Latest / Selling on Giants: The eCommerce Marketplace Podcast / Amazon Inventory Pressure, AI Shopping, and Why Retail Media Is Becoming Shelf Space

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Amazon Inventory Pressure, AI Shopping, and Why Retail Media Is Becoming Shelf Space · Selling on Giants: The eCommerce Marketplace Podcast

• 0:00
  SPEAKER_00: Welcome back to Selling on Giants.
• 0:02
  SPEAKER_00: This is the show where we break down what is actually happening across Amazon, Walmart, retail media, and e-commerce.
• 0:10
  SPEAKER_00: And more importantly, what it means when you are responsible for the PL and every operational decision eventually shows up in performance.
• 0:19
  SPEAKER_00: This week the stories may look separate at first glance, but they are all pointing in the same direction.
• 0:25
  SPEAKER_00: Amazon is becoming less forgiving around operational inefficiency.
• 0:30
  SPEAKER_00: Retail media is becoming a required cost of visibility.
• 0:34
  SPEAKER_00: AI is changing how products are discovered, and marketplaces are turning infrastructure into the real competitive advantage.
• 0:42
  SPEAKER_00: That is the theme today.
• 0:43
  SPEAKER_00: The brands that win from here are not necessarily the ones doing the most.
• 0:48
  SPEAKER_00: They are the ones operating the cleanest.
• 0:51
  SPEAKER_00: Let's start with inventory, because Amazon is promoting FBA liquidations more aggressively, and that tells you something about where the pressure is building.
• 1:01
  SPEAKER_00: The program gives sellers a way to recover some value from excess, idle, unfulfillable, or customer-returned inventory instead of paying to remove or dispose of it.
• 1:14
  SPEAKER_00: On paper, that sounds helpful, and in some cases it is.
• 1:18
  SPEAKER_00: But let's not pretend this is some generous recovery program.
• 1:22
  SPEAKER_00: Sellers typically recover around 5-10% of average selling price before fees, which means the real benefit is usually not the recovery itself.
• 1:32
  SPEAKER_00: The real benefit is stopping storage fees, aged inventory surcharges, and the slow financial bleed that comes from inventory that should not be sitting in FBA anymore.
• 1:43
  SPEAKER_00: This is Amazon acknowledging what a lot of sellers already feel.
• 1:47
  SPEAKER_00: Inventory discipline is getting harder and the cost of being wrong is getting higher.
• 1:52
  SPEAKER_00: Slower discretionary spending, aggressive catalog expansion, forecasting misses, returns pressure, storage fees, and aged inventory charges all stack together.
• 2:03
  SPEAKER_00: If you are sitting on slow-moving seasonal inventory, apparel, trend-driven products, slow supplements, or a catalog that expanded faster than demand, liquidation may be the least painful option.
• 2:15
  SPEAKER_00: But that is the key phrase.
• 2:22
  SPEAKER_00: The better operator lesson is upstream.
• 2:25
  SPEAKER_00: Do not let the inventory get that far out of position in the first place.
• 2:30
  SPEAKER_00: Tighten forecasting, protect cash flow, focus on faster turning SKUs, and stop expanding into low velocity products just because they look good in a product research tool.
• 2:43
  SPEAKER_00: Amazon is becoming less forgiving toward inventory inefficiency, and sellers who manage inventory tightly will have more flexibility when the market gets choppy.
• 2:54
  SPEAKER_00: That connects directly to the next update, which is Amazon's revised buyer satisfaction scoring for self-fulfilled sellers.
• 3:01
  SPEAKER_00: Amazon replaced the old yes or no survey with a 1 to 5 satisfaction rating, where one and two count as dissatisfied, four and five count as satisfied, and threes are treated as neutral.
• 3:14
  SPEAKER_00: This applies to self-fulfilled sellers managing their own customer service, and the metrics are tied to buyer contact rate, average response time, and buyer dissatisfaction rate.
• 3:26
  SPEAKER_00: At first, this sounds like better feedback, and it probably is, but it is also another layer of operational measurement.
• 3:33
  SPEAKER_00: Amazon is making the post-purchase experience more visible, more benchmarked, and more comparable across sellers.
• 3:41
  SPEAKER_00: For FBM brands, this means customer service is not just support overhead anymore.
• 3:46
  SPEAKER_00: It is an operational KPI.
• 3:48
  SPEAKER_00: The benchmarks are aggressive too.
• 3:50
  SPEAKER_00: Amazon is showing top buyer contact rates around 0.57% or better, top dissatisfaction rates around 0.2% or better, and top response times under 6 hours.
