Third-party sellers of Amazon who have been generating millions in sales for the company are heading towards their government bodies because Amazon is competing against them to ruin their business. Due to the third-party sellers, Amazon has maintained its retail dominance in the global market. Amazon’s third party business is $307 billion while the company’s whole business is around $1.1 trillion enterprise value. That means third-party sellers are comprising 58% of all merchandise sales. The first party platform is worth $93 billion.
Jeff Bezos, who is the founder of Amazon, described it straightway in his 2018 letter to the shareholders. He described that many small and medium-sized businesses from 1999 to 2018 had a compound annual growth rate of 52%. Some small sellers had a CAGR of 20%. That means third-party sellers are lowering the business of Amazon’s first-party friends.
As this issue is affecting Amazon seller performance, the sellers are complaining with the company for unfair advantage in accessing sellers data on the third-party platform. In 2016 Amazon had displaced a top-selling laptop stand with its own launched similar product at a half price. Due to the numerous number of complaints from the sellers, Amazon has suspended sellers account without any notice.
Scott Needham, CTO of Amazon marketplace seller BuyBoxer, said, “I’ve been selling on Amazon for seven years from the beginning, if you look at the mechanics of how things work, in some situations, it just wasn’t a fair marketplace.”