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On their Q2 call, Amazon executives dropped a little number on analysts that was a pretty big surprised.  They noted they are adding 13 fulfillment centers (FCs)  to the ~38 they have now.  That’s a > 30% increase in fulfillment centers and depending on the size could be an even larger expansion from a sq-ft and thus capacity standpoint.  That’s a big investment and it left people scratching their heads – why, where, how big, and does this mean Amazon is seeing another leg of growth (vs. slowing down)?

Digging a little deeper on Amazon’s European Growth

Earlier this week, James Mitchell @ Goldman Sachs did some sleuthing and discovered that one of the large new FCs will be in Germany in the North Rhine-Westphalia area.  Here are some tidbits from a note he published on the topic Monday->

Amazon announced it will open a 600,000 square foot fulfillment center in Werne, North Rhine-Westphalia (Germany’s wealthiest state, with about a quarter of its GDP) in September. The center will employ up to 800 full time and seasonal workers. Amazon will add another 1 million square feet elsewhere in North Rhine-Westphalia sometime in 2011. Amazon already operates about 2 million square feet of capacity in Germany, in Bad Hersfeld and Leipzig.

(1) We believe the fact that this center is in Europe supports our view that much of Amazon’s capacity expansion in 2010 is in less-mature international markets, rather than the US. See our prior note, Fulfillment centers spearhead Europe and China expansion, July 27, 2010. (2) The size and location of the center may allow Amazon to provide same-day shipping in Ruhr-Rhine cities such as Koln, Essen, Dortmund, and Dusseldorf, just as it already does in Greater London and Greater Tokyo. (3) The new center may also facilitate Amazon’s expansion into the Netherlands and Belgium, where Amazon began offering free shipping in 2009.

Excerpt from ChannelAdvisor Blog…Get the full text here…

ChannelAdvisor Expands Amazon solution to Germany and France

In fact, our UK customers have been asking for us to support Amazon DE/FR for the last two years as they see that as the next logical step.  We’re pleased today to announce that not only have we added support for these regions, we are also bringing our industry-first FBA support to the region.

Sell More through Amazon UK, and now France and Germany!

Tuesday, August 17, 2010 at 9am – 10am EST

Presented by:
James Scott, UK Managing Director, ChannelAdvisor
Scott Galvao, E-Commerce Integration Specialist, ChannelAdvisor

ChannelAdvisor’s Premium Marketplaces solution has expanded its support beyond Amazon US and UK to include Amazon France and Germany. Just in time for the holiday rush, online retailers can sell across Amazon UK, FR and DE from ONE platform, expanding their reach, saving time and automating the tedious tasks necessary to meet Amazon’s strict selling requirements.

Join our Amazon experts to learn:

• How you expand your business to Amazon FR and DE now to maximize holiday earning potential
• Why you should consider Fulfillment by Amazon (FBA), which ChannelAdvisor is the only 3rd-party solution to fully support
• How to make the expansion to these marketplaces seamless, and much more

Register for this webinar HERE.

Key Points From comScore’s June U.S. Traffic Release

June and Q2 U.S. Online Retail Traffic Trends Largely Neutral —

• Overall U.S. Y/Y Traffic to Online Retail sites was modestly positive
• Q2 traffic (up 13.0%) very modestly better than Q1 trends (up 12.7%)
• comScore tracked 21% Y/Y growth to Amazon’s U.S. Website
• comScore tracked a 5% Y/Y decline to eBay’s U.S. Website

And the icing on the cake for me was this quote "…these trends as Neutral to both a Bullish AMZN and a Bearish EBAY…" Wow, does that say alot? These stock analyst are looking at Amazon increasing and eBay decreasing as a NEUTRAL trend.

Dayam! This like like eBay is on the "short bus" and they just expect it to stay that way. I mean, wow they don’t expect too much from eBay these days I guess. Dude that has got to suck for eBay.

Some key points to recognize are that Amazon and eBay are looking somewhat neutral. However, Amazon is very bullish while eBay seems to be very bearish and of course that means that Amazon is up, eBay is down. if you look at the chart, the chart data is showing that Amazon continues to see double digit increases in online traffic, while eBay is seeing single digits decreases in the negative, April saw down -7%, May down -3%, June down -4%.

