How a Solar Eclipse equals Profits for Amazon
I have to admit, I couldn’t imagine that the topic I was going to write about this week relates to how an astrological event effects eCommerce, but… here we are. As many of you should know, North America will have a rare event occurring on Monday, here’s a perfect excerpt from Nasa:
On Monday, August 21, 2017, all of North America will be treated to an eclipse of the sun. Anyone within the path of totality can see one of nature’s most awe-inspiring sights — a total solar eclipse. This path, where the moon will completely cover the sun and the sun’s tenuous atmosphere — the corona — can be seen, will stretch from Lincoln Beach, Oregon to Charleston, South Carolina. Observers outside this path will still see a partial solar eclipse where the moon covers part of the sun’s disk
I myself only became aware of this in the last few days thanks to my Wife (a school teacher). She informed me that schools would be closed on Monday in South Florida due to concerns of children looking into the sky. As we have a toddler of our own I understand the concern. I mean who’s really going to stop a child from looking at a cosmic event?
With that in mind, I proceeded in taking the responsible parental precautions and decided I needed to buy some safety solar eclipse glasses for my family. On I went to my favorite eCommerce store on the internet that delivers products in less than 2 days, or should I say “the only eCommerce store that delivers products in less than 2 days”, Amazon. What I found surprised the hell out of me, but it probably shouldn’t have.
When Cardboard Becomes Gold
Now, I don’t know about you but when I thought of safety glasses for a total eclipse, I don’t remember them costing more than $1 at the local Grocery store and didn’t McDonald’s give these things out for free at some point? I mean literally these glasses are just cardboard frames with black polymer. Here’s an example:
As of the last few days these little guys are selling for over $50 for a pack of 5! This pack sold for $4.99 not more than 15 days ago, we are talking about a 900% price increase in 2 weeks. Who woulda thought Solar Eclipse glasses are back in style? They’re not. Well at least, not for long.
Demand shot through the roof as more people started to learn about the upcoming Solar Eclipse and in turn inventory ran dry across all the merchants which is the prime reason why the price had a meteoric rise.
Even more bizarre, this is the best seller! In fact it came tumbling down form a BSR (Best Seller Rank) of the 4,000’s to 1 in just the last 30 days. This happens to be the case for all the brands selling these products.
Unlimited Supply?
In business we know what these are simply the laws of supply and demand but for a long time, the “supply” piece on Amazon was non-existent. I have never seen this type of price fluctuation on a single product before, and across all the merchants in the category. While there have been products with generally high demand selling out, mostly in electronics (Video Cards, Consoles), the Amazon Marketplace merchants are notorious for undercutting each other for that wonderful “Buy Box”.
We have never see an increase in price unless the product became universally unavailable and never a 900% hike. How could there be so much limited supply, in this gigantic bazaar of merchants selling practically the same products with different lipstick? The answer is growth.
UPDATE: As I was writing this Article today, this just came in from Amazon:
“Due to the evolving circumstances around Eclipse glasses, it’s important that you have funds available to address customer returns. We will be holding back a portion of your funds from prior sales of Eclipse glasses and will continue to evaluate the need to hold a reserve for these funds. As we learn more about the safety concerns related to Eclipse glasses, we’ll assess changes regarding your disbursement reserve balance.”
King Kong
You don’t need me to tell you that Amazon is big, or that it’s growing exponentially, and intertwined in our daily lives. You know this because wether you like it or not, you are already interacting with Amazon, either through their technology AWS, having groceries delivered to your house, buying general items, or watching videos. As we are seeing with Solar Eclipse glasses, its hold on eCommerce is stronger than ever. Amazon is no longer the elephant in the room, it’s King Kong, and if you own an eCommerce store outside of Amazon, well you are the helicopter below.
Competing with Amazon?
Dont.
I really can’t summarize this any better, trying to break through the noise existing on the internet in today’s day an age is a futile attempt particularly if your product doesn’t have a competitive advantage, incredibly difficult to replicate, or you happen to be a Kardashian. You are going to spend tremendous amount of effort and resources clawing for brand awareness.
To get a better picture of what you are facing let’s take a look at what this noise really is:
- Amazon
- Amazon Affiliates
- Amazon Product Reviewers/Micro-Influencers
- Blogger Reviewers/More Micro-Influencers
- General Affiliates
- Other eCommerce Stores in your niche
- SEOs
- Social Media
- Agencies
- Google Ads
- Facebook Ads
- Macro-Influencers
- Celebrity Brand Extensions
Truly this list can go on, the point is there are so many channels that exists for content creation and dissemination, launching a brand outside of Amazon is almost mundane. I’m not saying it can’t be done, many have, but its becoming incredibly challenging as this behemoth continues to gain market share.
Driving traffic through organic search in almost any vertical is more challenging today than 5 years ago. After all, we are living in a world of #fakenews and creating quality content isn’t enough. Long form 2,000+ word articles are becoming the norm and behavioral search through machine learning is changing the way content is even found.
Submit, at some point, you’ll have to embrace the hug from the giant gorilla.
What could topple Amazon?
I’m going to try really hard not to go all Sci-Fi here but I think the next 10 years is going to be very interesting when it comes to decentralization and automation.
I think the only thing that can shift buyers from Amazon is another Amazon, or better said another marketplace. However, one not controlled by a singular entity.
That’s where the move to blockchain technology and the craze behind crypto currencies becomes interesting. A decentralized autonomous marketplace that bases its fees by the amount of effort it’s merchants requires, which should generally translate to cheaper costs for the consumers. This can already be implemented in the Ethereum network with Smart Contracts.
I imagine a marketplace ran with AI and automation which provides “staff” with revenue sharing dependent on the tasks completed. A true job creation system, where anyone can log in, work and receive compensation for their efforts right from home.
This is not too out of the future, OpenBazaar is one company moving towards that, allowing merchants to sell anything without paying fees, and all purchases are peer to peer with crypto currencies.
Nothing Lasts Forever
We don’t know what or when it will be but we know it can’t last forever. There are a lot of companies out there gunning for Amazon. If you operate a off store and are driving traffic, by all means keep on, but if your are not on Amazon you are missing on a ton of potential sales.
As they grow, you’ll grow, in the meantime, improve your listings, improve your customer service, and pray that they don’t start selling in your category!
Any sufficiently advanced technology is indistinguishable from magic.
— Arthur C. Clarke
