Amazon TOS Changes - What It Means & What To Do

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Hey fastlaners Ryan Daniel Moran here with a special public service announcement from Freedom Fast Lane. Because this week Amazon made some changes to their terms of services and the whole world of Internet entrepreneurship pooed their pants. I can't tell you how many questions I fielded from freaking out entrepreneurs who worried that the whole world was crumbling around them. So I want to take a few minutes today and address the changes that have happened. And even if you're not an entrepreneur who sells on Amazon.com there's some things that will be impactful for you to just hear. Because every channel and every business model goes through some sort of a change, usually in about a three year cycle. We've talked about three year cycles here at Freedom Fast Lane. We've talked about the wide open west area, the consolidation and then moving over to a different channel, which tends to be the cycle of a lot of Internet businesses. And I have called publicly for the consolidation to happen in September of 2015 for a year now, over a year. And here we are. So if you're surprised by any of these changes, shame on you. You haven't been listening to Freedom Fast site. The fact of the matter is that things change and if you are impacted by those changes in a way that impacts your business, you didn't play the game right. If you have been building your entire business based on loopholes and hacks, you should be impacted by changes at channels and places for buyers and for traffic. So if this negatively impacts you, then that was probably the point. You were probably doing something wrong. You were probably building your business on sand. Anyway, first of all, let's dive into what exactly the change is over at Amazon. Now it's important to note that Amazon's terms of service have always been fairly vague. Their policing of their terms of service has always been lackluster. I have some connections and some backdoor information about what the actual intent of the changes over at Amazon are. And their language is the manipulation of bestseller rank, meaning your the display of how well you rank in the store according to sales, and the process of giving away discounted units in exchange for reviews.

This language is being loosely interpreted by everybody and their sister. And of course the rumor mill of what this means and who it affects has gone crazy. And the fact of the matter is that the intent of this change is to limit and prevent Black Hatters.

Aggressive Ragoo getters, which is like a review getter, and services that sell or promise reviews. Now I'll break this down into what each of these are and who it affects. So that you know who to avoid. We'll also talk about who this does not avoid and what this means for launches and their place in the overall marketplace. The reason why people are freaking out about this is because it's fairly well known, largely because of those of you who listen to Freedom Fast Lane, that driving a significant amount of sales to Amazon, either by using your own list outside launch services or through other ways, is a great way to give the Amazon algorithm what it wants to rank you for keywords. We have used this term of manipulation pretty aggressively here on Freedom Fastlane because by simply looking at how an algorithm works or looking at how a system or a process works and getting into that system and giving it what it wants is a form of manipulation. Are there ethical forms of manipulation? Yes. All sales and marketing is a form of manipulation. If you run clients and customers through a sales script, through a sales process, that's a form of manipulation. What this addresses is is the unethical manipulation of bestseller rank. In other words, faking sales tricking, tricking the algorithm into thinking that you are a strong seller when you indeed are not.

The target of this change is something I've been praying and hoping for for well over a year. In fact, I'd say that Amazon is very late to the party. Most marketers knew that these loopholes existed and were hoping that they would get closed. These loopholes included black hatters, which, in case you didn't know, there has been a process that has worked for years where you could fake a bunch of sales, inflate your perceived sales rank, and Amazon would reward those fake sales and rank you higher on Amazon. Some of you have been listening to the show for a while, may be familiar with some sellers on Amazon that I have referred to as asshat. This is when a competitor cheats their way to the top and attempts to compete with me or someone I know and like and does so through fake manipulation. That's black hatting your way to the top. It also targets aggressive review getters, meaning people who are incentivizing reviews in an overt way. So we've had a competitor, we call them asshat, asshat number two, who is pretty notorious for going to his or her list and saying, go, leave a review for this product and then we will compensate you for it, even if they've never tried the product before. By doing so, this person gets crazy numbers of reviews and they're not real reviews, but they look real to the system, thus manipulating one's position in the marketplace. This also targets review getting services that promise reviews in exchange for discounts.

What Amazon. We have to understand what Amazon is trying to do in order to see the bigger picture of this.

We have to understand what Amazon's overall intent is, and that is to create a fair marketplace for everyone who is selling.

They are attempting to clean up some of the underhanded.

