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Home / Business / Amazon sellers are panicking after the company has canceled orders – Quartz

Amazon sellers are panicking after the company has canceled orders – Quartz



By the way, Amazon goes cold turkey on thousands of vendors.

Ecommerce behemoth has canceled orders with many wholesalers, and pushed them instead of selling directly to consumers in their marketplace, Bloomberg reported today (March 7). Having sellers selling directly to customers is a better event for Amazon because it can charge sellers for services such as storage and shipping products and take commissions on each transaction, plus it avoids the risk of buying non-selling inventory.

The shift in strategy comes as several of Amazon's core businesses have slowed down. For the fourth quarter of 201

8, Amazon reported 12.5% ​​growth in this year's online store segment, significantly slower than the 19.7% annual growth rate recorded in the fourth quarter of 2017. Third-party merchant services, Amazon's money-making services offered to sellers selling on their marketplace and commissions on that sale, led to $ 13.4 billion in revenue in the quarter ending December 31, 2018, but also provided slower growth of the year.

Forcing more sellers into the market can help Amazon revive these numbers, especially in the third-party seller service segment. Meanwhile, Amazon is investing heavily in its own brands and others being sold exclusively on the site. Many of these brands will ultimately compete against goods that are currently purchased by Amazon from third-party sellers. This can also be a reason why the company is eager to shift these third-party sellers to its marketplace.

The company's new attitude has put some sellers in a tight place, Bloomberg reported, as they source their products from manufacturers months before they actually sold them. Participants at this week's ShopTalk retail conference said the report abruptly and without explanation stopped sending regular product orders last week. This may cause sellers to have no choice but to sell their goods at Amazon's marketplace for now.

"If you depend on Amazon, as many of these vendors are, you have a lot of trouble," Dan Brownsher, CEO of e-commerce consulting Channel Key told Bloomberg. "If this continues, it can put people out of service."


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