Business

After Destroying Brick and Mortars, Amazon's Reportedly Planning to Cut Ties With Thousands of Small Vendors




Photo: Justin Sullivan (Getty)

its platform as helping them "reach hundreds of millions of customers around the world." But Bloomberg reported on Tuesday that the e-commerce giant is about to cease bulk ordering for "thousands of mostly smaller suppliers," which could have a devastating effect for those mom-and-pop operations. Amazon, however, disputes the report.

"We informed Bloomberg prior to publication of their article that their sources are wrong," and Amazon spokesperson told Gizmodo a statement by email. “We review our selling partner relationships on an individual basis as part of our normal course of business and any speculation of a large scale reduction of vendors is incorrect. Like any business, we make changes when we see an opportunity to provide customers with improved selection, value and convenience, and we do this thoughtfully and considerately on a case-by-case basis. ”

Because of Amazon controls a huge chunk of market share, the company has immense power over the sellers on its platform – everything from reportedly pushing brands to changing their packaging to dictating which brands can and cannot advertise their products on its platform. Citing sources familiar with the matter, Bloomberg reported that smaller vendors are currently turning around less than $ 10 million in sales will now be no longer receiving bulk orders from the company.

The report states that Amazon also has renewed contracts with some small businesses and has not filled open positions that would otherwise be those vendor relationships. Instead, it will turn to bigger-name brands like Procter & Gamble to help it stay competitive and cut costs. [AccordingtoAmazonitselfhalfofalloftheitemssoldonitssite"comefromthemillionsofsmallandmedium-SizedbusinessesthathavechosentogrowtheirbusinessonAmazon”WhileAmazondisputesBloomberg'sreportitisknownforpullingtheplugonproductsknownas"CRaP"internalslangfor"Can'tRealizeaProfit"apparentlyforthcomingmovewillaffectthousandsofbusinessesthathavetomaketheswitchfromAmazonwholesalertoindependentmarketplacevendorswhichaformersellercustomscantakeupto120daysandcouldmakeorbreakthosebusinesses'holidaysales

If correct, it would probably seem that Amazon is looking to cut back costs at more than just a few individual vendors who are selling as well as the company thinks they should be. If Bloomberg noted, it also comes at a time when Amazon must be more competitive with big box stores trying to make its model successful with online sales.

If nothing else, this move would seem to be the most precarious position that all businesses that sell on Amazon — but the smaller ones — face as the company works to boost its bloated bottom line and make Jeff Bezos, already the world's richest man, ever richer.



Source link

Back to top button