If you couple that same data and take a look at same store’s sales data that was just released for June from ChannelAdvisor and their block of customers, it looks like the changes from eBay continue to take its toll on eBay sellers because the eBay same store sales declined 5.2%, after being up a little bit, around 4% in May.

eBay - The changes from 3/30 continued to take their toll on eBay sellers.  eBay declined to -5.2% vs. -4% in May.  Customers continue to be frustrated by the BestMatch algorithm, constant eBay tweaks to that algorithm and the very high eTRS bar.  If there is a silver lining to this problem, it has lead to more expansion in other channels (Amazon, Buy and webstore are the primary beneficiaries)
                                                                                        — Scot Wingo

So, now, we’re seeing that becoming a little negative, I’m not seeing a whole lot of rainbows in here for the eBay squad and I’m one of them. We need to see some change, some optics in the eBay numbers because they cannot continue bleeding this heavily while the rest of the country and the rest of the eCommerce economy seem to be turning the corner and moving forward; even though to double digits, eBay is still seeing the negatives. Not good.

This is a constant trend, if you want to see a silver lining in the cloud well at least eBay is not down 15% or 23% down, like a year ago; they’re bleeding less…Yeah?

Next lets turn our minds to the user interaction on the web.  Interesting point is that Google Sites are still seeing an increase and an income, but Facebook is also catching up pretty quick.

If you look at the total number of views and the total time spent, Facebook is starting to catch up and make a big profit. Facebook had a share of 8.6% where it used to be 7.8% and they are expecting Facebook to capture the number one spot in time spent before the year ends, which means that Facebook will be number one by year’s end. Who would’ve thought that crown would switch hands? If you rewind the clock back to just 3 years ago, no one would have predicted Facebook would out do the King Google?

OK, so I am sure you have heard the news right? Buy.com got bought for $250 million The acquisition, valued at approximately $250 million (USD), will be carried out by Rakuten’s U.S. subsidiary, Rakuten USA."

The press release illustrates the strategy as follows:

“As a company, Buy.com shares our vision for the future of ecommerce  as a platform to give consumers the best value no matter their location, and to merge shopping with entertainment, and to help retailers build deep and lasting consumer relationships.”

Now things are getting juicy, there is a possible new player in the eCommerce domination game. No more do you just speak about eBay vs Amazon, you have to know that a 3rd rail is coming. Will it be Wal-mart? Sears? or now BUY.com?

We know one thing, Buy.com has a sweat heart deal with eBay and now eBay got a new "mac daddy" from the far east running the show…LMAO. Will this turn out to be a case of "chickens coming home to roost?" Could Rakuten USA be the stone that brings down a giant? I dunno, but you got to love the drama right.

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The Postal Service announced Thursday that it lost $1.9 billion in the six months that ended March 31. Revenues dropped 1.4 percent vs. the same period in 2009 and mail volume dropped 6.3 percent. USPS reported that 88.1 billion pieces of mail were delivered in the first six months of the current fiscal year and that includes a $180 million boost in first-class mail from the Census Bureau.

To regain viability USPS is seeking congressional approval to eliminate Saturday mail delivery and for relief from an annual payment of more than $5 billion for retiree health benefits.

In April, the Government Accountability Office agreed, reporting that the post office’s business model “is not viable due to USPS’s inability to reduce costs sufficiently in response to continuing mail volume and revenue declines. Given its financial problems and outlook, USPS cannot support its current level of service and operations.”

In addition, according to the GAO the post office is nearing its $15 billion borrowing limit mandated by the U.S. Treasury and has unfunded pension and retiree health obligations and other liabilities of about $90 billion. Without an overhaul, “risks of larger USPS losses, rate increases and taxpayer subsidies will increase.”

This situation is really bad for us merchants that are currently dependent on the USPS for deliver service. With many companies constantly vying for merchant customers to use USPS services and discounted rates, should we be concerned? How much longer can the USPS sustain these losses without passing off cost to shippers or even worse, reducing service levels?

Wow, considering shipping is 1/2 of your scoring factor for eBay’s Top Rated Seller program, I really think it is important for us merchants to weigh the long term risks for our business models. If you are dependent on USPS, where does your model churn if cost skyrocket or service declines in this “DSR-Customer Feedback” driven society on multi channel platforms?!?

eBay Inc.

(Nasdaq: EBAY) today reported financial results for its first quarter ended March 31, 2010. The e-commerce company posted first-quarter revenue of $2.2 billion, up 9% year over year, or up 18% excluding Skype. The increase was due to growth in the Payments and Marketplaces businesses, as well as a positive impact from foreign currency movements against the U.S. dollar. The company recorded net income on a GAAP basis of $397.7 million or $0.30 per diluted share, and non-GAAP net income of $554.2 million or $0.42 per diluted share, for the first quarter of 2010.

GAAP operating margin increased to 22.2% for the quarter, compared to 20.9% for the same period last year. Non-GAAP operating margin decreased slightly to 30.6% for the quarter, compared to 30.7% for the same period last year, as productivity gains were offset by faster growth in the company’s lower-margin PayPal business and lower take rates.

eBay Inc. generated $418.3 million of operating cash flow and $266.0 million of free cash flow during the first quarter. Operating cash flow and free cash flow were reduced by a one-time tax payment of $207.4 million related to a legal entity restructuring, as a result of which the company moved approximately $1.1 billion in cash to the U.S. in the fourth quarter of 2009.

