Latest / Selling on Giants: The eCommerce Marketplace Podcast / Amazon’s $20B Ad Fight, Good Good Golf Melts Down & Walmart’s Chicken Purse

Transcript

Amazon’s $20B Ad Fight, Good Good Golf Melts Down & Walmart’s Chicken Purse · Selling on Giants: The eCommerce Marketplace Podcast

• 0:00
  SPEAKER_00: For years, Amazon advertisers have been told that the cost of a click reflects competition inside an auction.
• 0:07
  SPEAKER_00: The Federal Trade Commission is now alleging that explanation was incomplete and that Amazon quietly inserted its own pricing floor, causing more than 1 million advertisers to pay over$20 billion in additional costs.
• 0:21
  SPEAKER_00: That is not just another Amazon lawsuit, it is a challenge to the mechanics behind the numbers sellers have been optimizing against for years.
• 0:30
  SPEAKER_00: Welcome back to Selling on Giants, the podcast where we break down what is changing across Amazon, Walmart, TikTok Shop, and the broader e-commerce marketplace, then explain what it actually means for the operators responsible for growth and profitability.
• 0:46
  SPEAKER_00: I'm Mr.
• 0:47
  SPEAKER_00: Will, host of the Selling on Giants podcast.
• 0:50
  SPEAKER_00: Every week we cut through the headlines and focus on the decisions brands need to make now.
• 0:56
  SPEAKER_00: This week, we are looking at Amazon's advertising auctions, new insurance requirements, another round of fourth quarter cost pressure, the nationwide rollout of Alexa Plus, Sephora's move into TikTok shop, and two very different examples of what happens when a brand turns internet attention into retail impact.
• 1:17
  SPEAKER_00: Let's begin with the Federal Trade Commission and the 22 state attorneys general now suing Amazon over its advertising practices.
• 1:25
  SPEAKER_00: The complaint focuses on sponsored products, sponsored brands, and sponsored display.
• 1:31
  SPEAKER_00: Regulators allege that approximately 1.2 million advertisers were overcharged by more than$20 billion through undisclosed reserve prices.
• 1:41
  SPEAKER_00: In a traditional second price auction, the highest bidder wins but pays slightly more than the second highest bid.
• 1:48
  SPEAKER_00: According to the complaint, Amazon sometimes replaced that second bid with an internally determined soft reserve price.
• 1:56
  SPEAKER_00: That allowed Amazon to increase the winning advertisers' cost per click without clearly disclosing that intervention.
• 2:03
  SPEAKER_00: Amazon is not accused of charging advertisers more than their maximum bids.
• 2:08
  SPEAKER_00: The allegation is that Amazon influenced how much of that bid advertisers paid by inserting its own valuation of the placement into the auction.
• 2:19
  SPEAKER_00: Amazon disputes the allegations.
• 2:21
  SPEAKER_00: The company says reserve prices are common in digital advertising.
• 2:25
  SPEAKER_00: Advertisers never paid more than they agreed to bid, and sponsored products' costs remained relatively flat after inflation between 2019 and 2024, while conversion rates improved.
• 2:39
  SPEAKER_00: There has been no court ruling, no announced change to the auctions, and no refund process.
• 2:45
  SPEAKER_00: The case could take years to resolve.
• 2:47
  SPEAKER_00: So, what should sellers actually do?
• 2:49
  SPEAKER_00: Do not shut down campaigns or make sweeping bid reductions because a lawsuit was filed, especially heading into the fourth quarter when visibility becomes more competitive.
• 3:00
  SPEAKER_00: Preserve historical campaign, search term, placement, cost per click, and billing reports, with particular attention to Prime Day, Black Friday, Cyber Monday, and other high volume periods.
• 3:14
  SPEAKER_00: Then continue managing against what can be measured today, including conversion, contribution profit, a cost, tacos, and total sales performance.
• 3:24
  SPEAKER_00: The lawsuit does not make advertising data useless.
• 3:27
  SPEAKER_00: It challenges the assumption that every increase in cost per click reflects another advertiser bidding more aggressively.