Loopholes that have gummed up the marketplace for several years. They're just finding out about these loopholes. I said on a, on a, usually one of, in our tribe, one of our tribe message boards this week that Amazon does not understand their own algorithm. And somebody said, I think Amazon would understand their own algorithm. The truth of the matter is they don't. They don't. Most marketers understand it better than Amazon does internally. So they did not know that most of these loopholes existed and they're attempting to close those now. We have known that the algorithm has been changing. For those of you who don't sell on Amazon.com, i'll make this relevant for you in a moment. We've known as marketers how the algorithm worked for some time and we've exploited that in a lot of different ways. Some people have done it through underhanded ways and Amazon is attempting to slap wrists on that and hopefully slap accounts for that as well. Here is the other side of it, the negative part of this. This, when you understand what's actually going on, you would celebrate this as a good thing. The other side of this, though, is that in their attempt to police these new terms of service, there will probably be mistakes. Amazon has been fairly public about this, that in their attempts to, to make the marketplace fair, they sometimes make mistakes and penalize good sellers. That happens. That has happened before recently. That's happened for a long time. That is the other negative side of this, because the fact of the matter is they don't understand the business model that most new entrepreneurs who leverage Amazon use. Amazon is built to be a place where big brands are sold and a lot of different sellers dropship and compete for the best price. That is what Amazon is built to do. It is not built to be a launching platform for new brands, but that's what it's used for now. And Amazon doesn't know what to do with that yet. They're too busy innovating to know what to do about that. So when you have independent brands that look like they may be manipulating, Amazon can mistake that for a violation of terms of service. So there are going to be, there probably are going to be shutdowns that were not Warranted because Amazon makes mistakes. It's probably what is going to happen now. There was been a huge uproar in the community this week about what this means and how what this means for launches. And I was even called out personally for recommending services like Zon Blast that are launch services. And I personally, if I'm adding some color commentary to this, have to just laugh in those people's faces because they clearly don't understand what is going on. There are even some authorities who are making claims about who this affects and trying to create loopholes around this and it's all a bunch of noise. The fact of the matter is that the intent is to target people who are unethically manipulating the search results, trying to get around the system, but there will be mistakes made along the way. Now what everybody is doing at this time is trying to say, ah, everybody is black hat except for us. That's what all the services are responding by doing. Some people are freaking out and shutting down a lot of their marketing and trying to lay low.

The good folks over at zonblast posted a bit of a PSA in responses that I thought was very, very well done. Identifying what's really going on and just calling out how the marketplace is responding, how we are responding, and by we I mean block my own businesses, means there's not a lot of change. We've changed a little bit of how we interact with our customers because we want to be as safe as possible. We haven't been doing anything that would compromise our account anyway, but we changed some of the language just to be extra safe, especially when doing launches to our lists to make it clear that this is not in exchange for a review, but if they'd like to review our products, that that would be welcomed. We've changed a bit of that language, but as far as overall marketing, it's about the same. Not a whole lot has changed. So while everybody else is freaking out, we continue to stay the course because nothing really is all that big of a change.

I want to address this and this will be relevant for those of you who aren't also Amazon entrepreneurs. Every channel and every business model changes at some point.

This is what you do when things change. First of all, stay quiet among the noise unless you are overtly doing something wrong, which you should have stopped doing in the first place. If you're not doing anything wrong, you sit back and you wait for it to shake out.

Couple of years ago there was a big crackdown in email marketing. The services that did follow up sequences and broadcasts like the big guys like Mailchimp and AWeber started shutting down accounts all over the place.

And a lot of good people, myself included, were worried that we were going to get shut down and our lists were going to disappear. They were doing this to cut out people who were spamming and ruining it for everybody else. And they called me and they told me all the things that a lot of people were doing and that you weren't allowed to do an email marketing. All things I already knew. But they were trying to be compliant with some legal enforcement and to make sure that spammers and black hatters were gone. And a lot of people freaked out for a while. The marketplace got cleaned up and then it got quiet.

You also see.

