger trying to catch up. However, they are not the only commerce companies that want to be global.

I spent time in Seattle and New York in the latter part of October 2012 and one company has been following me coast to coast is Amazon.com. I had meetings with folks in operations and research and Amazon was given plenty of air time.

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The Amazon value proposition summarized

I have been following the Amazon Kindle event in Los Angeles and could not help but feel that Bezos is becoming a better presenter. OK – he is no Jobs but the products unveiled today is definitely aimed Apple and Google.

The Amazon value proposition is summarized brilliantly by the following image from The Verge‘s coverage of the event. (For the record their live blogging of events are top class).

The image can be seen with all of the announcements here: Live from Amazon’s Kindle event

Two of those items are up for discussion (Best Hardware and Best Interoperability). The Kindle Fire HD is a direct response to the Google Nexus I believe. I think we can all agree that a Apple iPad mini is on the way..

The above image highlights what makes Amazon.com, the behemoth that has the potential to shut ecommerce verticals and businesses down..

Amazon’s Jeff Bezos looks to the future

It is Cyber Monday – the biggest day of ecommerce in North America and the main benefactor of press coverage is Amazon.com. After watching the 60 Minutes interview that Charlie Rose did with Jeff Bezos, a few things come to mind. It is clear that Bezos is trying to do so PR work after the Everything Store written by Brad Stone made him seem to be a draconian leader. I dont believe in coincidences as the timing of this interview just seems to good to be true.

Timing is everything

As I have mentioned today is Cyber Monday and the 14 minute interview that Charlie Rose did can be seen as an advertorial as Bezos mentioned the normal lines “customer centric”, “we like to innovate” etc.

If you look closely at the video then Amazon fashion gets a favorable amount of time. AmazonFresh is also given some airtime and I must be honest – after giving it months of thought the fact that Amazon took 5 years to figure out a business model for the grocery business, that should scare competitors. AWS is a dark horse for me at the moment as Amazon has been reluctant to mention the size of the business and their partners that use the software platform.
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Apple – the pretender to Amazon’s reign?

This is the first in a series of posts regarding Amazon’s competitors.

Game on between Cupertino and Seattle:
It is clear to me that Apple is the company at the moment that can topple Amazon. It won’t be overnight but rather the process will take some time and will need Amazon to drop the ball (which at the moment I am not seeing any time soon).

Apple in it’s current form can take Amazon head on.  When Steve Jobs and Steve Wozniak founded the company, the main purpose was to create personal computers. The rest is history and is outside the bounds of this post. The point is Apple has software and hardware creation in it’s DNA.

Apple has a much larger global footprint in comparison to that of Amazon and in my mind it makes more revenue based on providing opportunity to users to spend money on its App Store and iTunes. One thing  that must not be forgotten is that Apple has 400 million credit cards saved by users on their iTunes platform. It may not be one click buying but the process is user friendly.

In terms of content, Apple can match and exceed the amount of content that Amazon has. The content I refer to is ebooks, music and apps which all lead to income for the Cupertino company. Steve Jobs was the only competitive CEO that realized that eBooks was a genius move by Bezos. However he took the potential negative of not being first to market and turned it to a positive by actively trying to assist publishers in fighting versus Amazon. In the end it lead to legal proceedings and a hefty fine for Apple (which they are contesting) but Apple will continue in the content game. Not one direct competitor took the Amazon bull by the horns as Apple did.

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Amazon launches Kindle unlimited, eBay has a negative quarter – eCommerce stories of the week

Last week was dominated by 2 stories – eBay posting disappointing results and Amazon unveiling a “all you can read” Kindle package. The eBay news is not surprising – Google hit the company with a search penalty based on low quality content and also eBay is still battling with the after effects of being hacked. Those two elements by themselves will harm any Internet business – together they will harm a large business for a few quarters. The bad results could not come at a worse time for eBay. They have potential competition entering a part of the business (11 Main)  and am also facing less than desired results on their eBay Now business.

Amazon seems to be moving at a faster rate than normal with regards to the ecommerce business. The Kindle unlimited service seems to me to be an unAmazon product. The selection at launch is poor (not one of the big 5 publishers has books that you can read) and seemingly this product went to public release inside 7 days. I am still trying to understand why Amazon would want to do this? Is it a reaction to Oyster? Is it to force the big 5 publishers to provide them with ebooks? or is this primarily to drive more revenue to the Amazon published ebooks?

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How big is Amazon.com?

Seattle is home of the silent giant called Amazon.com. When I was in the US in October, I visited Seattle and tried to find the silent giant. The offices are not marked but it is seen on GPS maps, one would think that this company would be proud of their heritage. Amazon.com operates in a different manner..

Amazon.com is the creation of someone whom I would love to talk to. Jeff Bezos is in a class by himself and there are maybe 3 people in commerce that can be seen in same light as him. Sam Walton, the founder of Walmart whom built a giant that is all across the globe.

In the developing ecommerce world there are 2 founders of companies whom I believe that can hold their own against Bezos. Jack Ma, the founder of Alibaba has built a business that will dominate a developing world economy. Is China no longer an option for foreign ecommerce investors? I tend to think so.

