Amazon, An unbelievable marketplace.

Amazon was the marketplace that threw investors during the dot-com boom because they had a ten year plan, while all the others had a a two week plan if they were lucky. The Year-On-Year growth of Amazon is to be ‘awed’ at and unlike other marketplaces, you never annoy their customers, because its their customers and they’ll kick you off with no chance of getting back on again for upsetting their customers. In short, Matthew aspires to eventually working with Amazon directly as the UK CEO.

Matthew has vast experience with launching merchants onto the Amazon platforms, including ‘Fulfilment By Amazon‘ or more commonly known as FBA.

Matthew is an Amazon expert and can help you leverage this channel effectively. You can contact him on his dedicated Contact Matthew page and see how Matthew can help your business.

Amazon: Navigate the Cloud at AWS Summit 2011

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amazon-web-servicesThe UK Summit is in London on the 14th June 2011 and Navigate the Cloud at AWS Summit 2011 registration is currently open and there are also events in New York on the 10th June and 21st June in San Francisco.

The full details are below.

Navigate the Cloud at AWS Summit 2011

Whether you are new to the Cloud or looking for more knowledge to take you to the next level, these full-day conferences will provide the information to successfully navigate the Cloud. These regional events will feature a keynote address by Amazon.com CTO, Werner Vogels, customer presentations, how-to sessions, and tracks specifically designed for new and experienced users.

Reasons to attend

  • Gain a deeper understanding of Amazon Web Services, including best practices for developing, architecting, and securing applications in the Cloud.
  • Hear how AWS customers have successfully built and migrated a variety of applications to the Cloud.
  • Learn how Solutions Providers from the AWS community have helped businesses launch applications in the Cloud, utilizing enterprise software, SaaS tools, and more.
  • Discover how AWS’s services can help your organization meet growing business needs while reducing overall IT expenditures.

Who should attend

  • Developers and Engineers, System Administrators, Architects, IT Specialists, IT Managers and Directors, and Business Leaders.
  • Find sessions that meet your needs in our three tracks:Trailhead for those new to the Cloud, Base Camp for experienced users, or the Guided Trek to help you discover Cloud solutions.

Agenda

8:30am–9:30am Registration & Solutions Provider Expo
9:30am–9:45am Welcome
9:45am–10:30am Opening Keynote: “State of the Cloud”, Werner Vogels, CTO, Amazon.com
10:30am–11:20am Customer Presentations
11:20am–11:45am Customer & Q&A Panel
11:45am–12:45pm Lunch & Solutions Provider Expo
12:45pm–4:30pm Break out Tracks:
Trailhead
Base Camp
Guided Trek
4:30pm–5:00pm Closing Keynote: “How Amazon Migrated to AWS”, Jon Jenkins, Director, Amazon.com
5:00pm Networking/Cocktail Reception

Where/When

June 10 – New York
Roosevelt Hotel
45 E 45th Street
New York, NY  10017
Register for the New York event

June 14 – London
Queen Elizabeth II Conference Centre
Broad Sanctuary, Westminster
London SW1P 3EE
Register for the London event

June 21 – San Francisco
Westin St Francis – Union Square
335 Powell Street
San Francisco, CA  94102
Register for the San Francisco event

Updated Services List, Forthcoming Articles & Client History

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Forthcoming ArticlesI’ve been really quiet again on the article front this week again. I’ve not given up, quite the opposite. I’ve been beavering away in the background updating other content on the site (like Amazon & eSellerPro category pages) and that’s what this article is about, what is coming up and what I have completed in the past few days.

Also, I have a draft article on my MBA progression that is due for tomorrow morning (Friday 11th March), if you have any background on working with someone whom has an MBA, been through the process, employed, read about or have any information you may feel would be of use to me, please contact me today, as I’m at the OU in the evening.

Forth Coming Articles

This is not a complete list as there are a few that I wish to keep in my ‘back pocket’ for later use. However should give you an idea on the topics that are due to be released here in the forth coming days:

  • What is Fulfilment By Amazon & How much does FBA cost? (FBA Calculator included!)
  • Should I be using Amazon’s FBA (Fulfilment By Amazon)
  • Which eBay Shop Subscription Level should I be using? (Fees Calculator included!)
  • The untold truth about using 3rd party software such as Channel Advisor or eSellerPro
  • Is eSellerPro really worth +£2,000 plus fees?
  • Why choose Channel Advisor, aren’t they Web 1.5?
  • What is 247 TopSeller?
  • An Ex Employees/Insiders guide to eSellerPro
  • Get Ready, Get Set. Facebook Credits are going to change EVERYTHING
  • How To: Using eBay Shop Keywords to Leverage the Extra eBay Shop Pages

Client History!

This page is really is in its infancy currently. however it has been an interesting experience, remembering all the different companies I have worked with. The stark reality that there are so many and how different each of them were. The Client History page is not complete yet, however it visually shows the breadth of businesses I have had and still have the joy of working with.

New Service Offerings

I’ve been documenting what exactly I can offer potential clients and what I have been helping businesses for what is a very long time now with. Its been quite an interesting process as I am well-rounded-character and have experience in a lot of fields, that is a quality that makes me unique, however I do have key offerings, these are:

Business Mentoring & Consultation
The person you can turn to for advice, suggestions and solutions to your issues. If you want to work 4 hours per week we’ll work towards that, if you want to grow by X% then, we’ll do what is needed to achieve that goal.

Competitive Intelligence
A legal and ethical business practice, which allows executives and managers in making strategic decisions for an organisation. Competitive Intelligence is the defining, gathering, analysing and distributing intelligence about a company, its products & services, its competitors and any aspect that affects the company in question.

In short, knowing your competition better than they know themselves.

