SEATTLE – When Jeff Peterson’s Amazon seller account was hacked recently, he frantically tried to reach Amazon’s customer service for help restoring access to his sports memorabilia store.
As nearly 4,000 fraudulent orders rang up, the Garden Grove, California-based seller called Amazon’s seller support line, phoned its main customer service number, reached out via a separate account on its Canadian site, and even sent an email to chief executive Jeff Bezos. Nothing worked.
“I can’t get any answers from Amazon at all to fix this,” Peterson said, as negative reviews of his service accumulated, decimating his business.
One thing he hadn’t done was pay as much as $5,000 a month for a program Amazon offers sellers as a way to get quick help from a real person.
Amazon has become a powerful marketplace alongside its role as an online retailer, with more than 2.5 million third-party sellers who have become global businesses on its platform. Early on, Amazon compelled sellers to use its warehouses to guarantee speedy Prime shipping, in addition to other programs that largely benefited consumers. But now, sellers and former employees familiar with Amazon’s internal strategy say the company is increasingly focused on boosting its profits on the backs of its sellers — often without any clear upside for customers.
The services include charging sellers thousands of dollars to speak to account managers, as well as making it necessary to purchase ads to guarantee the top spot on a search page. Plus, Amazon is aggressively pushing its own brands – something that may be cheaper for consumers in the short run, but demonstrates its overall power over pricing and merchandise on the site. That gives it an advantage over rival products and sellers who rely on Amazon for their livelihood and have few alternatives if they want to thrive selling online.
Amazon says its success is dependent on those sellers and insists it always prioritizes shoppers.
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As much as a third of every dollar merchants make goes back to Amazon, according to consultants and sellers. That helped Amazon generate $42.7 billion in revenue from seller services such as fees and commissions last year, a number that has nearly doubled in two years.
That has drawn the attention of regulators and lawmakers both in the U.S. and abroad, who are investigating Amazon and other large tech companies for potential violations of antitrust law and abusing dominant marketplace power. Traditionally, U.S. regulators have focused on consumer harm, but officials recently emphasized the need to look at the way several tech giants are using their market clout to lower quality, reduce innovation and diminish consumer privacy as officials consider regulating giants of the digital economy.
With regard to Amazon, the Federal Trade Commission appears to be probing how the online retail giant decides who wins each sale and at what price, as well as how Amazon can harm competition by suspending seller accounts or changing its rules with little notice and without appropriate ways to appeal those decisions. The FTC, which has taken on oversight of Amazon, has been reaching out to sellers on those topics in recent weeks, according to sellers who declined to be named due to concern about retribution from Amazon. FTC spokeswoman Cathy MacFarlane declined to comment.
In July, the European Union launched an investigation into Amazon’s conflicting roles as both a platform and a retailer of its own products. And the German competition agency reached a deal with Amazon, in part requiring the company to offer third-party sellers 30 days’ notice before suspending accounts. Amazon said at that time it would cooperate fully with the EU “and continue working hard to support businesses of all sizes and help them grow.”
Amazon’s approach is similar to the way Apple built its iPhone app store, in which developers both play by its rules and compete against the tech giant. And it also resembles the way Microsoft, decades ago, used technology to restrict the types of software that could run on its Windows operating system even as it developed its own competing applications.
Amazon notes that third-party sellers sold $160 billion in merchandise on the site worldwide in 2018, or 58% of all physical merchandise sold. “Third-party sellers are kicking our first party butt. Badly,” Bezos wrote in his annual letter to shareholders in April, winning against the company’s own retail operations. (Bezos owns The Washington Post.)
Sellers are a crucial piece of Amazon’s business, and the company invests billions of dollars in digital tools and physical infrastructure to help them thrive, said spokesman Jack Evans.
“Amazon only succeeds when sellers succeed and any claims to the contrary are simply wrong,” Evans said. “Sellers have full control of their business and make the decisions that are best from them, including the products they choose to sell, pricing, and how they choose to fulfill orders.”

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Evans disputes the company has prioritized profits over serving consumers, noting that it invests heavily in driving traffic to its site and improving its infrastructure, which benefits third-party sellers, too. Many of the company’s fees are for optional services, and it has recently lowered some.
Still, many third-party sellers say they worry about Amazon’s dual role: a massive open marketplace and a giant competitor in that marketplace. Those sellers complain —increasingly publicly — that Amazon’s ever-increasing power has resulted in a system in which only a few can succeed, and only through paying up.
For every dollar that shoppers spend on products from third-party merchants, as much as 30 to 35 cents goes back to Amazon to cover commissions, advertising buys, account management deals and more, said James Thomson, a former senior manager in business development at Amazon and now partner at brand consultancy Buy Box Experts.
Two-thirds of U.S. shoppers usually start their search for products on Amazon rather than on Google or another retail website, according to a March survey from Feedvisor, a company that helps Amazon’s third-party sellers with pricing. When people shop on Amazon, they often don’t recognize whether they’re buying products directly or from a third-party.
Amazon is the largest online retail site, and it is expected to account for about 37.7% of U.S. e-commerce sales this year, according to the research firm eMarketer. And many sellers say business from Amazon accounts for 75% or more of their annual sales.
It can be less costly to do business on other platforms. Some other marketplaces don’t charge the same broad range of fees on top of their commissions. Walmart’s commissions for sales by third-party merchants are similar to Amazon’s, according to the companies’ websites. EBay is cheaper still, taking, for example, just 9.2%the cost of jewelry sales compared to 20% at Amazon. EBay, though, also charges another roughly 3.5% payment-processing fee, company spokesman Ryan Moore said.