Two months ago Amazon caused a tidal wave of concern and endless questions from small vendors when the e-commerce giant canceled weekly purchase orders from small vendors across the board with no notice. The directive was clear: smaller sellers needed to move to Amazon’s third-party marketplace and manage their own direct to consumer sales themselves. Amazon backed off this move a short while later, but now new developments and mounting speculation have vendors confused and concerned once more.
The biggest warning sign that a small vendor shake-up is back on – is this: typically Amazon renegotiates terms with vendors at this time of year, but as yet, that’s not happening. Our team at Channel Key has heard this from several Amazon clients already.
Amazon maintains nothing’s going on but Bloomberg reports there’s a strategy in play to move large numbers of small vendors to the third party marketplace. That’s a win-win for Amazon – refocusing resources on the largest and/or most profitable brands and driving sales of add-ons like enriched analytics and Prime shipping for those smaller vendors forced to move.
What’s all this mean? If you’re a smaller vendor, you’re looking at business upheaval, a switch to managing your own affairs and likely unexpected cost. Talk to one of our Channel Key team members if you need help or more information.