Data Manipulation & API Integrations
I am an expert with MS Excel, can write VBA, iMacros, PHP and JavaScript by hand, however I know that there is no point in adding complexity, if the lowest skilled user cannot use it. That’s why I have for a long time used the term I coined ‘Matt Proof’.

From SOAP to CSV, XML to HTTP Post, if it needs to be altered, chopped, changed, manipulated, uploaded or abused to a much nicer format for use elsewhere, then there is an extremely high chance that I can aid you with this. I’ve included several examples on this on the Data Manipulation & API Integrations page.

If you are interested in any of these services, then contact me today.

The WOM Factor – Why ALL eBay Sellers are Not Equal

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the-wom-factor-chalkboard

The Word of Mouth Factor

I’ve answered too many eBay’er questions over the years, its probably why I have such a tainted view on specifically eBay buyers, my personal ‘resounding’ conclusion is that they’re scared and really scared at that, almost to the point of paranoia.

In the next few minutes, we’ll be looking at the different types of buyers and a new system of gauging sellers, not feedback, but a derivative of feedback, which gives a clearer overall picture of the seller in proportion to their customers views and perception of the business. I’m calling this the WOM factor.

Multi-Channel

For multi-channel businesses, they’ll know that there are three different breads of customer and they vary enormously. These are:

#1 The Website Buyer

Website customers are the most relaxed of them all, you’ve woo’ed them with your marketing and reassured them with your subliminal security and reassurance factors. They’ll be happy with a couple of days shipping time and normal have already answered their questions before even buying from you.

#2 The Amazon Buyer

Its extremely rare to receive a question from a Amazon buyer and if you do its 99.9999999999999999999999999% of the time related to shipping or a broken item. Besides that, they’re quiet as a mouse.

#3 The Psycho eBay Buyer

I feel sorry most of all not for the sellers on eBay, but for the buyers. Mentally unhinged, these buyers are the stuff of customer services nightmares, they’re scatty and nuts, they’re lunatics and time wasters. But most of all they’re just scared.

They’re scared of being ripped off, they’re scared you’re going to steal their money and emigrate to Nigeria and then sell all their personal details to a chap in a mud hut who will spawn 10 versions of themselves as the victim.

Harsh, but that’s the kind of metal thought patterns that go through these paranoid buyers heads

Word of Mouth

This isn’t a new concept, infact its a very well documented concept, in short it simply says, that for a good experience a customer will tell two people and for a negative experience, they’ll tell 10 people.

Loss & Reward

This also sits well with the experiences of reward and loss. If I take your pet cat called “puddles” away from you right now, never to be given back, the sense of loss you will feel will be immense; However if I give you back a kitten called “Spot”, you’ll learn to love the little ball of fluff, but it will never replace puddles, who’s loss carries a far far greater sense of loss, than any gain can give.

Also word of mouth is extremely strong, companies are scared of the extremes that can occur with terms being coined such as ‘Brand Terrorists’, those customers that have been so pissed off by a business or brand, there is no stopping them ram-raiding the company or brand at any opportunity.

Inversely, when tribes are formed (Seth Godin’s input here)  “Brand Sponsors” are created, those people that are just nuts for a product or service, the most immediate example I can think of are Apple fans. I’m an Apple product fan, but I’m to the level of what I would call excessive, that some of these Apple nut-mini-Steve-Jobs are.

Using “Word of Mouth” to Measure eBay Seller’s

Its not hard to see why either, if we use the rule of that one positive comment will create 2 positive word of mouth reviews and a negative or neutral comment -10 word of mouth reviews, then its not hard to do the maths on a random selection of sellers and understand that eBay’s growth is actually tainted by its underlying feedback system and also that all sellers are not actually equal.

The DATA – Random Sellers Feedback

These were taken completely at random, I picked four categories and picked a couple of sellers for each category from the top of the list (yes I’m aware this is weighted by the best match algorithm) and included their feedback for the past 12 months and neutrals are counted as negatives.

I have not included revised feedback, I could not decide whether these were positive or negative events, so have elected to ignore them completely. If I was forced to add them, I would class them as a negative event, as it was not a “perfect” transaction, perhaps I should look at this again in a few weeks and maybe I’ll attribute a +3 or +4 to these, but for now, I’m not sure.

PS: What do you think? Post in the comments below!

Random eBay Sellers Feedback Scores

ID Positive Negative +Points -Points WOM Factor
jpe_enterprises 189 2 378 20 5.29
loco_gadgets 378 1 756 10 1.32
benthamltd 80791 1008 161582 10080 6.24
argos 259217 6181 518434 61810 11.92
xia090729 561 7 1122 70 6.24
glamorousoutlet 22585 530 45170 5300 11.73
bench_outlet 40274 530 80548 5300 6.58
bessy0302 2960 12 5920 120 2.03
online4babyltd 55870 614 111740 6140 5.49
babzeeonline 19549 217 39098 2170 5.55
tennis-deals-2008 4221 24 8442 240 2.84
poshtotz-store 5337 34 10674 340 3.19
little-devils-direct 773 10 1546 100 6.47
flyingplaneman 4765 68 9530 680 7.14
kmsdirectshops 14069 198 28138 1980 7.04
aqua_spot 894 7 1788 70 3.91
Totals 512433 9443 1024866 94430

Understanding the Data

I’m quickly adding that several of these sellers actually had either 100% or 99.9% feedback scores, this is only one factor that I am indicating in this article. While the vast majority of these sellers are above 99.0% feedback, Argos stands out for two reasons:

  1. They have a feedback score of 98.7, the lowest of the group
  2. They have the worst ratio 11.92% of WOMF

The second, is on face value an OK seller, they have a score of 99.1% currently, which is good enough and almost all retail stores in the physical world, would probably never be able to achieve this.

