AI Sell Off: Why Amazon Is Up While Meta and Google Fall
Big tech shares took a hit this week, but Amazon barely flinched, and sellers are a big part of the reason why. The hosts also cover the Walmart and Amazon drone race, a $25 Thanksgiving dinner bundle and early numbers on ChatGPT ads.
In this episode: The most important e-commerce headlines from the week of 6 November: what the AI sell off means for Amazon sellers, the race to deliver by drone in under 30 minutes, Amazon’s Thanksgiving bundle, and whether ChatGPT advertising is delivering.
Key takeaways
Meta and Alphabet fell about 13% while Amazon rose 2%, because Amazon funds its AI spending from its retail cash flow, which includes seller cash.
Expect more seller reserves, fees and capacity charges, so keep watching your account profitability.
Faster delivery lifts conversion, but cheaper improvements like delivery clarity and easier returns may deliver more value, and early data shows ChatGPT ads trailing Google.
Timestamps
00:00 Cold open
01:42 Welcome to Upside News
02:32 The AI sell off and what it means
02:48 Meta and Alphabet fall, Amazon rises
03:17 Why Amazon is doing better: ad dependence
04:03 Amazon coming for seller cash
04:45 What to expect: reserves, capacity and fees
06:27 The drone delivery race: Walmart vs Amazon
08:34 Do we actually need drone delivery?
09:48 Convenience shoppers and faster delivery
12:06 Cheaper ways to improve delivery
13:32 Amazon’s $25 Thanksgiving dinner bundle
14:50 ChatGPT ads look like a flop so far
15:44 A counter view: it’s still early days
17:09 Will ads erode trust in AI assistants?
18:44 Wrap up and office hours
The detail
Amazon’s advantage comes from seller cash. Meta and Alphabet raised capital to fund their AI buildout on the strength of their advertising businesses, which make up about 98% and 68% of their revenue. Amazon (about 10%) and Microsoft have diversified income, and Amazon’s retail side, which includes sellers, boosts its free cash flow. The hosts expect reserves, capacity charges and fees such as the US increase from January to keep coming, and point to our previous news episode for what sellers can do about it.
Drones are scaling fast, but is speed the best investment? Walmart’s Zipline partnership has passed 2 million deliveries, with the second million arriving much faster than the first, while Amazon’s drones face reports of crashes. Amazon says conversion is up 20% on faster delivery offers, yet the hosts argue that choosing a delivery time slot, clearer tracking and easier returns could add more value for less money. Our earlier drone delivery episode has more background, and the hosts would still love to see Argos join the race.
ChatGPT ads have not proved themselves yet. An early working paper still under review found paid ChatGPT visits earned $89 each against $245 for Google, and 73 of 87 advertisers saw no return. One host argues it is early days and that shoppers are already using AI to find products Amazon does not carry, while the other fears more ads will erode trust. See also our episode on how AI search is changing e-commerce.
Work with us
Worried about reserves, fees and your account profitability heading into Q4? Let us review your numbers. Get in touch.
Subscribe: Spotify · Apple Podcasts · YouTube