In January 2022, the Institute for Local Self-Reliance surveyed 908 small, independent businesses across the U.S.
Among those 908 businesses, 94 reported being third-party sellers on Amazon’s Marketplace. We asked this subset of respondents a series of questions about selling online and their experiences with Amazon. This report presents their responses. (Findings from the full survey are presented in a separate report.)
Key Findings:
- 74% believe that Amazon’s algorithms are unfair and favor Amazon’s own products over those of sellers.
- Asked if the fees Amazon charges sellers are fair and reasonable, 74% disagreed, with 43% strongly disagreeing.
- 69% reported that it has become harder to succeed on the platform, and 62% said it was not possible to build a successful brand on Amazon.
Given these problems, why do small businesses continue selling on Amazon? When we asked sellers, 63% of respondents said there was no viable alternative. They have a point: Amazon captures a majority of online shopping traffic.
Perhaps most telling of all, 55% of Marketplace sellers said they would not feel comfortable speaking out about Amazon’s treatment of sellers. “Amazon can be extremely punitive in its dealings with its independent sellers,” one explained.
We also asked sellers about the policies they believe would improve the survival and success of independent businesses. These topped the list:
- ending subsidies for big business
- breaking up and/or regulating Amazon
- and strengthening antitrust policy and enforcement
About the Marketplace Sellers Who Responded
This snapshot of 94 Marketplace sellers includes a mix of web-only retailers and brick-and-mortar businesses that sell online. It includes both current Amazon sellers and businesses that used to sell on Amazon. It includes a range of businesses of different sizes, from small, one-person operations to companies with more than $10 million in annual sales.
Almost all of these businesses operate their own e-commerce sites and most sell on platforms other than Amazon. However, most depend on Amazon’s Marketplace for the bulk of their online sales.
Download the Findings: 2022 Independent Business Survey: Snapshot of Amazon Marketplace Sellers
Related: 2022 Independent Business Survey: Top Challenges and Policy Priorities
If you like this post, be sure to sign up for the monthly Hometown Advantage newsletter for our latest reporting and research.