Glamorousoutlet are turning over a decent amount of items, with 22,585 feedback in the last year, this is probably around +32,000 orders, however they have incurred 530 negatives, or using the WOM Factor a negative score of 5300, giving them a WOM of 11.73 which when you look at Argos with their 98.4% feedback, is actually worse in proportion!

How to Calculate the WOM Factor

Calculating this is easy, you take your positive feedback for a set period of time and times it by 2, then you take the negative and neutral comments and times them by 10. Then divide the negatives by the positives and times by 100 to gain a more friendly number. In short the lower the better.

The-WOM-Factor

How to Calculate "The WOM Factor"

 

What Customers Really Think

Being able to gauge what your customers truly think of your business is stuff of marketeers wet-dreams. This new factor, I’m coining as the “WOM Factor” can be one tool in your arsenal to accurately gauge what your customers actually think of you.

To give you a measurable and a new dimension on what is just raw numbers. The WOM Factor gives you an indication of what is the actual effects and general response of your business on the outside world.

I wonder what the WOM Factor for Microsoft is?
I wonder what the WOM Factor of Apple is?
I wonder what the WOM Factor for the entire eco-system of eBay is?

Whats Your WOM Factor?

This leads to the pivotal question, whats your WOM Factor?

Fulfilment By Amazon Webinar: Shipment Creation and Inbound Process

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Fulfilment By Amazon. FBAIf you’re interested to understand in more detail how the shipment creation and the inbound process of Amazon’s fulfilment services (FBA) works, Amazon have a webinar at 5pm GMT on Wednesday 26th January.

I have attended a few Amazon webinar’s in 2010, they were well laid out and always learned something new while watching, the questions & answer sessions at the end can be very useful too.

Register Now

Apparently space is limited (is this a modifier to provoke action?) you can register your place following the link below:

https://www1.gotomeeting.com/register/682209817

Or for those whom need a call to action button, click the button below:

Register Now

Webinar Overview:

We are pleased to invite you to this FBA webinar focusing on the topic of sending shipments to our UK fulfilment centres. We will discuss the following:

– Quick Reminder about the shipment creation process
– Amazon’s requirements and restrictions
– Examples of common mistakes and problems which occurred last year
– Q&A

A representative from our operations team will be there to share first-hand experience and tips on these issues.

This session will mostly focus on learning how to improve your shipment process and avoid inbound problems. We will dedicate as much time as possible to questions.
For sellers starting with FBA, who are not familiar at all with the shipment creation process, we recommend you to first watch the recording of our previous webinar ‘Create your first shipment’, located here.

Title: Fulfilment By Amazon: Shipment Creation and Inbound Process
Date: Wednesday, 26th January 2011
Time: 5:00 PM – 6:00 PM UK Time

PS: Thanks to Carole from the Amazon FBA team for clarifying the day as the dates were out

How To: Win the Amazon Buy Box

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For seasoned sellers, they know when they get the Amazon Buy Box, because they start receiving batches of orders. Its literally an ON/OFF switch for orders once the Amazon Buy Box is enabled for that seller.

In this article I will explain to you what the Amazon buy box is, what impacts it and how Amazon FBA can weigh the odds in your favour to win it.

So what is the Amazon Buy Box?

The Amazon Buy BoxUnlike eBay where you can have multitudes of the same item over many listings, Amazon’s format is different, Amazon has one ‘master’ listing and then allows multiple sellers, including itself to sell that item.

This master item, contains information that is an amalgamation of data from eligible sellers of the given item. Although some master items are created by Amazon themselves and contain more in-depth descriptions than they allow merchants to create

The ‘Buy Box’ is Amazons way of sorting the sellers that have the master product available to the customers.

You’ll notice that there are two parts to this ‘Buy Box’, the one that merchants fight for are the upper ‘Blue Buy Box’, this is how the vast majority of sales are made on Amazon.

The lower part was added in 2010 and shows offers from merchants that are very close to the merchant that is currently winning the coveted ‘Blue Buy Box’ spot.

If you look at the blue part, this is coloured differently from the rest of the section and on the Amazon site, coloured quite differently so it stands out, within it, is the primary “call to action” button, ‘Add to Basket’. You can see it dwarfs the other buttons. This is why getting access to the buy box is critically important, if you’re not in the box, you’re literally not in the game.

Amazon Blue Buy Box Winners

This is where Amazon are pretty darn smart and incorporate a large number of factors into whom wins the blue buy box and also it is to be noted that the winner (where there are more than one equally competing merchants) can and does rotate.

In the screen shot of the buy box above, if you look closely you’ll see that not the cheapest option is sat in the blue buy box, instead an offer for ‘£1,380.25 + FREE SHIPPING’ is winning, although the secondary offer is at ‘£1,369.99 + £6.00 shipping’ which is less than the current winner.

In fact looking at the screen shot below, neither of these two are the cheapest and clearly illustrates that you need just more than price to win the blue buy box and crucially the sale.

competing-for-the-buy-boxSo as you can see, there are actually four other merchants that have this same item for sale, but even still, none of these won the box and instead another has taken the box.

And if this is not bad enough even after 30 refreshes in different browsers, from different machines on different networks, I could not get the buy box to shift off that seller, but I did win at the game by logging into an Amazon account that had Amazon Prime enabled on it.

getting-the-buy-boxSo what are the factors that influence the buy box?

We’ve seen from the above that if Amazon decide that they want to give a seller the buy box, then they will give out the keys to sales and sometimes it can be quite sticky even when prices are quite some way out too.

To understand the logic behind the buy box we need to understand what Amazon wants. This is actually quite simple:

Amazon want only to sell items to customers from merchants it can trust. Ultimately if Amazon suggest a different seller, then this is representing themselves.

Unlike eBay, this is Amazon’s own marketplace, they sell on it themselves, it is THEIR marketplace, so you better have some compelling reasons why they should allow you to sell goods along side them and for them to allow you access to the buy box.