• 4:03
  SPEAKER_00: Those are not casual targets.
• 4:05
  SPEAKER_00: Those are operational standards.
• 4:07
  SPEAKER_00: If you are using FBM, this is the time to look closely at why customers contact you in the first place.
• 4:13
  SPEAKER_00: Are listings unclear?
• 4:15
  SPEAKER_00: Are instructions missing?
• 4:16
  SPEAKER_00: Are shipping expectations creating confusion?
• 4:19
  SPEAKER_00: Are certain SKUs generating repeat questions?
• 4:22
  SPEAKER_00: Are fulfillment issues creating avoidable contact?
• 4:26
  SPEAKER_00: The best way to improve customer service metrics is not just answering faster, it is reducing preventable confusion before the customer ever has to reach out.
• 4:38
  SPEAKER_00: Now let's move into compliance because Amazon is pushing intellectual property education again, and sellers should not dismiss this as another harmless seller university reminder.
• 4:49
  SPEAKER_00: Amazon is reinforcing guidance around trademarks, copyrights, patents, counterfeit complaints, sourcing authorization, brand registry, IP accelerator, account health, and proper documentation.
• 5:03
  SPEAKER_00: That matters because IP complaints remain one of the fastest ways to lose listings, suppress ASINs, and damage account health.
• 5:12
  SPEAKER_00: The hard part is that many IP issues are not intentional counterfeits.
• 5:17
  SPEAKER_00: They come from sloppy sourcing, unauthorized distribution, gray market inventory, trademark misuse in listing copy, or sellers listing against an ASIN they do not fully understand.
• 5:30
  SPEAKER_00: Amazon increasingly expects sellers to prove legitimacy proactively, not reactively.
• 5:36
  SPEAKER_00: That is a different operating standard.
• 5:38
  SPEAKER_00: If you sell branded products, you need clean invoices, authorization letters, distributor documentation, and a sourcing story that holds up under pressure.
• 5:49
  SPEAKER_00: If you own the brand, you should be enrolled in brand registry and have your documentation organized before there is a problem.
• 5:57
  SPEAKER_00: Once the complaint hits, you are already playing defense, and defense on Amazon is rarely where you want to be.
• 6:04
  SPEAKER_00: This is a broader signal that Amazon is moving more compliance responsibility onto sellers.
• 6:10
  SPEAKER_00: The platform protects rights owners first and then asks sellers to prove they belong.
• 6:16
  SPEAKER_00: That may not always feel fair, but it is the system.
• 6:19
  SPEAKER_00: Clean supply chains and structured documentation are becoming a competitive advantage.
• 6:25
  SPEAKER_00: Now, let's shift from compliance to platform economics because the older Amazon affiliate commission cuts are still worth talking about even years later.
• 6:34
  SPEAKER_00: Back in 2020, Amazon reduced commission rates across major categories, and for publishers, bloggers, influencers, and affiliate-driven businesses, that was a wake-up call.
• 6:46
  SPEAKER_00: Some categories saw commissions cut by more than half, and the message was pretty clear.
• 6:52
  SPEAKER_00: Amazon was not going to let third parties control too much of the demand economics.
• 6:57
  SPEAKER_00: The long-term effect is still shaping e-commerce today.
• 7:01
  SPEAKER_00: Creators and publishers had to diversify.
• 7:04
  SPEAKER_00: Brands started building more direct creator relationships.
• 7:08
  SPEAKER_00: Affiliate ecosystems outside of Amazon associates gained traction.
• 7:14
  SPEAKER_00: Tools and platforms around creator commerce, TikTok shop affiliate, Levanta, MetaCreator Partnerships, and first party attribution became more important because nobody wanted to be fully dependent on one platform's payout structure.
• 7:31
  SPEAKER_00: The operator lesson is simple.
• 7:33
  SPEAKER_00: Platforms eventually optimize for their own economics.
• 7:37
  SPEAKER_00: They may help you grow, but they are not in business to protect your margin.
• 7:42
  SPEAKER_00: If a platform controls the traffic, the transaction, the attribution, and the payout structure, you are renting leverage.
• 7:50
  SPEAKER_00: That does not mean you should avoid platforms.
• 7:53
  SPEAKER_00: It means you should diversify the systems that feed demand.
• 7:57
  SPEAKER_00: That is why Amazon's cancellation of planned SP API fees is also important.
• 8:03
  SPEAKER_00: Amazon was expected to introduce SP API usage fees in May 2026, but reversed course after pushback from sellers, agencies, and software providers.
