August 5, 2024 Newsletter

[SFTB] 😭 A Complete Explanation of the new

DST Tax on Amazon

✅The Instant Value Section✅

ELI5 (Explain Like I’m 5) – The Future of Amazon AI

Goodbye keywords, hello Rufus, COSMO, & Rekognition.

Have you heard of Ritu Java? She’s an engineer with a focus on Data science, a speaker at numerous events, and a multi-time BDSS (Billion Dollar Seller Summit) winner. Her new AI for E-Commerce Newsletter is excellent, and her Agency, PPC Ninja comes highly recommended.

Ritu graciously agreed to record a video  about the future of Amazon search for the SFTB Newsletter. In a nutshell, get ready for AI to take over how your products are found. 

Here’s a primer before you watch it:

Rufus is Amazon’s new AI Chatbot that knows EVERYTHING about your product listings (and everyone else’s). You can actually already use it on any Amazon page in the app. It looks like this:

Amazon’s new “Common Sense Knowledge Generation” system. It a LLM that powers Rufus (among other things). This will change how we shop by grasping what customers want and mean. Simply put, COSMO makes Amazon’s search smarter and more intuitive.

Rekognition analyzes images and videos using deep learning. It detects objects, scenes, faces, text, and celebrities. It also flags unsafe content and offers custom labels for specific needs. It’s used in security, media, social media, and advertising.

HINT: It won’t be through keywords.

We are back from Europe and getting back into beach life.

The big news in our house this week: We purchased a Ninja Slushi Machine!

Instagram influencers sucked us in but it was sold out.  We got on the waitlist and we ordered one.  Our boys were so wanting one they contributed their own money for it – gotta teach em the value of things, you know!

If you are in the reselling game, these are going for about 3 x retail on Ebay sold listings if you can get your hands on one. #bolo

𝗕𝗟𝗨𝗙 (Bottom Line Up Front):  Starting October 1, 2024, Canadian Amazon sellers will face new fees as 𝗔𝗺𝗮𝘇𝗼𝗻 𝗽𝗮𝘀𝘀𝗲𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗖𝗮𝗻𝗮𝗱𝗶𝗮𝗻 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁’𝘀 𝟯% 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 𝗧𝗮𝘅 (𝗗𝗦𝗧) 𝗼𝗻 𝗿𝗲𝗳𝗲𝗿𝗿𝗮𝗹 𝗮𝗻𝗱 𝗮𝗱𝘃𝗲𝗿𝘁𝗶𝘀𝗶𝗻𝗴 𝗳𝗲𝗲𝘀.

Amazon sellers will feel the impact as Amazon passes these costs along. Here’s what you need to know:

𝗞𝗲𝘆 𝗗𝗮𝘁𝗲𝘀 𝗮𝗻𝗱 𝗗𝗲𝘁𝗮𝗶𝗹𝘀:

Referral Fees: Starting October 1, 2024, a 3% DST will be added to referral fees. If you currently pay a 15% referral fee, this will increase your total cost to 15.45%.

Advertising Fees: Beginning August 15, 2024, a 3% DST will apply to your advertising fees.

FBA Fees: While there’s no current charge for Canadian sellers, other markets like France have implemented similar taxes. It’s likely Canada will follow suit.

𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗣𝗼𝗶𝗻𝘁𝘀:

Non-recoverable Tax: Unlike GST/HST, this DST is not recoverable and will be an additional cost of doing business.

Applicability: These fees apply to sales happening in Canada. Even non-resident entities (e.g., U.S.-based companies) will be subject to this additional 3% for Canadian sales.

Cumulative Impact: While 3% might seem small, these incremental increases add up and can significantly impact your margins – and guess who’s going to be paying for this tax? Consumers.

𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗔𝗱𝘃𝗲𝗿𝘁𝗶𝘀𝗶𝗻𝗴 𝗙𝗲𝗲𝘀:

Countries Affected: Amazon charges regulatory advertising fees in several countries, including France, Italy, Spain, the UK, Austria, and Turkey. Starting August 15, 2024, these fees will also apply to ads served in Canada.

Fee Breakdown: These fees are applied when you’re billed and appear as separate line items. For example, a $1 ad click in Canada with a 3% DST will incur a $0.03 regulatory advertising fee.

Ouch.

𝗘𝘅𝗮𝗺𝗽𝗹𝗲 𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼:

Canadian Business: If your business is established in Canada and you sell a $15 item, a 3% DST ($0.07) will be applied to your $2.25 referral fee starting October 1.

U.S. Business Selling in Canada: If a U.S.-based business sells a $15 item in Canada, a 2% DST ($0.05) will be applied to the $2.25 referral fee.

How are you going to get prepared for this?

Here’s 6 Tasks you can give your Entry-level VA TODAY that are worth 100x whatever you pay them:

1) Amazon Reimbursements: Forget paying 25%, 15%, or 10% to a reimbursement service. Train your VA to go after these things instead and instead pay 0.1%. Bonus: Use Sellerise and get a bunch of them done for free.

2) Inventory Management: Make sure you always stay in stock. A smart VA w/ a good inventory management tool is invaluable.

3) Influencer Marketing & Outreach: Have your VA reach out to influencers for collabs. Once in a while an influencer’s content will go BIG.

4) Bookkeeping: There are some excellent detail oriented VAs out there who will save you so much money by having clean and organized books (just ask Nathan Hirsch). I tried to do it myself at first and it was… not pretty.

5) A/B Testing: Other then PPC, this is simply the biggest way to increase the revenue on any listing. A 1-2% increase in CTR could mean thousands in additional sales.

6) Listing Creation, Fixes, Flat files: The amount of time I’ve wasted on trying to fix catalog issues, build listings, or upload copy & images is insane. Hire an expert who knows how to do all this stuff better then you ever could (and then train your VA).

What I didn’t include:

PPC – Why? I strongly believe PPC is too important to outsource to an entry-level VA. Plus a ton of it should be done with automation tools.

Product Research & Development – Again, too damn important to be outsourced to someone just beginning. The business owner should be doing this kind of thing.

Branding – Your brand mission and content is your responsibility – and the ROI is more nebulous.

A quick hack this week. My AMEX points weren’t growing as usual, so I dug in.

I found out I was a day late on paying a card. Amazon held back 300,000 points. I was shocked! They wanted $35 to release them. Seemed fair, so I paid.

Check your AMEX account. See if any points are “in jail.” You might be surprised.

When I moved here, I thought “fishing tournaments” were for pros with their own boats, traveling the world. I was wrong. Anyone can join. Rent a boat for two days, pay the entry fee, catch fish, and take photos. Loads of amateurs compete. Expect to spend a couple thousand a day on the boat and $700 for the entry fee. If you want some adventure on your next trip, check out the local tournaments. Here’s one that happened a couple days ago.

(Yes, that is the real name of the boat)

Well, it happened. The guy who taught me a lot of what I know about Amazon got suspended. Apparently he was losing about $10K per day (that’s about $7 every minute).

What happened? A bad-actor filed a bogus IP claim. He said it wasn’t the first time that it happened either. What did Amazon do? Nothing, so far (other then shooting first and asking questions later).

Cara Sayer put it perfectly: “When will Amazon start to differentiate between genuine brands and the corrupt money makers who do everything they can to screw over decent people?”

It’s even more scary because Brandon has a huge account and knows a huge amount of people who could help squash this… and still… he’s suspended.

Luckily, their suspension was only a couple of days and they’re back online. Still – if Brandon can get taken down that easily, it doesn’t bode well for the rest of us. There’s no completely risk-free business. 

Speak Up! Community Comments & Questions:

How was today’s newsletter? Love it? Hate it? Are you just dreaming of catching the perfect wave?

I loved it! 🌊🌊🌊

It was okay 🌊🌊

Not good. 🌊

If you liked this newsletter, here’s where we share more stuff like it:

1. 🤓Just getting started? Check out the Free Amazon FBA Course

2. 🎙️ Listen to the latest episodes of The SFTB Podcast

3. 💸 Increase your income today with Online Arbitrage Training

4. 👔 Need an Accountant? Accounting Services

5. 📧 Want some 1-on-1 time? Rob & Max