Note: This is why I love Amazon so much, it is extremely rare that I have an issue with an order from Amazon, whether its direct from them or a merchant on the site.

While not exhaustive, these are the main factors in winning the coveted Amazon Buy Box.

Price

Besides actually being eligible, the total order price including postage, is the second most important factor in winning the blue buy box. This is only superseded by sellers that use Amazon’s FBA.

Availability

How many do you have and how quickly can you ship? By consistently fulfilling orders in a quick time, improves your chances.

Volume

This goes back to consistency and is probably why the seller in the first part of the article stuck on the blue buy box, they have been consistent when selling this product over a period of time.

Eligibility

Really daft, but first you must be eligible for the buy box. New merchants are not awarded access to the buy box for several weeks, even months until they prove that they can be trusted. Remember this is Amazons own marketplace and their own customers.

I say this time and again, never, ever piss off Amazons customers.

Refunds

By having a low refund rate indicates that you are in-control of your business. Not letting buyers (remember they are Amazon’s buyers) down, you are helping Amazon trust you.

Customer Feedback

By keeping negative ratings to a minimum, you are pleasing Amazons customers. Amazon like businesses that keep their customers happy. These comments can be revised and I strongly urge you to watch the feedback you receive. Remember its their customers…

A-to-z Guarantee Claims

This is Amazons return process. While you are bound to have a number of returns, Amazon expects very few, act fast on these as it will play in your favour. Not getting them in the first place by excellent customer services is probably a better route.

Fulfilment – FBA

This requires a special mention and I will expand on this in the next section

The not-so Secret Pricing Rule

I let this slip in a recent article, you an read it here: The Amazon Buy Box – You know the Secret Formula Right?

Amazon Fulfilment AKA FBA. Guaranteed Blue Buy Box

Quite a bold statement, ‘Guaranteed Blue Buy Box’, but once you understand that by using Amazon’s Fulfilment services called FBA, then you are actually giving the despatch control to Amazon, thus as long as your pricing is relatively close then the buy box is yours.

In the screen shot above where multiple buy boxes are shown, the one to the right includes s screen shot from an Amazon account that has Amazon Prime. This is a service that costs £49 a year and gives Amazon customers access to unlimited free next day deliveries, they do this by offering it on their own and on items that are held in their fulfilment services.

I will be posting more information on FBA in a future article, I did write this up before Christmas but decided it needed more work.

Combining the Factors

Its only by combining all these factors together, can you expect to have access to the Amazon blue buy box and make lots of sales on Amazon.

Sure, you can and will make sales without the buy box, but a common conversation with seasoned Amazon sellers is that they pretty much know when they have hit the buy box for certain items because they get a flood of orders for the item that has won it.

Links of Interest

These links provide further information on the factors that influence winning of the buy box.

Part 1: Battle of The Giants – Tesco V’s Amazon – Who Will Win?

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Foreword

I’ve decided to release this earlier than what I had originally planned, its verging on the longest article I have done since University and while reading back through the first few sections its already totalling in excess of 10,000 words. So I’m releasing this beast in more manageable parts, for both me and you.

Over the next few days and weeks, I will be exploring the possibility of Tesco launching a ‘Tesco Direct Marketplace‘, to potentially rival that of Amazon (and eBay and anywhere else for that matter). I’ll be looking at the options that Tesco have available to them and what plus points they can take from their rivals and also which pitfalls to be careful of.

Its not going to be light on concepts, as with the possibility of a new platform. I am seeing this as a chance to re-write the whole idea of a Marketplace and evolve it further than what has been done before. It comes the potential to make a success we have not really seen from a retail giant, but it also has the potential to become a mess and land the company in an awkward position publicly and possibly financially.

Introduction

2010 was a really interesting year as a by-stander, eBay has made more steps towards taking on Amazon directly (single styled listings etc), Amazon had a stab at eBay suggesting to sell granny’s unwanted lamp she had a Christmas present on Amazon (rather than eBay, amongst other smaller things), Amazon had a stab at Tesco by launching food products and Tesco responded almost immediately with a direct stab back at Amazon with a PR release that they were to be taking on Amazon with a new marketplace.

While all this has been going on Play.com have been relatively quiet and literally cleaning up, a recent satisfaction poll have them ranked right behind the two Amazon’s in third place beating the likes of John Lewis, Apple, M&S and so on…

However Play.com isn’t going to be the focus of this article, what I am going to be doing is exploring the idea of what could be done and how I would suggest its tackled, if Tesco was seriously considering launching a new marketplace to rival Amazon.

I’ll warn you now, I am expecting this article to be in the realms of thousands of words, I have even been thinking I could use this as a base for a dissertation, its bound to end up in that scale of coverage, although having never completed one and never having received any outline on how to format one, I feel I may be mocked for even suggesting this.

Note: If you have any comments I am always humbled to receive feedback, see the reply box at the bottom of the page.

Lets take a look contenders

Before we can progress we need to take a closer look at the two contenders in this fight. These are two heavy weight fighters of stellar proportions, whom both have obscenely deep pockets to dig into and a grit to make even the great Mohammed Ali run scared.

Amazon

Amazon UKAmazon is synonymous with quality, speed and trust. You slap anything on Amazon and the buyers feel extremely reassured by that Amazon logo alone. Half the time I am sure that buyers do not really know whom they are buying from, as they assumed that the vast majority of the time its directly from Amazon themselves.

With Amazon launching their fulfilment offering ‘Fulfilment By Amazon’, also known as FBA, their Amazon prime customers really do not see any difference in cost of shipping, nor really any great degree in despatch times, as its all being despatched from their own warehouses.

