On Capitol Forum: Amazon Charges Steep Fees at the Expense of Small Businesses

Date: 5 Jan 2022 | posted in: Retail | 0 Facebooktwitterredditmail

Stacy Mitchell joined Teddy Downey on Second Request, the Capitol Forum’s podcast, to discuss ILSR’s new Amazon’s Toll Road report, which finds that Amazon is exploiting its position as a gatekeeper to impose steep and growing fees on third-party sellers.

There are three primary fees that Amazon charges, Stacy explains. Referral, advertising, and fulfillment fees — referral fees are mandatory while advertising and fulfillment are technically optional. “But the reality is that if you don’t buy those services from Amazon, you end up not making any sales on their site.” Sellers are finding that instead of showing up on the first and second page search results because of positive product reviews, they won’t show up at all if they don’t buy ads to be there. 

Amazon is at center stage in the antitrust arena. Stronger antitrust enforcement has gained substantial public support and press in the past year. Small businesses themselves have raised their voices and become a part of the growing antimonopoly movement. To speak out, in itself, is a difficult task Stacy explains. “Third party sellers and bigger businesses fear retaliation from Amazon.” 

Stacy argues that breaking up Amazon is a key solution to its monopoly power. “We need to focus on resolving the integration by splitting Amazon into several stand alone companies. Marketplace, Retail, Logistics, and AWS. The problem that we have right now is that Amazon is using its power over Marketplace sellers to compel them to use its logistics.” 

It is time to act to save small independent businesses. Fighting corporate control is the first step. “Amazon is the number one threat facing entrepreneurs in many different industries. We are facing a collapse of small and independent businesses in manufacturing and in retail because of Amazon’s power.” 

Listen to the full episode here

Read our Amazon’s Toll Road report here.

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Follow Luke Gannon:
Luke Gannon

Luke Gannon is the Research and Communications Associate for the Independent Business team.

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Follow Stacy Mitchell:
Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.