[ BDSN ] ⚖️ FTC review crackdown on Amazon to begin

August 19, 2024

STUMP BEZOS

Atlanta businessman Asa Candler created the first coupon in 1887. 8,500,000 people redeemed the coupon. What was the coupon for?

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⚖️ FTC REVIEW CRACKDOWN BEGINS this FALL

The Federal Trade Commission (FTC) has announced a new rule to combat fake reviews and testimonials, including AI-generated ones, set to take effect this fall.

This rule aims to protect consumers and honest businesses by prohibiting various deceptive practices related to reviews and testimonials.

The FTC can now take action against companies violating the policy, with potential fines of up to $51,744 per violation.

The new rule will significantly impact e-commerce sellers, particularly those on platforms like Amazon. It prohibits practices such as offering incentives for positive or negative feedback, including rebates or gifts, using insider reviews, and controlling review websites that claim to be independent.

Additionally, the rule bans threatening customers to remove negative reviews, purposely deleting negative reviews from your website to weight positive ones heavier, and buying or selling fake social media followers or views.

Amazon has been proactively addressing fake reviews through AI detection and legal action against review fraud groups.

Recently, Amazon implemented an automated process to remove reviews from buyers who have violated their policies. This change protects honest sellers from unfair penalties and enhances the trustworthiness of the marketplace.

🌎 STATS YOU SHOULD KNOW

The top buying seasons on Amazon:

  • Prime Day: Typically held in mid-July, Prime Day is a significant sales event with discounts across categories.

  • Black Friday and Cyber Monday: These days mark the start of the holiday shopping season, occurring in late November.

  • Back-to-School Season: Late July to early September sees increased purchases of school supplies and electronics.

  • Holiday Season: The period from Thanksgiving to Christmas is a peak time for shopping, with many buying gifts.

  • Amazon's Prime Early Access Sale: Similar to Prime Day, this event usually occurs in October to kick off holiday shopping.

  • Valentine's Day: In February, there is a surge in purchases related to gifts and romantic items.

  • Mother's Day and Father's Day: These holidays, in May and June respectively, drive sales of gifts and related items.

  • Halloween: Halloween sees increased sales of costumes and decorations in August, September and October.

  • Easter: Occurring in March or April, Easter prompts sales of candy and gifts.

  • New Year Sales: Early January features sales on fitness and health products as people pursue New Year's resolutions.

2024’s Halloween trends

Data compiled by Granularity, shows the Halloween season has been expanding.

Sales of Halloween-related items on Amazon have continued moving earlier and earlier.

Excluding data from 2020, which was skewed due to the pandemic:

  • 2019 saw a peak in Halloween item sales during the last week of September.

  • In 2021 and 2022, the peak started two weeks earlier than each year prior, with more sales happening in August.

  • In 2023, sales had moved yet another week earlier compared to 2022, placing most of them in mid-August.

  • In 2024, peak Amazon sales yet again started a week earlier than last year, meaning Halloween shopping began ramping up in earnest in early August. This is six whole weeks earlier than in 2019.

🚫 [ part 2 ] CAUTION: BE VERY CAREFUL when
choosing AMAZON TRAINING & DFY SERVICES ⚠️

I keep it real in BDSN.

The July 29th edition of BDSN had a story about Amazon Done-For-You and “sell on Amazon” services with a warning to be very, very careful.

The story, which you can read here, called out several Amazon Done-For-You services that are scams and are in trouble with the US government.

There is another group that has since come to light that is currently getting a firestorm of negativity over its promises and training as well. It’s a family-run Amazon education group that states on its website “we are obsessed with helping mamas make it rain.”

They are successful in their marketing using live sales agents and Christian-oriented verbiage (on the Kindled podcast above former member Courtney Manis says one of the leaders calls himself a “Prophet of God”).

Onboarding calls focus on prospect dreams and often can “feel like a cheerleading group to make you feel special,” one former member said.

There’s a lot of Google SEO that has been created to counter negativity and doubt, as well as claims of deleting posted reviews, that could be in violation of the FTC’s recently passed Fake Reviews legislation.

