âPrices will continue to increase over time,â said Juozas Kaziukenas, founder and CEO of Marketplace Pulse. “With smaller brands trying to enter the market, it will become more and more expensive to do so when faced with established brands that are willing to pay to protect their market share.”
Competition is also greater from deep-pocketed aggregators who buy popular brands from Amazon in hopes of becoming consumer brand conglomerates on the digital frontier. Companies such as Thrasio, Perch and Branded have announced debt and investor funding exceeding $ 2 billion to buy and develop Amazon brands, with advertising a key tool for growth. Even at higher rates, Amazon advertising is a good buy compared to other forms of digital marketing. like Facebook and Google’s Instagram because shoppers on the e-commerce site are ready to buy, said Ryan Gnesin, CEO of Elevate Brands, an Amazon aggregator that owns 20 brands and is in the process of buying five more.
âBy far, we have found that Amazon is the most efficient and cost effective way to drive traffic to our products,â he said. The higher rates have made his business a bit more finicky about which businesses it is willing to buy based on their reliance on advertising for sales, he said.
Global policymakers are eager to collect larger tax payments from Amazon as part of a coordinated effort against multinational corporations, including big tech companies. The Organization for Economic Co-operation and Development is expected to get some 140 countries to agree on a plan, which could include targeting Amazon’s most profitable business segments such as advertising.