CEC Marketplace Strategy & Management 2 — Questions and Answers
Question 1: A seller notices their Amazon listing ranks well but has a low conversion rate. Which factor is MOST likely to blame?
- High advertising spend
- Poor product images or insufficient reviews (Correct answer)
- Listing in a highly competitive category
- Using FBA instead of FBM
Correct answer: Poor product images or insufficient reviews
Conversion rate on Amazon is most directly influenced by listing quality elements like images, reviews, and compelling copy.
Question 2: What does the term 'flywheel effect' mean in the context of Amazon marketplace strategy?
- Using automated repricing tools to spin down prices
- A virtuous cycle where sales drive reviews, which drive more sales and ranking (Correct answer)
- Amazon's internal logistics network that spins inventory faster
- Rotating ad creative to avoid creative fatigue
Correct answer: A virtuous cycle where sales drive reviews, which drive more sales and ranking
The Amazon flywheel describes how increased traffic leads to more sales and reviews, which improves ranking and attracts more traffic in a self-reinforcing loop.
Question 3: Which metric best indicates the health of a seller's account standing on Amazon?
- Total sales revenue
- Account Health Rating (AHR) (Correct answer)
- Number of active ASINs
- Advertising cost of sale (ACoS)
Correct answer: Account Health Rating (AHR)
Amazon's Account Health Rating (AHR) aggregates policy compliance metrics and is the primary indicator of account standing.
Question 4: A brand wants to prevent unauthorized third-party resellers on Amazon. Which program gives them the most direct control?
- Amazon Vine
- Amazon Brand Registry with brand gating (Correct answer)
- Seller Fulfilled Prime
- Subscribe & Save
Correct answer: Amazon Brand Registry with brand gating
Brand Registry combined with brand gating allows authorized brands to restrict who can list against their ASINs.
Question 5: On eBay, a seller's 'Top Rated Seller' status primarily depends on which criteria?
- Total Gross Merchandise Volume (GMV) above $10,000
- Transaction defect rate, late shipment rate, and cases closed without seller resolution (Correct answer)
- Number of unique buyers per month
- Feedback score above 1,000
Correct answer: Transaction defect rate, late shipment rate, and cases closed without seller resolution
eBay's Top Rated Seller status is earned by meeting thresholds on defect rate, late shipments, and unresolved cases—not just volume.
Question 6: What is a 'race to the bottom' pricing problem in marketplace selling, and what is the best strategic response?
- Prices rise uncontrollably; use price caps
- Competing sellers continuously undercut each other; differentiate via bundles, exclusives, or private label (Correct answer)
- Marketplace fees increase over time; negotiate bulk rates
- Ad costs escalate; reduce spend to protect margins
Correct answer: Competing sellers continuously undercut each other; differentiate via bundles, exclusives, or private label
Race-to-the-bottom occurs when multiple sellers undercut each other on price; differentiation through bundles or private label escapes this trap.
Question 7: When expanding to Walmart Marketplace, which factor most critically differentiates it from Amazon for seller strategy?
- Walmart charges higher referral fees across all categories
- Walmart prohibits Fulfilled by Walmart (FBW) for new sellers
- Walmart requires competitive pricing versus its own .com prices and other channels (Correct answer)
- Walmart does not allow product reviews from verified purchases
Correct answer: Walmart requires competitive pricing versus its own .com prices and other channels
Walmart enforces price parity rules and will suppress listings priced higher than other channels, making competitive pricing a central strategic requirement.
CEC Marketplace Strategy & Management 2
A seller notices their Amazon listing ranks well but has a low conversion rate.
Which factor is MOST likely to blame?