Stacy Mitchell joined WBUR’s On Point for two episodes in their new series The Prime Effect — about Amazon’s power as a monopoly, the inner workings of its online marketplace, and how the tech giant preys on third-party sellers. Here are a few highlights of Stacy’s conversation with host Meghna Chakrabarti, How the Amazon Marketplace Shapes How We Shop. (You can also listen to Stacy on the first episode of the series, What is Amazon?)
On visualizing how big Amazon really is, Stacy explains, “It’s vast, I mean, Amazon Marketplace, the fees that Amazon takes from third-party sellers, last year nearly $90 billion. That’s a quarter of the company’s revenue, and twice as much revenue as it’s getting from AWS, Amazon Web Services, its huge cloud computing division. So this is massive. And marketplace really illustrates what it is that Amazon is all about. Amazon wants to be the infrastructure for the exchange of goods and service. They want to be the backbone of how commerce works, the platform in which transactions happen. And so marketplace really is an illustration of their core power.”
On how small businesses are doing on Amazon’s platform, she says, “We did a survey of about a thousand independent businesses across the U.S. in 2019. And only 11% of those who are selling on Amazon site describe their experience as successful. I mean, most sellers are not succeeding. And what we see in the data is that sellers have a relatively short lifespan of being on the site. It’s sort of like going to a casino. You might win a hand. You might even have a good streak. But at the end of the day, only the house wins. And that’s the basic setup here.”
For more, including understanding Amazon as a monopoly, the fees it imposes on third-party sellers, and the internal Amazon memo that was unearthed during last year’s Congressional hearing, find Stacy’s episodes of The Prime Effect here.
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