Amazon touts small enterprise success amid third-party vendor scrutiny

Amazon on Tuesday launched new information touting the success of sellers on its third-party market amid mounting scrutiny from lawmakers of its private-label enterprise practices.

Amazon launched the third-party market in 2000, permitting everybody from small companies that function out of their storage to established manufacturers to promote their wares on the location. It has since grown to embody tens of millions of sellers and now accounts for roughly 60% of Amazon’s general retail gross sales.

However in current months, Lawmakers, antitrust watchdogs and advocacy teams have voiced rising issues round Amazon’s remedy of third-party sellers and whether or not the corporate unfairly favors its personal merchandise on its market.

In a report issued Tuesday, Amazon sought to characterize the roughly 2 million small- and medium-sized companies that promote on its web site as “promoting companions,” lots of which have benefited from the outsized progress of e-commerce throughout the coronavirus pandemic.

Third-party sellers within the U.S. netted a mean of $200,000 in gross sales within the 12 months ending Aug. 31, up from $170,000 throughout the identical interval final yr, Amazon stated. U.S. sellers bought greater than 3.8 billion merchandise over the interval, in comparison with 3.4 billion within the yr prior.

The report, which comes forward of Amazon’s annual vendor convention on Wednesday, additionally highlights the expansion of Amazon’s third-party vendor providers and its rising investments within the market.

Half of Amazon’s roughly 500,000 U.S. sellers used Success by Amazon, a service that packages and ships orders for sellers from the corporate’s warehouses. Sellers who used FBA noticed a 20% to 25% improve of their gross sales on common, Amazon stated.

As a part of broader antitrust scrutiny into Amazon’s enterprise practices, regulators have zeroed in on the corporate’s logistics enterprise and examined whether or not the corporate pressures sellers into utilizing its providers in trade for preferential remedy on {the marketplace}.

Extra just lately, lawmakers have questioned Amazon over whether or not it makes use of third-party vendor information to launch private-label items and boosts these merchandise in search outcomes.

5 members of the Home Judiciary Committee despatched a letter Sunday to Amazon CEO Andy Jassy urging him to reply to allegations that high executives, together with founder and govt chairman Jeff Bezos, mislead or lied to Congress about its private-label enterprise practices.

Final week, Reuters and The Markup revealed experiences that Amazon used inside vendor information to repeat standard merchandise and rigged search outcomes to favor its personal private-label merchandise. These findings adopted earlier reporting from The Wall Avenue Journal, which discovered Amazon workers developed workarounds to Amazon’s insurance policies in order that they might evaluate particular person vendor information and launch competing merchandise.

Amazon has denied that the corporate and its executives misled the committee, saying it has inside insurance policies that prohibit workers from utilizing single sellers’ information to develop its personal merchandise.

Dharmesh Mehta, Amazon’s vice chairman of buyer belief and companion help, instructed CNBC that media experiences detailing the corporate’s use of vendor information are inaccurate.

“Now and again you see hypothesis round short-term, profit-driven actions and Amazon wouldn’t do this,” Mehta stated. “It simply does not make sense as a result of we’re on this for the lengthy haul with our promoting companions.”

Along with items from third-party sellers, Amazon additionally sells its personal merchandise below the AmazonBasics branding, together with different model names. Sellers have complained that Amazon unfairly competes with third-party companies on its platform, with some alleging Amazon immediately knocked off their items.

They’ve additionally argued that Amazon hampers third-party sellers companies by means of an more and more automated account suspension and appeals course of, which may be prolonged and financially crippling.

Mehta stated nearly all of third-party sellers are “thriving” on Amazon.

“They’ve quite a lot of selections for the place to promote their merchandise,” Mehta stated. “They will create their very own web sites, promote by means of different channels, promote offline and plenty of sellers proceed to decide on Amazon.”

Nonetheless, Mehta acknowledged that Amazon has room to enhance its relationship with retailers, whether or not it’s addressing enforcement points or simplifying the promoting course of.

“We have now to proceed working tremendous onerous on daily basis to earn sellers’ belief,” he added.

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