Amazon News Roundup, Volume 14
Amazon’s got a big competitor coming, and it’s not one that you’d probably expect.
Nope. It’s not Walmart, or Target.
It’s not even Shopify.
Instead, it’s Amazon’s massive Chinese counterpart (and the largest e-commerce site in the world): Alibaba.
According to Yahoo! Finance, Alibaba is rolling out a new business-to-business program to attract US sellers.
Alibaba revealed its ambitious plans for the U.S. market on Tuesday by launching new capabilities for U.S. businesses on Alibaba.com, including domestic payments, marketing tools, and a U.S.-based support team. It is also kicking off, in Brooklyn, New York, a national tour to recruit U.S. small businesses to sell on its platform. A few anchor retailers like Office Depot and RobinsonFresh have already opened their stores on Alibaba.com, but the company is not disclosing the exact number of U.S. sellers that have signed up for the new initiative so far or its goal.
This, obviously, puts Alibaba in direct competition with Amazon, who is also doubling down on its third-party seller efforts.
What would Alibaba’s fees be like?
According to some of the Amazon sellers in the Amazon FBA Competitive Edge group on Facebook, Alibaba has been toying with this program for a while.
“Canadian entrepreneurs [were offered the opportunity] two years ago. [Gateway] costs around $2,000 a year and you need to have verification of your company and certificate done by a professionally-recommended site inspect [which costs] about $1,000.” – Ali A.
“Not surprised. I attended the first Gateway program mentioned in the article. If anyone can [give] Amazon a run for their money it is them and Jack Ma. He is brilliant and driven. I think $2,000 with no other fees would be cheap for a year. Think about the never ending fees given to Amazon.” – Janice K.
So $2,000 for unlimited products on Alibaba’s platform? Is that a better deal that Amazon?
Let’s do some quick math to figure that out.
If you have one product on Amazon that sells 200 units per month for $20 per unit, that means you will pay $600 in Amazon seller fees (200 x $3 in fees = $600).
Multiply that by 12 months and that $600 quickly jumps to $7,200 in seller fees. Keep in mind, though, that this doesn’t count professional seller fees, FBA fees, or storage fees from Amazon.
So right off the bat, you’re saving close to $5,000 using Alibaba over Amazon. And that’s with just one product!
But that’s not all…
The biggest bonus? Alibaba doesn’t own your customer’s information.
Another big selling point for Alibaba’s push for business-to-business is that, unlike Amazon, they won’t own your customer’s information.
Sellers have full control of that information.
This is huge, since building an audience outside of Amazon is extremely difficult.
Furthermore, it could make getting reviews, contacting customers for follow-ups, and other methods of building a business much easier.
“Our relationship with our sellers is we’re an ally to them. And it’s really important to understand that if you’re a seller, it’s all about how you own the relationship with your customers — We don’t.” – John Caplan, head of Alibaba’s B2B business in North America, from the Yahoo! Finance article mentioned above.
Want to get in on the chatter?
If you’re a Jungle Scout user, join our members-only Facebook group:
Amazon FBA seller news this week
Need to know for Amazon FBA Sellers
- Amazon’s updated suspension policy still has sellers worried about getting inexplicably booted – CNBC
- How Amazon controls its marketplace – Prospect.org
- Understanding the IP policy changes coming to Amazon sellers – Ecommerce Times
Also of interest:
- Amazon results to show extent of sales boost from one-day shipping – The Wall Street Journal
- No, Amazon didn’t destroy retail. Here’s why it probably saved it – Inc.
- Amazon reports strong revenue and spending growth: five key takeaways – The Street
Anything we missed?
Let us know what’s important to you by filling out the following (anonymous) form: