Tiny homes, adserver acquisition and vendor purge?

Tiny Homes

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What will they sell next?

 Most Americans can't afford the American Dream nowadays (the white picket fence around a private yard), and as a result, has led to the popularity of tiny homes among heavily indebted millennials.

Tiny homes are popping up across West Coast cities as a solution to out of control rents and bubbly home prices, also known as the housing affordability crisis. 

Amazon has recognized the hot market for tiny homes among millennials and has recently started selling DIY kits and complete tiny homes. One of the first tiny homes we spotted on Amazon is a $7,250 kit for a tiny home that can be assembled in about eight hours.

A more luxurious tiny home on the e-commerce website is selling for $49,995 +$1,745.49 for shipping. This one is certified by the RV Industry Association's standards inspection program, which means millennials can travel from Seattle to San Diego in a nomadic fashion searching for gig-economy jobs.

This move demonstrates the versatility of the Amazon platform to expand into new products and services. It also highlights their ability to react to a market opportunity, even for high ticket items.

Sizmek acquisition

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Amazon has further boosted its credentials as a real threat to Google and Facebook’s digital dominance with the acquisition of Sizmek’s ad server and Dynamic Creative Optimization (DCO) business. Rumours that Amazon would snap up the ad server had been circulating for some time given Sizmek’s scale: its ad server is widely considered to be the only one on the market that could viably stack up to Google’s marketing platform.

Although the two digital businesses share a proportion of their customer base, for now, Amazon plans to operate Sizmek Ad Server and Sizmek DCO separately from its core advertising business.

This acquisition will help Amazon compete against Facebook and Google. Sizmek will broaden Amazon's Demand-side Platform (DSP) and improve their tracking capability from click to conversion, making it easier for brands to invest their spend. It is another move by Amazon to capture a larger share of non-Amazon budgets as it hunts down its big two competitors. The question remains whether advertisers will buy into their ad server solution; Facebook bought Atlas to bolster their ad tech stack in 2013 and systematically failed to persuade advertisers to switch.

Amazon purge on small vendors? 

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Rumours persist about Amazon's purge of small vendors in the US.

Two months ago, they halted orders from thousands of suppliers with no explanation. Panic ensued, until the orders quietly resumed weeks later, with Amazon suggesting the pause was part of a campaign to weed out counterfeit products. Now a larger, more permanent purge is rumoured to be coming that will upend the relationship between Amazon and many of its long-time vendors.

A Bloomberg report suggests that Amazon began discussing which vendors it would keep earlier this year. Amazon employees who manage vendor relationships were able to make a written argument about suppliers that shouldn’t be cut, but the decision was ultimately up to senior leaders.

Bloomberg also reported other signs that a supplier shakeout is looming, They claim, Amazon didn’t renegotiate annual terms with many smaller vendors, a usual springtime ritual. Amazon apparently also isn’t filling many vacant vendor manager positions, indicating the company expects to need fewer people to handle supplier relationships since there will be fewer suppliers.

Amazon has denied a large-scale reduction of orders from small suppliers, saying selling partnerships are reviewed on an individual basis. In an emailed statement, an Amazon spokeswoman said: “We review our selling partner relationships on an individual basis as part of our normal course of business, and any speculation of a large scale reduction of vendors is incorrect.”

The rumours originate in the US, and there is no indication yet that this might be a UK initiative. Whether you believe the speculation or not, it's wise to plan for alternative strategies.  For example, expanding into other marketplaces or setting up an Amazon seller account.