Amazon is up to something. After some digging I found that it was not just our customers’ site. I am talking about site and how Amazon advertising was impacting them. They just got really aggressive and therefore, their adword budget is getting killed.  What is this adword thing you talk about? Well for those who are not digital advertisers-when a Google search takes place, an ad auction takes place in real-time. The resulting ads that are shown on the Google Search Results Page, and the order in which they are displayed, depends on a few factors… but one of the primary factors is each advertisers’ bid. 

That bid depends on is my adword budget has any money left to show that ad. Amazon has been driving those bids up in ALL categories.

Many advertisers claim that this adword platform “levels” the playing field. It doesn’t. Amazon does not worry about profits as they charge into a category, acquire customers at a huge loss, and then worry about that profit later….maybe. I have been complaining about this in Twitter for awhile and our POTUS is making his strange waves about it as well. This is a problem though. It is the same sort of thing that Walmart did in the 80’s and how they affected small local business’s.

Small Business Impact

Those small local business found ways to deal with Walmart, but now we need to find a way to deal with Amazon. Deal with them specifically In how it relates to Google Adwords marketplace, Amazon has an enormous budget and is willing to acquire traffic at a negative return on advertising spend. People who online shop seem to always think there is a cheaper place to buy and because of that, they actively go to Amazon to check.

Now is the time that I am actively looking at if we really want to sell online. Will anyone really buy from us? In many cases, Amazon offers similar items, cheaper and with free shipping. Their returns are faster. Their site is easier to navigate and people inherently TRUST Amazon. Just like how stores learned how to deal with Walmart, they…we will need to deal with Amazon. Maybe legislators can look at it too, but that will be too late. We will work on our value adds and other things and see what we can do.

What are you doing?

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