Amazon is about to kill off thousands of small businesses
In his annual letter to shareholders, Jeff Bezos, Amazon’s chief executive and the world’s richest man, regularly likes to boast how much his company is helping small business thrive.
Sometimes the 56-year-old billionaire will pick out companies that have done particularly well. At other times he will present figures showing how independent sellers now make up 58 per cent of all items on the online retailer’s website worldwide, demonstrating how their sales are growing faster than those of Amazon itself.
That was before the pandemic hit and everything changed. In one fell swoop, Amazon has proved the power it has over hundreds of thousands of businesses worldwide who have found themselves mercilessly reliant on the decisions of a single operator.
For nearly two decades, third-party sellers have been able to use a feature with the online retail giant called Fulfilment by Amazon (FBA). This allows sellers to use Amazon’s vast network of warehouses to store, pick, pack and ship their customers’ orders for a fee. There are roughly 2.1 million active independent sellers on Amazon, including just under 300,000 business in the UK, and only 6 per cent of them don’t use the FBA feature.
Now, however, Amazon has cut that short. Overwhelmed by the sudden surge in orders for basic goods, such as toilet roll, nappies and pet food, Bezos announced last month all third-party sellers of non-essential items could no longer use Amazon’s warehouses and shipping feature. Independent merchants can continue to sell non-essential products on the website but they have to manage everything else on their own. The suspension was due to end at the start of this week but now Amazon has told third-party sellers it does not know when operations will be fully restored.
Book publishers have described the decision as “devastating”, while many businesses are now fearful they will go bankrupt. The policy has a ripple effect. Writers are now struggling to get their books sold, manufacturers lose their clients, British winemakers struggle to ship abroad. Businesses have been rushing to find alternative ways to get their products to customers, some going as far as driving them to customers’ doorsteps themselves.
At a time of need, this army of third-party sellers who helped fuel Amazon’s $280 billion revenue in 2019 have been left out in the cold. When the pandemic subsides, the nation’s regulators should ensure one company cannot hold so much sway over so many. Yet in reality, by that time, it seems many businesses may well have gone bankrupt while Amazon will be stronger than ever.
Amazon must love coronavirus
With the guidance from our elitist betters to stay home and order everything in, corporations like Amazon must be making a mint. I can't speak for others, but I'm so disappointed with Amazon that I'm well on my way to remaining with Amazon only for digital content that I've already purchased. I'm that disgusted.
I'm sure Amazon has competent software people to implement its search algorithms, so it must be purposeful that they don't work as expected. You can try to make a narrowly targeted search phrase, but Amazon opens it up to things that aren't the slightest bit related. On top of that, "free" delivery is included in the price (so it costs more), and the item is sometimes not available for over a month.
For example, you can certainly search for "water enhancer with electrolytes." It didn't limit itself to showing me water enhancers with added electrolytes. It included basic water flavorings and water enhancers with vitamins but not electrolytes. Is this an electronic version of making customers walk past everything in the store to buy the most popular items, to take advantage of impulse buying? I suspect so. It's almost as annoying as the brick-and-mortar version of the ploy, but at least I'm not abusing my arthritic knees trying to get the one item I need at the back of the store. I'm also not buying their water enhancer because I'm ticked off.
Try searching for "made in USA" items. (Skip looking for "not made in China." That only selects for "made in China.") The search results include a number of items that do not say "made in USA" anywhere in the product description. Asking about the manufacturer often yields the information (from an Amazon customer who has purchased the item) that the product was made in China, Vietnam, Cambodia, etc. To me, this goes beyond the annoyance of clutter into deceptive advertising. Sure, Amazon has a liberal return policy, but you still have the inconvenience of picking it up and returning it, and the additional delay before you try again to get an item that was really manufactured in the USA.
Enter the Amazon love for coronavirus argument: we would order a lot less and tolerate a lot less annoyance in normal times, when we could go get basics at local stores. We would make more of our own food instead of buying Ramen at double to triple the in-store price. We would go to restaurants only a few times per week. If you're unemployed on top of coronavirus worries, you cannot afford to live as if you had income. That credit card is going to have to be paid for eventually.
Welcome to shopping slavery. And you thought you had it bad before.