Latest / Selling on Giants: The eCommerce Marketplace Podcast / Amazon Ads Under Fire, Shipping Hikes & TikTok Fuels Amazon Sales

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Amazon Ads Under Fire, Shipping Hikes & TikTok Fuels Amazon Sales · Selling on Giants: The eCommerce Marketplace Podcast

• 0:00
  SPEAKER_00: Your fourth quarter promotion can look profitable today and lose money before the first holiday order ever reaches the customer.
• 0:07
  SPEAKER_00: This week, shipping costs are rising across every major carrier.
• 0:11
  SPEAKER_00: A new tariff dispute is creating cross-border risk.
• 0:15
  SPEAKER_00: Amazon's advertising auctions are facing a major legal challenge, and TikTok is creating demand that Amazon often captures.
• 0:24
  SPEAKER_00: These stories may look separate, but together they show how quickly margin disappears when brands manage each channel in isolation.
• 0:33
  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.
• 0:47
  SPEAKER_00: I'm Will Hare, co-founder of Belavix.
• 0:50
  SPEAKER_00: Every week we cut through the headlines and focus on the decisions brands need to make now.
• 0:54
  SPEAKER_00: Let's start with shipping, because every major carrier is moving in the same direction at the same time.
• 1:01
  SPEAKER_00: USPS has proposed an average holiday increase of approximately 6% across Priority Mail Express, Priority Mail, Ground Advantage, and Parcel Select.
• 1:12
  SPEAKER_00: Those rates are expected to begin October 4th and continue through January 17th, pending approval.
• 1:19
  SPEAKER_00: UPS starts applying additional handling and oversized package surcharges on September 27th.
• 1:25
  SPEAKER_00: Broader residential demand charges begin October 25th, and during the heaviest holiday period, the added charge reaches 75 cents per ground residential package, nearly$12 for additional handling, and more than$117 for large packages.
• 1:44
  SPEAKER_00: FedEx is following a similar schedule.
• 1:46
  SPEAKER_00: The important point is that these charges do not operate in isolation.
• 1:51
  SPEAKER_00: They can stack on top of fuel surcharges, residential fees, dimensional weight, delivery area charges, and whatever discount you are already giving the customer.
• 2:01
  SPEAKER_00: That creates the most risk for low-price products, oversized products, and packages traveling across multiple zones.
• 2:09
  SPEAKER_00: A free shipping offer that works in September can quietly destroy contribution margin in November.
• 2:16
  SPEAKER_00: This is also not just a direct-to-consumer problem.
• 2:20
  SPEAKER_00: It affects brands using seller-fulfilled Amazon offers, Walmart seller-fulfilled orders, TikTok shop, wholesale parcel shipping, and any fulfillment model where the brand absorbs the last mile cost.
• 2:33
  SPEAKER_00: Before finalizing fourth quarter promotions, recalculate contribution margin by package size, weight, carrier, and destination.
• 2:42
  SPEAKER_00: Look at the actual order economics, not an account-wide shipping average.
• 2:47
  SPEAKER_00: If one oversized product is responsible for most of the exposure, the answer may be a bundle, a higher free shipping threshold, a different fulfillment method, or a price adjustment.
• 2:58
  SPEAKER_00: Peak transportation pricing is no longer a temporary holiday surprise.
• 3:03
  SPEAKER_00: It is an annual cost that needs to be built into the plan.
• 3:07
  SPEAKER_00: And shipping is only one part of the landed cost problem.
• 3:10
  SPEAKER_00: Canada has announced retaliatory tariffs on approximately$20 billion in annual imports from the United States.
• 3:20
  SPEAKER_00: The tariffs are scheduled to take effect September 8th, with rates ranging from 15% to 50% across hundreds of product categories.
• 3:30
  SPEAKER_00: The list includes steel, aluminum, furniture, electronics, prepared foods, cosmetics, household goods, agricultural equipment, and selected outdoor products.
• 3:41
  SPEAKER_00: For brands selling through Amazon Canada, Walmart Canada, distributors, retailers, or direct shipping, the immediate question is not whether the company is American.
• 3:52
  SPEAKER_00: The real question is the legal country of origin for each product.
• 3:57
  SPEAKER_00: A product can ship from a United States warehouse without legally qualifying as United States origin.
• 4:04
  SPEAKER_00: It can also be assembled somewhere else and receive different treatment depending on where the substantial transformation occurred.
• 4:11
  SPEAKER_00: That is why the tariff review needs to happen at the product level.
• 4:16
  SPEAKER_00: Ask the customs broker or importer of record to map exposure by SKU and classification code.
• 4:23
  SPEAKER_00: Then review inventory already in transit, September promotions, wholesale agreements, and marketplace pricing.
• 4:31
  SPEAKER_00: The purchase order may already be complete, but if the product clears customs after the effective date, the final landed cost can still change.