• 3:34
  SPEAKER_00: Amazon operates the marketplace, sells the advertising, designs the auction, controls the reporting, and competes for the same retail customer.
• 3:44
  SPEAKER_00: Advertisers deserve enough transparency to understand how the price of access is being determined.
• 3:51
  SPEAKER_00: A lawsuit does not change what sellers should bid tomorrow.
• 3:54
  SPEAKER_00: It may change what platforms are eventually required to disclose.
• 3:59
  SPEAKER_00: That question of marketplace access also appears in Amazon's new commercial liability insurance requirements.
• 4:06
  SPEAKER_00: Beginning November 2nd, sellers with products in categories subject to enhanced safety requirements must carry at least$1 million in commercial liability insurance.
• 4:18
  SPEAKER_00: That applies regardless of whether the seller reaches Amazon's existing threshold of$10,000 in monthly gross proceeds.
• 4:28
  SPEAKER_00: The affected categories include children's products, cosmetics, ingestible products, and products containing lithium batteries, although Amazon says the requirement is not limited to that list.
• 4:41
  SPEAKER_00: This turns insurance into a product level condition of marketplace access.
• 4:46
  SPEAKER_00: A smaller brand with one qualifying product can now face the same minimum requirement as an account doing millions in annual sales.
• 4:55
  SPEAKER_00: Sellers based in mainland China also need to obtain new policies through Amazon Insurance Accelerator beginning November 2nd.
• 5:05
  SPEAKER_00: Existing third-party policies can remain in place until they expire.
• 5:10
  SPEAKER_00: Do not wait for an Amazon warning.
• 5:12
  SPEAKER_00: Identify every product that may fall into an enhanced safety category, confirm that the insurance covers the actual products being sold, and make sure the legal business name matches the seller central account.
• 5:26
  SPEAKER_00: Once the products are compliant, the next challenge is protecting fourth quarter margin.
• 5:30
  SPEAKER_00: Canada's new counter tariffs take effect September 8th.
• 5:34
  SPEAKER_00: The measures apply rates of 15, 25, or 50% across$27.6 billion in goods originating from the United States.
• 5:44
  SPEAKER_00: The applicable rate depends on the product's tariff classification, and country of origin matters more than the warehouse location.
• 5:52
  SPEAKER_00: A product shipping from a United States warehouse is not necessarily covered if it originated elsewhere.
• 5:59
  SPEAKER_00: Moving a United States origin product through another country does not automatically eliminate the tariff.
• 6:06
  SPEAKER_00: Review Canadian sales by product and confirm the classification code, country of origin, importer of record, and responsibility for the duty.
• 6:16
  SPEAKER_00: Then recalculate landed margin before accepting more orders.
• 6:21
  SPEAKER_00: The tariff exposure arrives as every major parcel carrier prepares to increase holiday prices.
• 6:27
  SPEAKER_00: Amazon Shipping is joining USPS, UPS, and FedEx in applying peak season surcharges.
• 6:33
  SPEAKER_00: Its holiday window begins October 25th and continues through January 16th of next year.
• 6:39
  SPEAKER_00: Amazon shipping adds 50 cents per package during the early holiday window and 75 cents during the heaviest period.
• 6:47
  SPEAKER_00: Additional handling and oversized package charges climb much higher.
• 6:52
  SPEAKER_00: The base fee may be manageable.
• 6:54
  SPEAKER_00: The dimensional charges are where margin can disappear.
• 6:57
  SPEAKER_00: Amazon shipping joining the increase also closes off an obvious escape route.
• 7:03
  SPEAKER_00: Self-fulfilled sellers cannot assume that moving volume between carriers automatically avoids peak pricing.
• 7:10
  SPEAKER_00: Every major parcel option is treating the holidays as a separate cost period.
• 7:15
  SPEAKER_00: Walmart adds another layer through its extended holiday return window.
• 7:20
  SPEAKER_00: Most eligible marketplace products purchased from October 1st through December 31st remain returnable through January 31st.
• 7:29
  SPEAKER_00: An item purchased in early October can remain returnable for almost four months.
• 7:35
  SPEAKER_00: By the time it comes back, the packaging may be opened, seasonal demand may be gone, and the product may no longer be slable at its original price.