Secondly, in Latin America is a founder whom I have been privileged to meet in person. Romero Rodrigues is one of the founders of Buscape and one of the most thoughtful folks I have met in ecommerce. What makes these individuals different? Long term focus, they were all founders of the business and are now leading the businesses they created. The thing that makes them the leaders, is the ability to be 5 steps of the market. Skating to where the puck is going to be, comes to mind.

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A Review On Walmart’s Ecommerce Efforts Post Jet.com Acquisition

I have purposefully not commented on Walmart’s ecommerce efforts after the retail giant acquired Jet.com. There were many immediate reactions to the acquisition but the simple truth is that no-one had any idea how it would end up. Let me be clear – the acquisition is a long term bet by Walmart on Marc Lore and his team to grow their ecommerce efforts. This is also a reflective post in which I am trying to be as objective as possible.

The day Walmart & Jet.com shocked the entire ecommerce industry

On 8 August 2016 Walmart shocked the ecommerce industry by announcing their acquisition of Jet.com for $3.3 billion.  $300 million will be paid via Walmart stock. The acquisition ensured that early Jet.com investors made large returns on their bet but no-one expected Walmart to be the ultimate end game for Jet.com as the company rapidly gained size via heavy spending on advertising, low pricing and buzz.

The initial thinking was that Jet.com was acquired due to the business taking market share away from Sam’s club. Jet.com used bulk sales and technology to provide customers with low pricing. It is important to note that while Jet.com was a startup Marc Lore ensured that he never mentioned Jet.com as an Amazon competitor but rather it was described as online version of bulk retail operations seen at Sam’s Club and Costco. I also need to mention that once Jet.com launched publicly it initially was going to use a membership fee to subsidize the low pricing it would provide to consumers. In a space of 6 months Jet.com moved away from the membership fee as customers were not willing to pay another subscription to a retailer (I believe that this was aimed at Amazon Prime but Lore under estimated the impact that Prime has on customers.)

I strongly believe that until the day of the Walmart acquisition, Jet.com did not have a business model that was sustainable nor clearly defined their future.

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The 10 e-commerce stories for the week ending 12 July 2012

Phew, what a week. It feels like the headlines were dominated by one ecommerce company this past week. The problem is that this company is a Rubik’s cube and plays in a variety of verticals. Amazon.com is what I am talking about. The Financial Times had a great amount of coverage this week (all behind a paywall) but the truth is that no-one except the Emperor Bezos knows what the kingdom has in store for the ecommerce market.

Let me be blunt, if you don’t keep an eye on Amazon then you are ignorant. I am tempted to say you that you are destined for something like a Black Swan (which is far from something of beauty). I am expecting an Amazon smartphone as Bezos wants to ensure that he owns the customer journey.. whether it happens is another story. I have a confession to make as well. Yes, facebook commerce is on my mind and I think Thefind.com through their Glimpse product is on to something…

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You can’t out Amazon, Amazon

After writing about the 12 months post Jet.com acquisition by Walmart I have been thinking about how Walmart can win against Amazon.  While researching to write the post, I kept coming back to “You cant out Amazon, Amazon” which is both telling and indicative of how I perceive how Walmart is trying to win the US ecommerce market.

Amazon has their pillars – speed and convenience

Amazon has over the last 20 years consistently been willing to cannibalize their own business to stay relevant. They have also invested into logistics like FedEx or DHL would have and  invested into technology like Shopify and others have. By creating these levers they are able to commoditize them and sell the costs to third parties. Fulfillment by Amazon and Amazon Web Services have become like highways to customers with competitors building their own infrastructure.

Consumer wise, Amazon has focused on Speed and Convenience as being the drivers for consumer on boarding. Amazon Prime leverages both speed and convenience to ensure that customer spend heavily and create recurring revenue for Amazon. Customers have become accustomed to the convenience created by shopping on Amazon and searching with the Prime filter on.  That may seem one dimensional but in effect that is another touch point that Amazon has created a revenue generator by charging sellers to have their items delivered by Amazon.


Amazon has created speed that they are able to commercialize akin to an Uber trip (Amazon Prime Now) in which time and distance traveled are used to calculate the cost for the utilization of the Amazon infrastructure. Instant pickup weaponizes the speed to aim at brands and competitors.


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The Great Technology War between Giants

2012 was a year in which a bigger picture formed inside my thinking. Ecommerce is my day job and I think we are in a great period for commerce. Let us be clear about one thing, retail and ecommerce is no longer 2 channels. It is one massive opportunity for businesses and entrepreneurs to assist customers buying items whether it be online or in-store.

Mobile commerce in its current format is not the endgame in my mind. We are only scratching the surface on what mobile devices can do. Augmented reality, location and a variety of other things will play a role in commerce in the coming years.

Regular readers will be aware of my thinking regarding the big five. It is not the animals found in the game park but rather the big five technology businesses. I have written about it in the past when I looked at the Amazon effect but these companies drive the technology used by us on a daily basis.

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