• 8:15
  SPEAKER_00: That reversal matters because SP API powers so much of the operational layer sellers rely on, including reporting tools, inventory systems, advertising software, repricers, agency dashboards, and automation workflows.
• 8:32
  SPEAKER_00: If those fees had gone live in a meaningful way, the cost almost certainly would have flowed downstream to sellers and agencies.
• 8:41
  SPEAKER_00: SaaS costs would go up, smaller sellers would feel the pressure, agency margins would get tighter, and some automation workflows would become more expensive to maintain.
• 8:52
  SPEAKER_00: The reversal shows Amazon understands how dependent the seller ecosystem is on third-party infrastructure, even as it continues to pull more control into its own ecosystem.
• 9:02
  SPEAKER_00: So the takeaway is not great, nothing to worry about.
• 9:06
  SPEAKER_00: The takeaway is keep monitoring this.
• 9:08
  SPEAKER_00: Amazon is balancing control with ecosystem dependency, and that balance can shift at any time.
• 9:14
  SPEAKER_00: This is where I want to pause for a second, because this is exactly the kind of complexity that overwhelms brands.
• 9:22
  SPEAKER_00: Inventory rules, customer service benchmarks, IP compliance, affiliate economics, API access, retail media pressure, AI discovery, and marketplace infrastructure are all moving at the same time.
• 9:37
  SPEAKER_00: The problem is not that brands lack information.
• 9:41
  SPEAKER_00: The problem is that information does not become useful until someone turns it into priorities.
• 9:47
  SPEAKER_00: That is where Bellivix spends most of its time.
• 9:50
  SPEAKER_00: We help brands make sense of marketplace complexity and turn it into a clear operating plan.
• 9:56
  SPEAKER_00: Bellovics has helped brands generate over$500 million on Amazon, and we are a verified ad partner, but the real value is not the badge.
• 10:06
  SPEAKER_00: It is knowing what matters now, what can wait, and where the business is actually leaking margin or momentum.
• 10:12
  SPEAKER_00: Sometimes the issue is advertising, sometimes it is inventory, sometimes it is compliance, sometimes it is a catalog that got too wide without enough velocity.
• 10:22
  SPEAKER_00: The job is to find the constraint and fix the system around it.
• 10:26
  SPEAKER_00: If that is the kind of support your brand needs, visit Bellovics.com.
• 10:30
  SPEAKER_00: Now let's get into AI Discovery, because Etsy launched a Chat GPT-powered shopping experience.
• 10:38
  SPEAKER_00: And this is another signal that search behavior is moving away from exact keywords and toward natural language intent.
• 10:47
  SPEAKER_00: A shopper does not just search for blue ceramic mug anymore.
• 10:51
  SPEAKER_00: They can ask for something like a handmade coffee mug that feels rustic, minimalist, and giftable.
• 10:58
  SPEAKER_00: That changes how product discovery works.
• 11:01
  SPEAKER_00: This matters because keyword stuffing becomes less useful when AI is interpreting intent, aesthetics, use cases, and context.
• 11:11
  SPEAKER_00: Products need clear positioning, rich attributes, strong descriptive language, lifestyle relevance, and visuals that support what the product is supposed to mean to the customer.
• 11:22
  SPEAKER_00: AI is not just matching words, it is trying to understand what the shopper wants.
• 11:28
  SPEAKER_00: That connects to agentic marketplaces where AI agents may eventually compare products, evaluate reviews, analyze specs, recommend options, and potentially assist with transactions.
• 11:41
  SPEAKER_00: In that world, the customer may not be the only shopper anymore.
• 11:46
  SPEAKER_00: The AI agent becomes part of the buying process, and that means listings need to be understandable to machines as much as humans.
• 11:54
  SPEAKER_00: This is a major shift.
• 11:56
  SPEAKER_00: Today, many sellers optimize for human browsing, keyword matching, and visual conversion.
• 12:02
  SPEAKER_00: Tomorrow, they also need to optimize for machine interpretation.
• 12:06
  SPEAKER_00: That means structured data, complete attributes, clean product details, review consistency, pricing clarity, and trust signals become even more important.
• 12:17
  SPEAKER_00: Poor product data is not just messy, it becomes a competitive disadvantage.
• 12:23
  SPEAKER_00: Marketplaces are growing faster than broader e-commerce, and one of the reasons is infrastructure.
• 12:30
  SPEAKER_00: Payments, onboarding, seller workflows, payouts, compliance systems, and transaction management are becoming competitive advantages.
