The Recycler
  • G&G Masthead August 2024
  • Ambiente 2025 Masthead
  • Biuromax Masthead web banner March 2024
  • Katun Masthead Nov 2024

Amazon triggers panic among its wholesale suppliers

March 21, 2019

The online retail giant has been sowing fear among its wholesale suppliers as it stops buying products directly and instead urges them to sell directly to consumers via its marketplace.

As Bloomberg reports, by implementing this “less risky” selling strategy, Amazon.com Inc will accrue more cash as it frees itself of the costs of “purchasing, storing and shipping products.” It can also charge its suppliers for its services, while making a commission for every transaction.

The purpose of this sudden change in procedure is to help the online retailer “boost profits at the core e-commerce business”, but could have a big impact on suppliers as they will have to “quickly shift their sales tactics if the expected Amazon orders don’t come in.”

“If you’re heavily reliant on Amazon, which a lot of these vendors are, you’re in a lot of trouble,” said Dan Brownsher, who serves as Chief Executive Officer of Channel Key, a Las Vegas e-commerce consulting business which sells over $100 million (€87.6 million) of goods on Amazon annually. “If this goes on, it can put people out of business.”

“We regularly review our selling partner relationships and may make changes when we see an opportunity to provide customers with improved selection, value and convenience,” Amazon declared, though the company declined to make specific comments on the change.

This policy of silence has been extended to the vendors themselves, with some revealing that Amazon has ceased the submission of routine orders “often without explanation”. Meanwhile one vendor revealed that he had received a “canned response” from Amazon when he queried the absence of his weekly purchase order.

As a result of Amazon’s new strategy, more vendors “will be forced to sell on the marketplace or risk getting stuck with unsold inventory,” according to Will Land, CEO of Marketplace Valet in Riverside, California.

“When you get used to those big checks,” he said, “it’s hard to pull away.”

Categories : Around the Industry

Tags : Amazon Ecommerce Purchasing Vendors

  • Biuromax Nov 2024 Web Ad
  • Static Control June 2022 Big & Bold Ad
  • TN Core Nov Web advert
  • G&G web advert October 2024
  • GM Technology Nov Web Ad
  • Apex Web ad Nov 2024
  • Ink Tank No Web advert
  • Cartridge Web Nov Web Banner
  • IR Italiana Web ad January 2021
  • denner UK Web Banner Jul 2024
  • PCL Nov Web advert
  • Denner Feb 2024 Web Ad
  • CET Web ad December 2023
  • Zhono Web ad March 2024
  • HYB Web banner Jan 2024
  • Mito Web banner June 2024
  • ITP Web ad January 2021
  • ITP Web ad January 2021
  • HYB Web banner Jan 2024
  • Zhono Web ad March 2024
  • Mito Web banner June 2024
  • PCL Nov Web advert
  • denner UK Web Banner Jul 2024
  • CET Web ad December 2023
  • Denner Feb 2024 Web Ad
  • Denner Feb 2024 Web Ad
  • denner UK Web Banner Jul 2024
  • Zhono Web ad March 2024
  • HYB Web banner Jan 2024
  • CET Web ad December 2023
  • ITP Web ad January 2021
  • PCL Nov Web advert
  • Mito Web banner June 2024

The Recycler, Wittas House, Two Rivers, Station Lane, Witney, OX28 4BH, United Kingdom | Tel: +44 (0) 1993 899800 | Fax : +44 (0) 1993 226899
©2006-2023 The Recycler - Terms & Conditions - Privacy Policy including cookie use

Web design Dorset | Websites by Mark