Lets not forget that Amazon’s original business plan in 1994 scared the daylights out of investors at the beginning of the dot-com boom, they were literally the only one that had a decade long plan, where-as everyone else was measuring in months, Amazon took the view that it takes years to bring an business idea such as theirs to fruition, just look at them now, its only just begun.

Starting in 1994 and launched on-line in 1995, Amazon for me is one of the first choices of marketplace I go to, in fact I rarely go elsewhere for my book buying addiction and since receiving an iPad  as a bonus pressy (see article here), the one click buying of books for the Amazon Kindle reader App,  has my bank account running scared.

Books and other media are a symbiont of the Amazon brand, literally if I think of a book, I think Amazon and I am not alone in this with Amazon, I believe the general Internet population are of the same line-of-thought, its almost second nature, a preprogrammed thought pattern, Book = Amazon.

I remember preparing some presentation notes on Amazon and the differences between Amazon and eBay, it was really quite a trip back, while remembering that Amazon started off with a similar start as eBay, sporting an auctions offering for merchants, but it never really caught on as eBay even then was creaming it. So Amazon launched a new fixed price marketplace called zShops, its the spin off from this, which we know today as ‘Seller Central’.

zShops was faded out, basically I believe because it was crap (interface and no way of easily creating new product), but it did work and was bundled up into what we know as Seller Central and is actually a very simple and broad system to use.

I could go off into a bender on the Amazon Seller Central platform here, but for now you need to be aware that its similar to eBay as in you are able to create new inventory records and sell on Amazon.

Amazon is an interestingly flip to Tesco, as you’ll read shortly, Tesco have a lot of the off-line bases covered, inversely Amazon have a lot of the web bases covered, a quick brain-dump on thier channels:

  1. Amazon main and international sites
  2. Amazon Prime (listed separately as its genius)
  3. Own branded product range, named Pinzon
  4. Javari
  5. Endless.com
  6. Amazon Web Stores (AWS)
  7. A9 (believe this to be Research & Development)
  8. Fulfilment by Amazon
  9. An affiliate program of epic scale
  10. The Amazon Kindle
  11. ‘Amazon payments’ a payment processor (due to the UK in May?)
  12. And a whole host of ‘cloud’ based offerings & web services

And for sales, we’re talking billions, the figure I could find from wikipedia was $24.5bn in 2009, I could not find any quoted figures for 2010, a rough stab would be at the £30nb or more.

A side note, the Amazon logo

Amazon UK

Hey Look Amazon, A to Z!

Now I’d love to say I realised this, but it was a in a discussion with a client, notice the arrow below the A and Z, We do everything from A to Z? Makes sense now, I never spotted that.

Tesco

Tesco isn’t to be shunned at all in this fight, these are remember, the retail giant of the UK and by a massive margin too. Using the figures from wikipedia, they had a market share of 30.5% in Dec 2009, ni-on double that of ASDA with 16.9%, Sainsburys 16.3% and Morrisons at 12.3%.

tesco-market-share

In 2006 Tesco launched ‘Tesco Direct, their public strategy is quoted as:

In 2006 we launched Tesco Direct , a new online and catalogue non-food offer, with over 12,500 products available online. Next day delivery is standard for small items with a unique two-hour delivery window. We issued 11.5 million catalogues last year. The popularity of our in-store Direct desks, which are now in 231 stores, continues to increase as more customers order and collect items from their local Tesco. We plan to add clothing to our online offer later this year. To find out more visit www.tesco.com/direct

I found an interesting statement on the Tesco Plc site for the year ending 28th Feb 2009, indicating that while they made an opening loss of around £22M, they were 2% up in direct comparison to UK trading profit.

The article is here and I have included the extract below

Increased productivity and good expense control enabled us to maintain solid margins and deliver good profit growth despite these challenges, whilst also absorbing initial trading losses totalling around £22m on Tesco Direct. After these costs, UK trading profit rose 12.7% to £2,381m (last year £2,112m), with trading margins at 6.2%, including TPF, slightly up on last year. On a 52-week comparable basis, UK trading profit rose 10.7%.

If you look further around thier Plc site, then some truly stunning numbers are publicly shown, I dribbled when I read these numbers, they have a Non-food sales figure of £13.1 billion, yes billion for 2009/2010. After the Christmas we just had, this has to be closer to the £15bn mark.

tesco-non-food-sales

I could not find any published figures on the sales volume for the Tesco Direct site, an guess that the site takes about 2bn, with the majority of sales being made from their main site or the other two sub sites for clothing and entertainment.

Tesco Outlet on eBay

In 2008 in partnership with Trojan Electronics, Tesco launched on eBay as Tesco Outlet, I know this as I was the person that trained the staff and the two companies on the software they are using to launch to eBay with. As Trojan Electronics is a refurbishment house, it made great sense for Tesco to leverage the refurbishment channel and sell the goods direct (well indirectly, but its far superior and more lucrative for them this way).

In October 2010, on eBay alone, Tesco Outlet according to Terapeak, scored in the region of £370K of sales on eBay, £531K in November and £488K in December, although the sales for the first few days of the year are pitiful in comparison, I can only assume that someone forgot to launch a sale.

With the £13.1bn worth of non-food sales, then you have to expect some broken kit, most of which ends up in refurbishment houses such as Trojan, however not all ends there are can traditionally retailers such as Tesco get done-over on the pricing of kit, this was actually a shrewd move by them that year, although I am pretty sure that this was started by the asset recovery sections on the Tesco Giant, rather than being initiated at Board level; Maybe its what has given them the taste to take on Amazon?