“Our first quarter results reflect another strong step toward achieving our three-year growth and profitability goals,” said eBay Inc. President and CEO John Donahoe. “We are becoming a more customer-focused and technology-driven company, delivering more innovative products and experiences and driving operating efficiencies to reinvest in growth. We are improving the fundamentals of our business, strengthening eBay Marketplaces and aggressively growing PayPal to become the leader in global online payments.”

Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2010.

Operating cash flow was $2.78 billion for the trailing twelve months, compared with $1.76billion for the trailing twelve months ended March 31, 2009. Free cash flow increased 62% to $2.32 billion for the trailing twelve months, compared with $1.43 billion for the trailing twelve months ended March 31, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 463 million on March 31, 2010, compared with 447 million a year ago.

Net sales increased 46% to $7.13 billion in the first quarter, compared with $4.89 billion in first quarter 2009. Excluding the $185 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with first quarter 2009.

Operating income increased 62% to $394 million in the first quarter, compared with $244 million in first quarter 2009. Excluding the $15 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, operating income would have grown 56% compared with first quarter 2009.

Net income increased 68% to $299 million in the first quarter, or $0.66 per diluted share, compared with net income of $177 million, or $0.41 per diluted share, in first quarter 2009.

"We remain heads-down focused on customers," said Jeff Bezos, founder and CEO of Amazon.com. "Amazon Prime has just celebrated its fifth anniversary, adoption of Amazon Web Services continues to accelerate, Kindle remains our #1 bestselling product, and earlier this week, Kindle selection reached 500,000 titles."

I am really starting to look forward to Thursdays now, just for the opportunity to post these discussions and then follow it. I really am learning alot and the resources are fascinating. If you missed any of these informative discussions, be sure to check back to the prior weeks:

• Week #1 : Brands and Branding: What is it?
• Week #2 : Keyword Research

These weekly topical discussion are really a great resource and I am enjoying the information that is being shared. 

Each Thursday we will post a topic related to us as merchants and the the COMMUNITY…YOU GUYS will come in on the comments and post. You can post your comments on the subject, links to articles or posts to other blogs on the topic, you can post links to YouTube videos or Podcast episodes. I do not care what you post as long as it furthers the education of the community, it qualifies. But of course this will ONLY work if you participate. I want to see if the community would participate to make it great. Come on guys, lets each one, teach one!!!

Topic this week?

Marketing Channels: Which one is the BEST for WHAT and WHY? 

Is it eBay? Or maybe Amazon? Even Craigslist? How bout them Comparative Shopping Engines (CSE’s), or even Etsy, Bonanzle, etc. OH dayam this is time for the showdown! Let’s go for the gusto…LMAO

OK, I need your input now so lets start posting to the thread topical information on Brands and Branding.

It’s 2010 and things have changed, I remember back to 1997 when I sold my very first item on eBay long ago. It was a pair of tickets to see Elton John at Madison Square Garden in New York City. I scored some sweet lower level seats that cost me $300 bucks and then I could not get the time off to fly from Atlanta to New York so I had to sell them. I put them on eBay and started the auction at $99.00. Those tickets ended at $800 for the pair, and I was instantly HOOKED on eBay.

Of course it was years later in 2001 that we created the company that is now one of the more successful 3rd party sellers on sites like eBay, Amazon, Yahoo and the web. The ONE thing that I would attribute our multi platform success to is our constant tweaking of the brand. The ability to move and shift with the state of eCommerce has made my company successful in marketing on these different venues by simply keeping up with the Jones’ and then out pacing them.

When "everybody" is doing it, that is when we STOP doing it. When "everybody" sits, we stand. And I am personally pushing the envelope in design to really bring our look and feel to maximize the direction of the different platforms we sell on. And EACH platform has its own uniqueness, and what works on one, will not work on another. I feel like a mad scientist trying to concoct plans and scenarios to get a perfect blend and balance. So every year we look to update and redesign components of our stores and templates to keep positioning for success. So this is one of those times.

eBay is CHANGING and the entire world is changing whether you or I like it or not. And the eBay platform is NOT in the forefront of this change, their customer are. That is one of the things I think constantly gets dismissed every time eBay takes a dramatic step, the sellers scream and yell, but I NEVER hear the buyers complaining?!? Some point to declining sales on eBay to the changes on the platform, but I think a more realistic analysis would show that the declines are due to the platform not changing ENOUGH to keep pace with a very fickle consumer. Are these the correct changes? I don’t know, time will tell. What I do know is what changes will be right for my company.

eCommerce is changing rapidly and eBay MUST change just to stay competitive. You know why? Because eBay is trying to keep up with a buyer base that is changing and evolving and they are somewhat stuck with a small portion of their seller community that is fearful of any change. They are comfortable with ways of 15 years ago, still reminiscent of Beanie Babies and Jesus Toast auctions. Unfortunately time does move on and if you are not willing to move with it you get to sit on the sideline and watch. Some will close their shops, some will leave the platform, some will just give up. After you "give up the ghost", you can always create a "sideline spectator" blog site about it too if you like, I know several that choose to do that instead of actually selling on eBay…guess it pays more?!?

