Amazon’s marketplace for third-party sellers can provide a major distribution boost for small retailers. But, as the Wall Street Journal outlines today, selling through the ecommerce goliath comes with a cost. Some retailers are claiming that Amazon basically uses the platform as means of figuring out what to sell and how much it should cost.
Shocker: The Internet’s very own Wal-Mart isn’t wholly a friend to the little guy. Color us dumbfounded.
For example, one small retailer started selling plush NFL mascots (adorably dubbed “Pillow Pets”) in the marketplace. They were doing a pretty good business, until Amazon started stocking them at the same price, and as a featured product.
“I tried lowering the prices, but Amazon would always match my price or go lower until I eventually gave up” competing on price, says the owner. Yeah, out-cost-cutting Amazon probably isn’t going to work.
Amazon “declined to discuss pricing or purchasing strategies” with the Journal, but the marketplace VP told the paper that, “All of our focus is on helping making sellers successful,” while another exec reported that sellers average a 50 percent sales bump when they use both the marketplace and Amazon fulfillment. Nor are retailers universally miffed with the company. One Georgia-based sandal-maker attributes 10 percent of his $3 million in annual online sales to the site and says, ”It transformed our business to be on Amazon.”
Still, it’s probably best to assume that Amazon’s motives are business and not community oriented.