Tesco Sales Channels

Tesco know they need to go multi-channel and have been busy, what a set of channels they have, a quick brain-dump on these are:

  1. Retail Super Stores (food)
  2. Tesco Metro/Express
  3. Tesco Extra & Homeplus
  4. Catalogues
  5. Telecommunications (Tesco Mobile)
  6. Tesco Finance
  7. Tesco Direct Site
  8. Tesco Clothing Site
  9. Tesco Entertainment
  10. Tesco Outlet on eBay
  11. Club cards (noted as a separate channel on purpose, you’ll see why later)

Note the lack of Amazon here, they could have easily ported their goods on to the platform, but never did. I wonder why? But ‘Holy Cow’, these peeps have more channels and fingers in pies that one can shake stock at. Amazon needs to be scared, if its off-line, Tesco have the ALL bases cover and soon maybe, online covered more thoroughly too.

The Contenders Summary

Some 1600 words in and I’ve not even got to the juicy parts yet, but without this understanding of the two marketplaces above, we cannot compare the two together. I will not just be comparing these two either, I will be pulling in the good and bad points from other market places too to give a fuller picture.

eBay has never to my knowledge declared war on Amazon and inversely I have seen Amazon wave two fingers at eBay. I always expected for a third party such as Microsoft or Google to get in on the fight, perhaps Amazon see Tesco as easy prey, maybe now Tesco see Amazon as easy prey.

These two companies are giants in their own arena’s, it was not going to be long until the two bumped into each other and this really has the makings of something on an epic scale.

What ever happens this is going to be a battle of epic proportions and I really do not know who is going to win in the end, if either of them. But thats not the point of this article, what I am now going to explore is how Tesco can make a Marketplace to rival Amazon. Its not going to be easy.

Your Feedback

So, I’ve primed the background to these giants, one an off-line expert, one an on-line expert, who is your money on and why?

Dealing with Failure Amazon CEO Brian McBride V’s Skype CEO Tony Bates

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Skype-delivered-purchaseThis morning, I received the email I have been looking out for, the one that was had ‘Sorry’ in it from Skype, alas, it was not the one saying ‘Sorry’ from Amazon.

To set the background to this article, I recently posted on the email received from Amazon’s CEO Brian McBride, where he could not muster an apology for the epic failure of the delivery part of Amazon during the two-or-so weeks of snow before Christmas.

It particularly annoyed me, as you (or I, specifically) would have expected the gent to realise that when you buy an item on-line, that the delivery of the order is also a key part of the order experience and if its going to let you down, then to communicate this and apologise up front.

But normal customers really don’t give a dam and want their items NOW.
Quote Reference

Where as Skype’s new CEO, Tony Bates, in a similar service delivery issue, where Skype got knocked out for a day or so, super-nodes software versions apparently, was right-upfront with a YouTube video, completely with a ‘hoody’ and apologised:

When you compare the email that Brian McBride sent to the video above, you know which one gets my vote.

Turning a Negative into a Positive

Now, here’s the spin. Amazon’s Brian McBride sent an email, which was pretty much pointless, where as Skype’s Tony Bates turned the service failure into a positive.

What do I mean by this? Simple, in the previous article I concluded this:

The inclusion of a say a £1.00 voucher would have been nice, free expedited shipping for non Amazon prime customers on an order to use in the new year would have been (here comes that bloody awful set of words) win-win for customer and company, by getting the customer to return to the site, to undo the previous possibly poor experience and get a bonus sale at the same time.

Now that is exactly what I just received from Skype!

Skype-accepted-voucherWell, a ‘buck’, but what Skype has done  is:

  1. Admitted fault and dealt with it, publicly.
  2. Bribed the consumers, with a service they can easily offset
  3. Sneaked in two coup’s, these are
    1. Buy giving a paid-for service offering away for free, this should add inventive to carry on using the paid for service
    2. As Skype made it a sign in option, then I am suspecting that there is going to be a decent percentage that will not reclaim it

Why is this there a secondary coup?

Now I’m not going to explore point A as ‘free’-as-a-service-or-product-starting-option here, essentially ‘it works’ for most, where as point B is worth exploring quickly, as Skype has leveraged the ‘offering the reward’, but made it a step the customer needs to make.

The secondary coup, is simple, it relies on the customer, I’m pretty sure there customers who not even be bothered to redeem it, but just by the emails deployment will be a win for Skype either way. Unlike Amazon with a useless email, gained nothing other than keeping the board happy.

Below is the email received, if you have not received a copy, noting I have removed the voucher code:

Skype-apology-voucher-email

Part 2: Leveraging more than one eBay ID

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If you’ve not read the first part, you can catch up on from this link How To: Selling on eBay with more than one eBay ID. I strongly suggest this before continuing.

Swear-Box

Response

The response I received yesterday was hilarious to the previous article, here are two quotes from my email:

“What the ***** are you doing Matt? You can’t give this **** away for free. What you doing man?”

“Mr Ogborne[This was him being sarcastic, I think], we’ve known each other a long time now, I’m not sure what you are trying to achieve on your blog, the information you have passed on, in the multiple Ebay accounts document,  is fundamental to our business, you cannot go around giving this away”

I’ve added several * to replace two words, I am sure you know what they are. I also received two phone calls and quite a funny text message. I’m sure I’ll get more, hence this article.

As I have said individually to these ‘what-were’ concerned parties, it really does not matter. It is in the application of the concept where the true skill is required and its in exactly this skill, the reason why it doesn’t matter if I let ideas like this into the wilds.

No-one is you and no-one else is me. Soundly in the knowledge of this, no-one can be me or you. We have out own DNA sets and out methods of thinking cannot be duplicated (unless you’re a sheep called Erma or something, but even then that’s not enough to duplicate thought processes). My point is we’re all unique. People can copy, but they cannot be you.

This is the reason why this site even exists, if it was not as kick up the rear by a good friend, I would not be sharing this information and storing it up, like I have done for years now.

