“The findings of this report make clear the need for action by policymakers. As a result, the share of sellers who have left other carriers and signed on to FBA has soared in recent years,” the report further said.īy compelling this captive base of businesses to use its shipping service, Amazon has grown into a major logistics provider almost overnight. “Amazon’s algorithms heavily favor sellers who do so, making FBA all but required in order to generate sales on the site. In a similar fashion, Amazon has compelled sellers to buy its warehousing and shipping service, Fulfillment By Amazon (FBA). They even outpaced Amazon Web Services (AWS), the company’s massive cloud-computing division,” the report claimed.ĪWS is on track to post about $61 billion in sales this year – a vast sum, but still, only half the revenue Amazon will generate from seller fees. ![]() “They grew faster than Amazon’s own retail sales and faster than its Prime membership program. ![]() That’s up from 30 percent in 2018, and 19 percent in 2014,” she noted.Īccording to the report, over the last few years, seller fees grew much faster than every other major revenue stream at Amazon. “Using a variety of fees, Amazon now pockets a 34 percent cut of the revenue earned by independent sellers on its site, our analysis found. In a statement to TechCrunch, Amazon called the report “inaccurate,” and added that it “conflates Amazon’s selling fees with our optional add-on services”.Īccording to Mitchell, the staggering scale of these fees provide evidence of Amazon’s monopolization of the online market and the high costs that come with it. “I think what you’re seeing there when you see these fees going up, what’s really happening is that sellers are choosing to use more of the services that we make available,” Bezos had replied to a question. Over the last few years, Amazon has faced growing scrutiny for spying on sellers, copying their products, and giving its own brands preferential placement in search results.Īmazon Founder Jeff Bezos recently told the US Congress that the increasing amount of money going from sellers to Amazon is something of an “optical illusion”. ![]() They are the essential fuel that feeds its market-domination strategies, enabling it to absorb massive, predatory losses designed to lock-in market control and fund breakneck expansion,” said study author Stacy Mitchell. “These profits are not only the spoils of Amazon’s monopoly power. In 2019, Amazon pocketed $60 billion in seller fees, and this year, its take will soar to $121 billion, according to the report titled ‘Amazon’s Toll Road’ by the Institute for Local Self-Reliance.Įven as these exorbitant fees bankrupt sellers, they are generating huge profits for Amazon, a fact that the tech giant conceals in its financial reports. A significant report from a US-based nonprofit organization has claimed that Amazon is exploiting its position as a gatekeeper to impose steep and growing fees on third-party sellers, raking in big moolah.
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