A quick search online reveals pages like this one:

Tens of thousands of mostly women have joined the Rainmakers program. For a $6K investment (or $2K for a product idea), not counting actual startup and selling costs, they say they will pay you $10K if you don’t make $10K within the first year selling on Amazon (but only if you launch within 6 months, which a small percentage do).

More and more women are starting to come forward that feel scammed and mislead by something they call the “Rainmaker Challenge.”

Eastern_Hat_7485 says on Reddit it was an attempt at a rescue plan for those in debt from the original sell on Amazon program. They would teach them how to grow an Instagram account to $10K/mo - for another $3,000.

The July 29 story about DFY and Amazon scams from BDSN was posted by a member inside the Rainmakers group, but was quickly censored and deleted by one of the owners (see below) on the basis of “sensationalized news.”

According to several former members, deleted posts are common in the group, especially if you say you are struggling or have lost money.

Public posts about Rainmakers reveals a lot of upset ladies who feel scammed, over-promised and misguided. Some have recently filed FTC complaints hoping the government steps in, as they have in other cases mentioned in the July 29the BDSN story.

Here’s an eye-opening podcast released last week about one member’s experience.

You can also read comments here and here, then decide for yourself.

Homepreneurer advised on Reddit:

❝

“DO NOT give them your money, we have seen countless families go into bankruptcy and divorces happen over the problems that this program has created.”

It is definitely possible to make money selling on Amazon. I have and I know a lot of sellers who have. But be careful of big promises, bad/outdated training courses and videos.

Remember to carefully vet and evaluate any Amazon training or done for you service before giving them your money. In many scenarios, only a few people get financial gain – with the ones selling the course or service making the most.

One sad fact: the majority of “sell on Amazon” folks have ZERO prior successful experience selling on Amazon.

Dreamers are losing tens of thousands. Don’t join in their nightmare.

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🔭 YOU GOTTA SEE THIS

Dream 100 member Traian Turcu and Stefania Bogdanhas created a new “video” newsletter called “Worth Telling.”

It features a short story for entrepreneurial minds in a 3-4 minute video every week.

14 new graphics you can use with your link below to spread the word about BDSN

Click here to pick your favorite

🧾 TEMU FOLLOWING AMAZON’S TAX PLAYBOOK

Both Amazon and Temu have leveraged regulatory loopholes to gain significant pricing advantages, fueling their rapid growth in the e-commerce space.

Amazon initially exploited tax laws that allowed online retailers to avoid collecting sales tax, strategically basing its operations to minimize tax obligations.

This approach enabled Amazon to offer lower prices than local competitors for decades, attracting a large customer base.

Similarly, Temu is now taking advantage of the de minimis threshold for customs duties, shipping most orders directly from China to avoid paying these fees.

This allows Temu to price its products more competitively than established players like Amazon and Walmart. Amazon is now following suit with a new direct from China program.

The parallel between these strategies is striking: both companies identified and maximized temporary regulatory advantages to rapidly expand their market share.

As Amazon grew, it gradually transitioned to collecting sales tax in all states, adapting its business model as the regulatory landscape shifted. Temu appears to be following a similar trajectory.

  • Both Amazon and Temu use regulatory loopholes to offer lower prices and fuel growth

  • Amazon's advantage came from avoiding sales tax; Temu's comes from avoiding customs duties

  • Both companies will only adapt their strategies as regulatory environments change

  • The temporary nature of these advantages pushed both to rapidly expand their customer base

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📖 DOES YOUR BOOKKEEPER UNDERSTAND E-COM?

Want a quick way to know if your bookkeeper understands Ecom bookkeeping?

Check the top line of your account statement.  If it is the amount deposited into your financial institution, that is NOT correct! 

Your top line should be your total marketplace sales, below that fees, refunds etc. 

🔥 MORE HOT PICKS 🔥

🥃 PARTING SHOT

“Stand out - don’t blend in with the crowd. Personality is the sum of your quirks. No quirks - no personality.”

✌🏼 See you again this Thursday …

The answer to today’s STUMP BEZOS is
The coupon was for a 5¢ glass of Coca-Cola