Its in the Application of Ideas & Concepts

Exactly, it doesn’t matter that I have let loose an software salesman’s wet dream in to the wilds or what a collection of small, medium and large companies do to drive more sales. Once you run into existing application of this idea with your eyes wide open, it is then glaring apparent.

Its in knowing that you can leverage such an idea and then applying it to your own business. Its in the application of the concept where the skill of a person such as myself, really  matters.

I read recently in an article (bloody good read, see it here) about Zara, here is an extract from it relating to the non-on-line world:

Zara has opened, on average, a store a day for the last few years. Each store brings new footfall and new customers.
The strategy may be hard to execute but is simple to conceive. Footfall – a given of the physical world where rent equalsguaranteed visitors – needs to be sought and bought online. Retailers with offline brands clearly get a base level of traffic “for free” but if they don’t play in the online marketing world, they are simply leaving prospective customers for their competitors.

Can you see the logic behind this? Spelt out simply as an equation:

More Stores = More Sales

Now if you business model, franchise, whatever works, then all you are left with is scalability. Lets take some other examples McDonalds are everywhere, Coca-Cola is known world wide (and deploys product locally), Pizza Hut and so on…  Get the point?

So why would it not work on-line too? See its simple. You have proven your business model works, so why not duplicate it over and over?

Going back to my earlier concept breaker:

For the vast majority of manufactured goods, you are not the only company selling them, thus every single day, customers choose your competitors over you. There are an infinite number of reasons for this, timing, colour scheme, layout, description, title are a few factors.

Which again leads on to this pivotal statement:

So if you’re selling widgets, there are lots of other widget sellers for customers to choose from, so why not be one of the other widget sellers?

I feel its important to add here that straight business copies on eBay especially are blatantly obvious and add no value to either party. This is where the requirement for someone like myself steps in and provides the fresh thinking and the guidance on the deployment of them.

Some Words of Caution

Now this is where it would be irresponsible for me not to tell you the following points.

Amazon

The first has to be Amazon. Let me spell this out, as simply as I can:

Do not mess around with Amazon. Ever

Please , I beg you soak this in, here it is again:

Do not mess around with Amazon. Ever

Are we clear?

Amazon UK

You really do not want to be pissing off Amazon, I mentioned in an earlier article, these people are not eBay. eBay is a lapse in numerous areas and can be bent to ones own needs with the right influence. Yes, Amazon can be bent too with the right know how (sorry not giving this away publicly). But its a risk not worth taking.

You can, with Amazon’s say-so have more than one Amazon account, this is only allowed if you have two separate business identities, running in two different product groups, for example an outdoor furniture company and DVD & media business. But everything else, no.

As I have tried to hammer-home above, don’t even try it. Trying to get back on Amazon is a nightmare, I’ve seen sellers booted numerous times, in almost 10 years, I’v seen maybe three get back on again, you need a golden contact list and a bloody good reason.

Software Tools

If you try and do this manually using ‘turd lister’ (thats ‘turbo lister’ to everyone else) you will quickly exhaust yourselves. I saw an elaborate system using excel once, it was pretty food too, but yep that failed as well.

You really need the use of a software product, I’m not mentioning names here (for once), but the tool has to be scalable, just like the concept I have been describing.

Recently I have come to the conclusion that one tool is not enough, when you start to factor in all the different aspects that a business requires. I have plans to elaborate on this in the future, so stopping line of thought here.

eBay Policy

eBay UK LogoI did indicate above that eBay is more lapse, they have been tightening up on the poorer deployments of this concept with policy changes to drive down the number of duplicates. Quite rightly so I hasten to add, some have been shockingly bad with no ‘unique selling angles what-so-ever’.

The USA got slapped pretty hard in the October update, see this article eBay: Doing ‘Whatever is Needed’ to Keep the Seller Entertained, while the UK got off quite lightly and at a far better time of the year.

Its because of the intrinsic flaw of the way eBay was/is designed, which allows this concept to be deployed at all. Each seller is allowed to design their own mini-page per product, so every listing is different.

Note: Yes I know about GPS etc… blah blah blah

Final Words

With the right implementation of the concept, you can tackle your niche from at least two more angles, depending on the business, it can go a lot further than just two more times.

This is really where the skill of a person like myself comes in and why clients like the ones that emailed me should not be concerned (and no longer are I hasten to add). Its the combination of your business, unique skills, a fresh, independent look on the business, my skills & experience that can readily expand the areas the business can grow into, without any new knowledge and leveraging existing information and processes.

To understand a little more why this blog even exists and where this knowledge comes from, see ‘Project Matthew Ogborne‘.

From Amazon MD Brian McBride – ‘Information about your Christmas order’

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Amazon UK

Quite a well thought out email from the MD of Amazon, Brian McBride.

Dear Customer,

Ensuring that you receive your order in time for Christmas is our number one priority.

The recent weather conditions have resulted in backlogs across the entire UK for our delivery partners, but we are in constant communication with them and are working around the clock to make sure that orders with an estimated delivery time before December 24, arrive in time for Christmas.

We are currently experiencing an increased volume of e-mails and phone calls into our customer service centre. This is causing delays to our usual speed of response but rest assured, we are working through all enquiries in order of receipt.

There are some useful self-service links that allow you to see the details of your order and its current status. You can access these by visiting Your Account.

If your order has already been dispatched via a trackable method, please use the tracking information on your confirmation e-mail or in ‘Your Account’ to track your delivery via the relevant carrier website.

If your order was dispatched via a non-trackable method, please rest assured that your item is on its way to you now.

If your order has not yet been dispatched please check ‘Your Account’ regularly where you will find the most up-to-date information regarding dispatch dates and estimated delivery dates.

We appreciate your patience and understanding.

With kind regards,
Brian McBride
Managing Director, Amazon.co.uk

An Apology Needed?

