Amazon abruptly stopped buying goods from third-party sellers
Amazon is reportedly going cold turkey on thousands of vendors.
The e-commerce behemoth has canceled orders with many wholesalers, pushing them instead to sell directly to consumers on its marketplace, Bloomberg reported today (March 7). Having vendors sell directly to customers is a better arrangement for Amazon because it can charge merchants for services like storing and shipping products and take a commission on each transaction, plus it avoids the risk of buying inventory that doesn’t sell.The shift in strategy comes as several of Amazon’s core businesses have slowed. For the fourth quarter of 2018, Amazon reported 12.5% year-over-year growth in its online stores segment, significantly slower than the 19.7% annual growth rate it posted in the 2017 fourth quarter. Third-party seller services, Amazon’s business of making money from services provided to merchants who sell on its marketplace and commissions on those sales, brought in $13.4 billion in revenue in the quarter that ended Dec. 31, 2018, but also posted its slowest growth of the year....MORE
And from engadget, March 11:
Amazon lets third-party sellers offer lower prices on rival sites
It could be in response to political concerns.
Amazon just made online shopping slightly more competitive. A Reuters source has learned that the internet heavyweight has stopped telling third-party sellers that they're forbidden from offering lower prices at rival sites. The insider didn't explain why Amazon made the move, and Amazon declined to comment on the decision. However, it follows political inquiries that might have put pressure on the company to take action.
Senator Richard Blumenthal wrote to the FTC Commission Chairman in December arguing that Amazon's policy could "stifle" competition and "artificially inflate prices" for shoppers. While it's not certain that the FTC intended to investigate, Amazon's relaxed approach could address potential criticism by allowing sellers more flexibility in where and how they pitch their goods -- and, of course, lower prices for customers in the process....MORE