• 12:39
  SPEAKER_00: The platforms that make it easier to operate attract more sellers, more products, more buyers, and more transaction volume.
• 12:47
  SPEAKER_00: This is the part many people miss.
• 12:49
  SPEAKER_00: The winners in e-commerce increasingly own infrastructure, not just traffic.
• 12:54
  SPEAKER_00: Marketplaces are not valuable only because people shop there.
• 12:58
  SPEAKER_00: They are valuable because they manage payments, trust, fulfillment integrations, advertising, seller onboarding, financial workflows, and compliance at scale.
• 13:09
  SPEAKER_00: That operating layer is where leverage lives.
• 13:12
  SPEAKER_00: And this is why retail media keeps expanding.
• 13:15
  SPEAKER_00: Retailers are increasingly treating advertising as part of the cost of doing business.
• 13:21
  SPEAKER_00: Media spend is becoming connected to visibility, merchandising, discoverability, and competitive positioning.
• 13:28
  SPEAKER_00: The pay-to-play model is not slowing down.
• 13:32
  SPEAKER_00: If anything, it is becoming more embedded into retail operations.
• 13:37
  SPEAKER_00: That creates pressure for brands because advertising is no longer just a growth lever.
• 13:41
  SPEAKER_00: It is becoming shelf placement.
• 13:43
  SPEAKER_00: Retailers monetize attention, brands absorb the acquisition cost, and the math only works if the product converts well, inventory is available, pricing is disciplined, and contribution margin is understood.
• 13:56
  SPEAKER_00: If you only look at ROAS in isolation, you are going to miss the real economics.
• 14:01
  SPEAKER_00: Amazon is also pushing measurement further with self-service partner measurement studies.
• 14:07
  SPEAKER_00: This gives advertisers more direct access to performance reporting and attribution tools that were historically more available to larger or managed service advertisers.
• 14:19
  SPEAKER_00: That is directionally good, but more data does not automatically create better decisions.
• 14:25
  SPEAKER_00: It just creates more ways to be wrong with confidence if you do not know what you are looking at.
• 14:31
  SPEAKER_00: The best operators will use these tools to understand incrementality, media overlap, customer behavior, and contribution profit.
• 14:39
  SPEAKER_00: The weaker operators will add another report to the pile and still make the same decisions.
• 14:45
  SPEAKER_00: Measurement is becoming democratized, but interpretation is still the differentiator.
• 14:50
  SPEAKER_00: Now let's finish with the consumer because NRF data shows retail sales continued growing in April, but the message is not that the consumer is back to spending freely across everything.
• 15:01
  SPEAKER_00: The message is that the consumer is still spending, but more selectively.
• 15:07
  SPEAKER_00: Value matters, necessity matters, trusted brands matter, promotions matter, faster fulfillment matters.
• 15:14
  SPEAKER_00: That creates a split market.
• 15:16
  SPEAKER_00: Strong brands with clear positioning, disciplined inventory, and solid operations can still gain share.
• 15:23
  SPEAKER_00: Weak brands with sloppy execution feel pressure faster.
• 15:27
  SPEAKER_00: Growth is still available, but it is not evenly distributed, and inefficient operators are feeling the squeeze.
• 15:34
  SPEAKER_00: So when you connect all of this, the pattern is clear.
• 15:38
  SPEAKER_00: Amazon is becoming less forgiving toward inventory and compliance weakness.
• 15:42
  SPEAKER_00: Customer service is becoming more measurable.
• 15:45
  SPEAKER_00: Affiliate economics and API access remind us that platforms control the rules.
• 15:51
  SPEAKER_00: AI is changing product discovery.
• 15:54
  SPEAKER_00: Marketplaces are competing through infrastructure.
• 15:57
  SPEAKER_00: Retail media is becoming shelf placement.
• 16:00
  SPEAKER_00: Measurement is becoming more accessible, but also more complex.
• 16:05
  SPEAKER_00: The edge is not in hacks.
• 16:07
  SPEAKER_00: It is in execution, clean data, clear systems, and fast decisions.
• 16:12
  SPEAKER_00: If this episode helped you connect the dots, share it with someone on your team or another operator trying to make sense of the same shifts.
• 16:19
  SPEAKER_00: And if you are getting value from the show, take a second to leave a review so more sellers can find selling on giants and stay ahead of what is actually changing.
• 16:29
  SPEAKER_00: Mr.
• 16:30
  SPEAKER_00: Will here, signing off from Selling on Giants.
• 16:32
  SPEAKER_00: Let's keep building.