• 4:40
  SPEAKER_00: North American expansion can no longer be treated like a simple extension of the domestic business.
• 4:47
  SPEAKER_00: Canada requires the same classification, origin, margin, and compliance planning brands already expect when sourcing overseas.
• 4:56
  SPEAKER_00: While those costs are moving upward, the customer journey is becoming more fragmented.
• 5:01
  SPEAKER_00: New consumer research suggests that when a product gains traction on TikTok, the resulting Amazon sales can reach one and a half to three times the brand's TikTok shop volume.
• 5:12
  SPEAKER_00: That makes sense when you look at where shoppers prefer to complete the purchase.
• 5:17
  SPEAKER_00: Fewer than 10% selected TikTok shop as their preferred destination after discovering a product through social content.
• 5:26
  SPEAKER_00: Nearly 49% selected Amazon.
• 5:30
  SPEAKER_00: TikTok may create the desire, but Amazon still provides the familiar checkout, prime delivery, reviews, price comparison, and trust that help the customer finish the decision.
• 5:41
  SPEAKER_00: This means brands are probably undervaluing TikTok when they judge it only through TikTok shop sales.
• 5:48
  SPEAKER_00: Some of the return appears later through Amazon branded searches, sessions, organic sales, and stronger advertising conversion.
• 5:57
  SPEAKER_00: It also means Amazon advertising can receive credit for demand it did not create.
• 6:01
  SPEAKER_00: If creator content takes off on TikTok and branded Amazon sales rise, that does not automatically mean the branded advertising campaign suddenly became more effective.
• 6:11
  SPEAKER_00: The campaign may simply be harvesting traffic created somewhere else.
• 6:16
  SPEAKER_00: Brands need to compare TikTok content spikes with Amazon search activity, sessions, conversion, and branded sales.
• 6:23
  SPEAKER_00: Price parity also matters.
• 6:25
  SPEAKER_00: More than one-third of shoppers who abandoned a TikTok purchase said they wanted to compare prices elsewhere, and another large group found a better offer.
• 6:34
  SPEAKER_00: If the Amazon price, coupon, reviews, or delivery promise is stronger, the shopper has a very good reason to leave TikTok and buy from Amazon instead.
• 6:44
  SPEAKER_00: Amazon understands this behavior, which helps explain why it is now offering eligible sellers 35% off standard and expedited multi-channel fulfillment rates for TikTok shop orders.
• 6:57
  SPEAKER_00: The promotion lasts 12 months and allows brands to use the same inventory for Amazon FBA and TikTok shop.
• 7:04
  SPEAKER_00: That can reduce the forecasting risk created when a creator suddenly drives an unexpected order spike.
• 7:10
  SPEAKER_00: But model the economics after the discount ends.
• 7:14
  SPEAKER_00: A fulfillment structure that works with a 35% subsidy can become unattractive once standard pricing returns.
• 7:22
  SPEAKER_00: Amazon is helping sellers fulfill TikTok orders because Amazon does not need to own every transaction.
• 7:29
  SPEAKER_00: It can still make money by becoming the infrastructure underneath the transaction.
• 7:34
  SPEAKER_00: This kind of cross-platform complexity is exactly where brands begin losing control of the operating plan.
• 7:42
  SPEAKER_00: One team owns TikTok, another team owns Amazon, finance sees separate reports, and nobody can explain where the demand started or which channel actually created the profit.
• 7:54
  SPEAKER_00: At Bellavics, we have helped brands sell more than$500 million on Amazon.
• 8:00
  SPEAKER_00: And as a verified ad partner, we focus on hands-on strategies that turn marketplace complexity into a clear operating plan.
• 8:09
  SPEAKER_00: If your team has data but still struggles to decide what to do next, visit Bellovic.com.
• 8:15
  SPEAKER_00: Now, we need to talk about the cost of visibility on Amazon because the Federal Trade Commission and 22 states have filed a lawsuit challenging the mechanics inside Amazon search advertising auctions.
• 8:29
  SPEAKER_00: The complaint alleges that Amazon used undisclosed minimum pricing adjustments for approximately seven years, affecting more than 1 million brands and sellers and generating tens of billions of dollars in additional advertising costs.
• 8:45
  SPEAKER_00: These are allegations.
• 8:46
  SPEAKER_00: The case has not been decided.
• 8:48
  SPEAKER_00: Amazon advertising continues operating normally, and there is currently no compensation process for advertisers.
• 8:56
  SPEAKER_00: So this is not a reason to shut down campaigns heading into the fourth quarter.
• 9:01
  SPEAKER_00: That would be an emotional reaction to a legal filing, not an operating decision.
• 9:06
  SPEAKER_00: The reason this matters is transparency.
• 9:09
  SPEAKER_00: Advertisers participate in an auction, but they have limited visibility into the mechanisms that determine the final clearing price.