I found these pictures the other day on my PC and I had not seen them in years, this was my business in the early part of the last decade. I have never been so attached to a product line or ideal that I would not abandon it for success. I got in business to be successful in BUSINESS not be successful at selling a particular product to the detriment of my livelihood, WTH is that?!? There is an old saying that "pride goes before a fall", so I am not too proud to adjust my business plan instead of falling. We can not control the changes to the platform, but we can control how we react to the changes.

Sure I am like most sellers, I bitch and moan sometimes but then I have a funeral. I bury the past knowing it will NEVER return and move on to the next great thing. So here are just a few pictures of our past…

This one was early in our game, I was not too proud to use my kid as a model for our rolling coolers. This was back in 2002 when it was a novel idea and new to the market.

This was around 2004 when we were selling desktop and laptop PC’s. That was our business for years, selling electronics and PC’s. That was my dining room!!! We were eating in the living room back in a 2 bedroom condo long ago…wow.

Then I came across these pics, LOL! We got lucky and scored a van load of Tickle Me Elmos, just b4 Christmas in 2006, man those were FLYING off the shelf. We don’t even sell toys normally, but I was  happy to sell the hot Christmas toy that year and would do it again to have a successful season.

"Change is hard." "People hate change." Those are two of the most common quotes heard when you study change management. It occurred to me that if people hate change, they have a funny way of showing it. Every iPhone sold serves as counter-evidence. So does every text message sent, every aluminum can recycled, every new Facebook post. And I haven’t even mentioned the biggest changes: Getting married and having kids. (If people hate change, then having a kid is an awfully dumb decision.)

It puzzled me–why do some huge changes, like marriage, come joyously, while some trivial changes, like design or business plan changes, meet fierce resistance?

Some brilliant psychologists discovered that people have two separate “systems” in their brains—a rational system and an emotional system. The rational system is a thoughtful, logical planner. The emotional system is, well, emotional—and impulsive and instinctual.

When these two systems are in alignment, change can come quickly and easily (as when a dreamy-eyed couple gets married). When they’re not, change can be grueling (as anyone who has struggled to quit smoking can attest). In those situations where change is hard, is it possible to align the two systems? Is it possible to overcome our internal "schizophrenia" about change?

I am a stubborn spirit,  I simply do not have an "I QUIT" bone in my body. Neurologically I don’t have the option to just give up?!? This business is how we feed the kids, this is our business and we own it, to quit this and just get a job?!? HELL NO, that  is not a option. My ONLY option is to "meet and overcome all obstacles in my path" and that included the changes to eBay.

eBay would have to simply shut me down for me to run away from this venue. Honestly, I am not cheering the changes, I just know they are HERE to stay and that they come every year, like the seasons. After nearly 10 years in ecommerce, I not only expect them, I now have begun to embrace them. It is a challenge that I look to come at me year in and year out. But of course if I could not stand the heat, I guess then I would leave the kitchen…that day has not come. We have changed and tweaked the business model, the product lines and the pricing to stay on top of our game.

This should really be an interesting year and I am sure the next 2 change cycle announcements will not be as easy on us as this one from January. My guess is this 1st set of changes were the "easy" ones…hmmm. Gird up your self, cause there could be more arrows coming from San Jose. Will you stand or fall? Like the Elton John’s song says….I’m Still Standing (Yeah Yeah Yeah). Dayam, this video is soooo ’80′s LMAO

Some things are just too good to keep to yourself and this happens to be one of them. Santa Claus came to my house today in his "brown uniform" with the electronic signature pad and the big brown truck

Yeah, that guy left me my Christmas gift and I do an unboxing video for you on the Amazon Kindle that I just got at $40.00 OFF! Directly from Amazon.com at a huge discount. In this little video I show you how I did it and you can get one too in time for your holiday gift giving or gift keeping, LOL.

Please Rate My Video with 5-Stars DSR’s

A recent story from The Daily Mail showcases the size and scope of just ONE, yeah just 1 of the dozens of fulfillment centers for Amazon.com

The size and scope of this operation really hits home when you see it in wide angle view from the top. Just thinking about the systems and management processes make me nauseas. I need to sit down and get a drink, LMAO.