Interestingly there is no apology for the delays in the contents of the mail, maybe there is no need to ‘apologise’. If someone apologises, does it make them appear at fault or perhaps just sympathetic to the customers issue? Me, I’d rather apologise, even if it is the fault of others.

A Part of the Selling Process

Ultimately the delivery and does impact the impression of Amazon and any other company that uses a third party to despatch goods to customers. When an item arrives, the speed, cost and security of the delivery are all factors that greatly impact the overall impression of the company the product was sourced from.

Ask yourself this:

Next time you receive an item from say Amazon, eBay or where-ever, try and summarise the service in a few words, just like feedback.

Now I bet you instantly thought about the delivery part of the product, the second you went to write this, the actual item and its condition, is normally always secondary.

Understanding

I do appreciate the mail, two books I ordered are outstanding, one from Amazon and another from bookdepository, I’m not that cheesed as I’ve got plenty (11 to be precise) other books to read over the Christmas period and I can also see this delay from multiple perspectives. But normal customers really don’t give a dam and want their items NOW.

So with that in mind, nice email, but its a fail & too late.

Difference

Always a question that goes through my mind when looking at anything, What would I have done different to better what I am considering? In this case, bribery is the instant reaction, coupled with an apology.

Not wanting to linger on the apology bit too much, but the delivery part is a part of the selling process and it does form part of the ‘entire’ sale. If part of the process is failing, be a man and apologise, being humble always throws the other party off.

The inclusion of a say a £1.00 voucher would have been nice, free expedited shipping for non Amazon prime customers on an order to use in the new year would have been (here comes that bloody awful set of words) win-win for customer and company, by getting the customer to return to the site, to undo the previous possibly poor experience and get a bonus sale at the same time.

Migrating Internal IT Apps to Amazon Web Services Webinar Tonight @6PM GMT

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This caught my attention a few days back & I’m looking forward to attending, the details and link is below:

Attend this webinar and learn how Amazon.com, as a customer of AWS, migrated their own internal IT applications to the cloud. Jon Jenkins, Director of Corporate Applications, will talk about best practices for migrating to the AWS cloud, including how his team evaluated the cloud services, how they got started, and where they are today with more than 50 internal applications running on AWS. In addition, JJ will dive into three key application architectures: a video processing engine, BMC Remedy, and SharePoint on AWS.

Jon Jenkins is a Director in the Corporate Applications team at Amazon.com.  He is responsible for assuring that Amazon’s internal users have access to the tools and systems necessary to do their jobs.  Jon’s goal is to drive down the total cost of ownership of Amazon’s internal IT infrastructure while optimizing the productivity of Amazon’s employees.  During his six years at Amazon Jon has held leadership positions on many teams including: personalization, web site content optimization, and web site operations. Jon’s career in IT spans more than 20 years.

Registration Link: https://www2.gotomeeting.com/register/699644731

My #1 Pet Hate of Poor WebSite Design

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Residential Home

Brace yourself, this one drives me utterly nuts and once you realise what it is, it’ll drive you nuts too!

Its so simple, the top left logo on any website should be a link to the homepage.

Is this soooooo god-dam hard to do? No, its not.

eBay listings are prolific offenders at missing this simple navigation aid. The logo in the top left should be a link, is this not common web courtesy? Is this not such common practice that anyone and everyone expects the brand logo to be a link to the home page? Please mentally weld this into your mind:

Top left,
Link to the homepage

Annoyance In Action

Here, see this in action at http://www.camisera.co.uk/ and don’t think its limited to their website, bingo thier eBay listings are the same.

No logo in the Top Left?

Simple, do what I have done and sit a 1 pixel transparent image in the top left that covers the picture of the dead mosquito. Yes it is invisible, but anyone navigating up there will get the hand cursor and naturally click ‘home’ on it.

The Importance of ‘Home’

Home is like a website reset button, if you get lost you can always go ‘home’ and start again. I’ve seen people do this several times on a site until they get where they want to be, its also highly suggested that you have a bread crumb trail in the header somehwere too like:

You are here: Home » Market Places » Amazon » Amazon IS Human – They Make Mistakes Too!

Don’t make your browsers think, they are too scatty to be put off by bad design. Serve them common and easy on a simple well formed plate of website fodder.

Amazon IS Human – They Make Mistakes Too!

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Relish in this one, its the first time I have ever spotted a mistake by Amazon.

While checking to see where one of the books I ordered on the 5th was too, I noticed in my email an email relating to the new Jeans Store they are promoting.

After taking little look around, mainly to see if they were promoting anyone else other than their own stocked products, I spotted the first mistake I have ever seen on Amazon for one of their own products.

You can view the item here:
http://www.amazon.co.uk/gp/product/B0045OW8TS

Amazon Screen Shot

amazon-is-human

Amazon Makes Mistakes Too!

Spotted it yet? Here it is:

Size: #REF!

A common error in excel when the reference is not found.

Matthew’s Top Tip

You can stop mistakes like this by using the ISERROR() function in excel. Lets assume that we want to verify the source in cell B2 is not #REF! or similar (as this function catches far more than just #REF!).

In A2 we would use this little combination function:

=IF(ISERROR(B2),"An Error is Found","No Error Found")

In English this is:

If B2 has an error in it, do "An Error is Found" otherwise do "No Error Found"

See even Amazon can make mistakes too when it comes to data, although I must admit, from literally the hundreds of thousands of items I have seen on Amazon and help create for sellers on the platform, this is the first time I have seen Amazon make this mistake.

Thinking about it, it would be really easy for them to check the data being imported for common errors such as #N/A, #VALUE!, #REF!, #DIV/0!, #NUM!, #NAME? or #NULL and reject it (although if you take this suggestion, please add a decent error code as the Amazon error codes list are far from useful, saying ‘or another problem’ is not helpful at times *stamps feet*).