In a couple of years ago there was a big crackdown on CPA offers cost per action affiliate programs and the intent was to shut down. Aggressive usually supplement companies who were forcing people into continuity programs that they didn't want to be in and they could never cancel. And they this got cleaned up and a lot of people were affected. And once it was cleaned up, everything went back to normal. For those who, who were doing things the right way. When you have a bunch of people enter into a marketplace and do things the wrong way, you have to experience adjustments. As I record this the previous week, the past week was crazy for the stock market. The market went up and down thousands of points and settled after falling about 1,000 or 1,500 points. When you have a bunch of people over by the market, you have to come in and have corrections. And in business, when you have a bunch of people come in and start playing not by the rules and making it bad for everybody else who's trying to run a legitimate business, you have to go through corrections. You have to go through adjustments. It is the case in every market, every channel, every business model. You have to go through periods of boom and correction. They are healthy and necessary as a part of the process. Your job is not to freak out about it. Your job is to put your company in a position that weathers the storm and was not dependent upon the things that got consolidated in the first place. That is your job. So when things change, when things go through ambiguous adjustments like they did for Amazon entrepreneurs in the past few weeks, first sit back and wait for things to shake out. As people get consolidated, as people leave the marketplace, as, as companies get shut down that need to get shut down, continue working on your long term strategy, Your long term strategy that weathers storms, that is not dependent upon channels and certainly not dependent on loopholes in channels. You analyze what is going to grow your company over the next three to five years rather than what you can exploit over the next 10, three to six months. Now, some factors are going to play into that long term strategy. For example, we all know, and I have touted for a long time that launches have their place in your overall marketing strategy. That will never change. We did a launch through this time, we did several actually, across my different brands launches to get new products to our customers, to flood the market with our products and services so that people would spread them by word of mouth by giving modest discounts to our existing customers so that they can try our new products. Because chances are they're going to try it, love it and come back and buy more. We've done that. We continue to do that across multiple brands. We've laid a little bit quieter than we normally would as we wait for some of the noise to shake out. And hopefully some of our competitors that we know are breaking the rules to get the axe handed to them. But launches will always have their place. Otherwise sites like Kickstarter would not exist. If it's unethical to have a list of people who buy products at a discount or at full price, then very few people would be in business. The launch process has existed for many more years than Amazon has. The game at which you do that sometimes changes. And maybe the launch game will also change and adjust along with the marketplace as it matures or terms of service adjust. But the fact of the matter is that your own launches or services that make launches a little bit easier will always exist. They will always have their place, even. Even if the overall strategy changes. For example, as of right now, I have reason to believe that Amazon is adjusting some of their algorithm to stop rewarding free giveaways and dollar giveaways that come from the big launch services as a way of shielding against the natural inflation of those sales. Big discount, big discount giveaways, flooding the market and giving the algorithm what it wants. I think they're shielding against it. They're not getting rid of it, they're not penalizing it, but it's becoming somewhat less effective. But overall it still plays a factor in the marketing process. And the way that Amazon is rewarding those types of services or those types of sales is, is just adjusting. But for those who say that you should now dance around Amazon and you should not get customers discounted products or you should not mail your list about new products are missing the overall point, launches will always have their place in the marketplace. So when things change, sit back, wait for things to shake out, analyze and refine your long term strategy. And three, it is always a good idea to ask the question, what happens if I am negatively affected by this? Or maybe more appropriately, how do I get independent of some other place that is controlling my business? Most entrepreneurs right now who are based on Amazon are completely dependent on that channel. That is the fact of the matter. They have found a channel, they have exploited the channel and they, they're completely under control of that channel. They, that's, that's a cash flow business, not a sustainable business. And it's fine if you want to have a cash flow business, as long as you recognize that at any point that channel can shut you down. If you make the big, the big dogs unhappy, they can completely shut you down. So are you getting independent of Amazon? Are you building your customer list? Are you building up your own store? Are you pursuing other channels? Do you have sources of buyers and traffic outside of Amazon? If the answer is no, then you've been building your business on sand from the get go. When you're starting out, that's fine. And that's where launches come into place. That is where.

Getting reviews comes into place. But once you have maximized that channel, you have two choices. One is to try and protect your territory, which is just being completely dependent on launch after launch after launch, or turning the black hat to prevent customers from overtaking you. Or you can get bigger. You can put on your big boy or big girl pants and grow a real business. Because now you have the sales channel that is going to fund you hiring good people and moving into other channels, which is what I would recommend that people do. The game will always change. Just like business has changed for I don't know how long has business existed. It always changes and it will always change from here on out. If you buy into the idea that businesses will never change and that your life will stay pretty much the same and you've built this amazing thing and it's never going to be impacted, you're about to have a massive wake up call. A lot of people are about to get creamed. As consolidation continues to mature, those who succeed are going to be those who think far bigger than a channel that they've become addicted to and get independent of other sales channels and start to control their own traffic in sales. That's how you build a real company. That's how you build a big business. You can make plenty of cash flow taking advantage of channels, but you build a real business by building something that is independent of that. So if you're freaking out or if you're worried about the recent changes, it's okay to sit back and wait for things to shake out. I did that in the stock market this week as there was a major craze of volatility. There's a temptation to sell and there was a temptation to buy depending on the day.

My response to it Sit back and wait. Let it shake out. Let everyone else make the mistakes as they freak out, laugh at all of the noise, enjoy the fireworks and reanalyze your long term strategy. Do some short term things factor into that long term strategy? Absolutely. But if you've been dependent on those short term strategies as your long term plan, you you were about to get creamed anyway. So refine your long term strategy. This is a nice analogy for both investing and in business, especially with these recent changes and they happened in the same week. While everybody else is freaking out and adjusting their short term strategy and trying to figure out what loophole they're going to exploit next, it's a good opportunity for you to pause, sit back, watch things shake out and reinvest and reanalyze into your long term strategy by doing things in a long term vision from the get go. You think past small changes like this and while short term opportunities play a factor into that, if you're addicted to those, it's time to put on your big boy or big girl pants. Factor them into part of the long term strategy, but think much bigger than everybody else is. I happen to help people do this at a workshop called the Next Level. You can find out more about that at next level video series.com if you are addicted to these short term wins and you're doing well, but you need to think beyond where you've been up until this point. Head to next levelvideoseries.com I help people put on their big boy or big big girl pants as they navigate their way to building a much bigger, more insulated, more secure business. One more point. Stop listening to people who claim to have a workaround to changes like this, or people who are peddling that they have the answer around changes in the marketplace like this. There's a lot of BS that gets thrown during changes in marketplaces like this from people who have something to sell and claim to have the answer or have the new loophole around the change. That's the exact opposite of what you want to listen to. Shut out the noise, stop freaking out. Reinvest into your long term strategy. Use this as a wake up call to think beyond where you've been thinking and beyond the limitations that have got you to this point. And when you have done that, you will be building a much bigger business and a better business in the first place that will be more immune to changes that you might have experienced in the last few weeks. Thank you for listening and I'll see you on the next show.