• 7:44
  SPEAKER_00: Brands with high return rates should not judge holiday profitability from November and December revenue.
• 7:51
  SPEAKER_00: Some of the real cost will not appear until January or February.
• 7:55
  SPEAKER_00: Update the forecast to include carrier surcharges, tariff exposure, promotional discounts, and a larger return reserve.
• 8:04
  SPEAKER_00: Fourth quarter revenue is exciting, but revenue that returns in January after the margin has already been spent is not growth.
• 8:13
  SPEAKER_00: While costs and compliance determine whether a product can compete, artificial intelligence is beginning to influence whether it enters the customer's consideration set at all.
• 8:23
  SPEAKER_00: Amazon has completed the United States rollout of Alexa Plus and included unlimited access with Prime.
• 8:30
  SPEAKER_00: That puts Amazon's generative assistant in front of a much larger audience across Echo devices, the Alexa app, and the Alexa website.
• 8:40
  SPEAKER_00: Amazon reports that more than 350 million shoppers used Alexa for shopping during the previous 12 months, and that those users spent approximately 40% more per order than shoppers who did not use it.
• 8:54
  SPEAKER_00: Those are Amazon's figures, so I would treat them as directional.
• 8:57
  SPEAKER_00: But the behavior matters.
• 8:59
  SPEAKER_00: A customer can describe a problem, ask for a recommendation, compare products, and narrow the decision before ever viewing a conventional search results page.
• 9:09
  SPEAKER_00: That makes complete attributes, compatibility details, intended use cases, review quality, and catalog consistency more important.
• 9:18
  SPEAKER_00: AI cannot confidently recommend information the brand never provided.
• 9:23
  SPEAKER_00: There is no confirmed Alexa Plus optimization tool, and there is no secret Alexa algorithm sellers can manipulate.
• 9:31
  SPEAKER_00: Anyone selling that service right now is getting ahead of the evidence.
• 9:35
  SPEAKER_00: The practical work is straightforward.
• 9:37
  SPEAKER_00: Make sure Amazon can clearly understand who the product is for, what problem it solves, what is included, how it is used, and how it differs from the alternatives.
• 9:48
  SPEAKER_00: Target is using AI differently.
• 9:50
  SPEAKER_00: It is focused on completing the basket.
• 9:53
  SPEAKER_00: Target says customers who create back-to-school wish lists generate approximately 45% more demand within the category.
• 10:02
  SPEAKER_00: Its AI recommends items that may be missing based on browsing behavior, previous purchases, school requirements, and similar customer activity.
• 10:12
  SPEAKER_00: That is a more useful example of AI commerce than another chatbot sitting in the corner of a website.
• 10:19
  SPEAKER_00: Target is trying to understand the complete shopping mission.
• 10:22
  SPEAKER_00: A notebook may be recommended because of the other supplies on the list, even if the customer never specifically searched for it.
• 10:31
  SPEAKER_00: For brands, the opportunity is not only ranking for a keyword, it is helping the retailer understand which products logically belong together.
• 10:40
  SPEAKER_00: That same shift toward curated discovery is showing up on TikTok Shop.
• 10:44
  SPEAKER_00: Sephora begins piloting its United States TikTok Shop experience on September 19th.
• 10:50
  SPEAKER_00: The Sephora Drop Shop will feature monthly product launches supported by teasers, creator content, interactive experiences, and live reveals.
• 10:59
  SPEAKER_00: Some products will initially be available exclusively through TikTok shop before moving to Sephora's website, physical stores, or other retail partners.
• 11:09
  SPEAKER_00: This is not Sephora uploading its entire catalog to another marketplace.
• 11:14
  SPEAKER_00: It is using channel exclusivity to combine entertainment, product discovery, scarcity, and checkout in one coordinated launch.
• 11:23
  SPEAKER_00: Participating brands gain reach, but Sephora determines which products receive access while TikTok controls the discovery environment.
• 11:32
  SPEAKER_00: Brands need to understand the inventory commitment, creative control, reporting access, promotional calendar, and what happens to pricing after the exclusivity period ends.
• 11:44
  SPEAKER_00: Social attention can build distribution quickly.