• 9:17
  SPEAKER_00: Sellers usually assume rising cost per click comes from competition, seasonality, or aggressive bidding.
• 9:24
  SPEAKER_00: If the allegations are proven, the platform's own pricing controls may also be part of that equation.
• 9:30
  SPEAKER_00: For now, preserve historical advertising reports and billing data.
• 9:34
  SPEAKER_00: Keep making decisions based on conversion, tacos, contribution profit, and incrementality.
• 9:42
  SPEAKER_00: Then watch for changes to auction disclosures, billing practices, or potential advertiser remedies.
• 9:49
  SPEAKER_00: The larger issue is that retail media has become too important to remain a black box forever.
• 9:56
  SPEAKER_00: When paid placement becomes necessary to maintain organic visibility, the platform is no longer selling optional advertising.
• 10:06
  SPEAKER_00: It is setting the price of access to the customer.
• 10:10
  SPEAKER_00: Amazon is also turning delivery speed into another paid growth lever.
• 10:14
  SPEAKER_00: Selected FBA sellers can now submit a maximum per unit bid to place additional products into Amazon's sub-same day network.
• 10:23
  SPEAKER_00: Amazon says products in the network can generate 12% higher sales than products receiving standard FBA delivery in eligible areas.
• 10:34
  SPEAKER_00: A 12% sales increase sounds attractive, but sales lift is not the same as incremental profit.
• 10:40
  SPEAKER_00: Some of those customers may have purchased with standard prime delivery anyway.
• 10:44
  SPEAKER_00: In that situation, the seller pays an additional fee for an order that was already going to convert.
• 10:51
  SPEAKER_00: Test this only on products with strong margins, stable inventory, and a real speed sensitive use case.
• 10:58
  SPEAKER_00: Measure incremental units and contribution profit, not just the change in top line sales.
• 11:05
  SPEAKER_00: Delivery speed is becoming paid merchandising.
• 11:08
  SPEAKER_00: Sellers already pay for the click, the placement, the fulfillment, and the promotion.
• 11:13
  SPEAKER_00: Now they may also pay for a stronger delivery promise.
• 11:17
  SPEAKER_00: There is at least one positive operational change on the seller-fulfilled side.
• 11:22
  SPEAKER_00: Amazon is narrowing the enforcement impact when an individual seller-fulfilled offer creates an account health risk.
• 11:30
  SPEAKER_00: Instead of immediately placing the broader account at risk, Amazon can deactivate the specific offer responsible for the problem while leaving healthy listings active.
• 11:41
  SPEAKER_00: That reduces the blast radius, but it does not make the violation harmless.
• 11:46
  SPEAKER_00: If the affected offer is a hero product or a major source of seasonal revenue, one deactivation can still hurt the entire business.
• 11:54
  SPEAKER_00: Low volume products are particularly vulnerable because only a few late shipments or cancellations can create a sharp percentage swing.
• 12:02
  SPEAKER_00: Monitor cancellation rate, late shipment rate, order defect rate, and on-time delivery at the offer level.
• 12:09
  SPEAKER_00: An acceptable account wide average can hide a product that is already approaching the limit.
• 12:15
  SPEAKER_00: The pattern across all of these changes is pretty clear.
• 12:18
  SPEAKER_00: Platforms and service providers are becoming more precise about where they charge, where they subsidize, and where they enforce.
• 12:27
  SPEAKER_00: Carriers charge more during the weeks when sellers have the least flexibility.
• 12:32
  SPEAKER_00: Amazon subsidizes TikTok fulfillment because it wants to own the infrastructure.
• 12:37
  SPEAKER_00: It offers faster delivery as a paid conversion lever, and it narrows enforcement to the individual offer while continuing to hold the seller accountable.
• 12:47
  SPEAKER_00: The mistake is looking at each update as a separate announcement.
• 12:51
  SPEAKER_00: The operator sees one connected system.
• 12:54
  SPEAKER_00: Shipping affects promotion economics, tariffs affect landed cost, TikTok affects Amazon demand, advertising affects discoverability, delivery speed affects conversion, account health determines whether the offer remains available at all.
• 13:11
  SPEAKER_00: That is the real job heading into the fourth quarter.
• 13:14
  SPEAKER_00: Do not optimize each platform in isolation.
• 13:17
  SPEAKER_00: Build one operating plan that explains where demand comes from, what it costs to fulfill, and how much profit remains after every platform takes its share.
• 13:28
  SPEAKER_00: That is it for this week's news and updates.
• 13:31
  SPEAKER_00: If this episode helps you prepare for the fourth quarter, subscribe to Selling on Giants and share it with another operator who needs to hear it.
• 13:38
  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.
• 13:48
  SPEAKER_00: I appreciate you spending part of your week with me.
• 13:51
  SPEAKER_00: I'm Will Hare, and this is Selling on Giants.
• 13:55
  SPEAKER_00: Stay focused, protect the margin, and keep building forward.