• 11:47
  SPEAKER_00: It can also destroy it quickly when the content operation lacks adult supervision.
• 11:52
  SPEAKER_00: Good golf is now dealing with that lesson.
• 11:54
  SPEAKER_00: The brand published an advertisement showing a male personality shoving a female employee while promoting a Callaway driver.
• 12:02
  SPEAKER_00: The ad was deleted, but the commercial fallout continued.
• 12:06
  SPEAKER_00: Callaway ended the partnership and committed$1 million to organizations addressing violence against women.
• 12:13
  SPEAKER_00: Dix Sporting Goods and Golf Galaxy removed Good Good merchandise.
• 12:18
  SPEAKER_00: The company withdrew from a PGA tour sponsorship.
• 12:22
  SPEAKER_00: Golf Channel canceled a planned reality series, and Good Goods chief executive officer and president left the business.
• 12:29
  SPEAKER_00: That is not simply social media backlash, that is distribution risk.
• 12:34
  SPEAKER_00: One piece of content affected retail placement, an equipment partnership, sponsorship visibility, media distribution, and senior leadership within days.
• 12:44
  SPEAKER_00: Influencer brands are becoming real consumer product companies, but their content operations do not always mature at the same speed as their distribution.
• 12:54
  SPEAKER_00: If a campaign involves creators, retailers, or licensing partners, the final approval process cannot live with one person who thinks the content is funny.
• 13:04
  SPEAKER_00: Contracts need conduct standards, content approval rights, takedown requirements, and termination provisions.
• 13:11
  SPEAKER_00: Retailers can move faster than a traditional crisis response because they are protecting their own customer relationships.
• 13:19
  SPEAKER_00: By the time the brand finishes debating what to do, the product may already be removed.
• 13:25
  SPEAKER_00: To end on a lighter example of attention turning into retail impact, Walmart transformed its rotisserie chicken into a limited edition purse.
• 13:35
  SPEAKER_00: The purse launched at$5.97, the same price as the actual chicken, and sold out within hours.
• 13:44
  SPEAKER_00: It then appeared on resale marketplaces for several times the original price.
• 13:49
  SPEAKER_00: The campaign worked because Walmart started with a recognizable product customers already buy, joke about, and discuss online.
• 13:58
  SPEAKER_00: The packaging was familiar, the price reference made sense, and the limited supply created urgency.
• 14:05
  SPEAKER_00: The lesson is not that every brand needs to turn its hero product into a purse.
• 14:10
  SPEAKER_00: The lesson is that cultural marketing works best when it builds on customer affection that already exists.
• 14:17
  SPEAKER_00: Good, good golf and Walmart both created attention, but only one strengthened the relationship between the brand, its retail partners, and its customers.
• 14:27
  SPEAKER_00: That difference is judgment.
• 14:28
  SPEAKER_00: And judgment is the common thread across every update this week.
• 14:32
  SPEAKER_00: Amazon's advertising lawsuit raises questions about who sets the price of visibility.
• 14:38
  SPEAKER_00: Insurance requirements determine who can remain on the platform.
• 14:42
  SPEAKER_00: Tariffs, shipping surcharges, and returns decide whether holiday revenue becomes profit.
• 14:48
  SPEAKER_00: AI assistants influence which products enter consideration, and social content can either build distribution or wipe it out.
• 14:56
  SPEAKER_00: The operator's job is to connect those decisions before the marketplace connects them for you.
• 15:02
  SPEAKER_00: That is it for this week's news and updates.
• 15:05
  SPEAKER_00: If this episode helps you make a better marketplace decision, subscribe to Selling on Giants and share it with another operator who would find it useful.
• 15:15
  SPEAKER_00: Wherever you are tuning in, please take a moment to leave us a rating and review so the Apple Podcast gods can show us a little grace and help more people discover the show.
• 15:26
  SPEAKER_00: I appreciate you spending part of your week with me.
• 15:28
  SPEAKER_00: I'm Mr.
• 15:29
  SPEAKER_00: Will, and this is Selling on Giants.
• 15:31
  SPEAKER_00: Stay focused, protect the margin, and keep building forward.