Amazon has been accused of being “no buddy of the small enterprise” after a report found proof that the net market has ramped up charges and promoting prices for sellers.
It discovered that between 2017 and 2022 Amazon had tripled the quantity it earned from charges for impartial sellers in Europe, together with for listings, deliveries and digital assist. That progress far outstripped the rise in gross sales, which doubled over the identical interval.
Evaluation of supply and storage prices for sellers within the UK, France, Germany, Spain and Italy, for instance, discovered costs had greater than doubled in some classes between 2017 and 2023.
Margarida Silva, a researcher on the Amsterdam-based Centre for Analysis on Multinational Companies, also called Somo, accused the web retailer of exploiting a “captive clientele”.
“For the previous 20 years Amazon has been increasing its monopolistic maintain over on-line purchasing in Europe. It’s now so dominant that impartial retailers who want to promote on-line can not keep away from it. Sellers are locked in to the platform and basically a captive clientele, making them a worthwhile supply of monopoly lease,” she mentioned.
Revenue from sellers’ charges jumped 6% final yr to €23.5bn, at the same time as retail gross sales fell 1%, in accordance with Somo’s evaluation of accounts for the group’s European arm, Amazon EU Sarl.
These charges don’t embrace the quantity sellers are charged to promote on the location. Amazon’s total promoting income has boomed in recent times: to €5.4bn in 2021 from simply €0.3bn in 2017, in accordance with Somo’s evaluation of native Amazon subsidiaries that ebook its advert providers throughout Europe. The group estimates that 51% of that quantity, or €2.75bn, comes from impartial sellers.
At Amazon On-line UK, the subsidiary that handles UK advert bookings, promoting income rose from €0.3bn in 2018 to €1.9bn in 2021 – a sixfold enhance. The extra sellers and different enterprise purchasers bid for a selected key phrase, the dearer it will get.
“Amazon sellers appear to be more and more shouldering Amazon’s prices, together with the prices of the enlargement of its community of fulfilment centres and likewise the digital providers taxes in France and the UK,” Somo’s report says.
It provides: “Amazon’s squeezing of sellers is an important pillar of its European enterprise as income from impartial sellers’ charges is rising sooner than its core enterprise, its European retail arm.”
One UK vendor advised the Guardian that his charges, together with promoting, amounted to nearly 40% of the pre-VAT worth of his merchandise. “Gross sales are passable and stagnant, which possibly I can’t blame Amazon for, however charges are fairly excessive and repair is poor,” he mentioned.
Amazon is underneath investigation by the UK’s competitors watchdog over whether or not it has been giving its personal manufacturers and people utilizing its logistics providers unfair benefit over third-party rivals on its on-line market.
A separate European Fee investigation checked out related points final yr, leading to Amazon making a collection of commitments to deal with the issues, together with a centralised criticism mechanism open to all sellers and supply corporations.
Amazon mentioned its income had elevated as a result of its European sellers had “grown their companies by way of Amazon”, including: “Amazon is investing greater than ever in supporting the expansion of our promoting companions and serving to them obtain report gross sales … Sellers who select to buy non-obligatory logistics or promoting providers from Amazon achieve this as a result of they see incremental worth to their enterprise.”
The retailer mentioned paying for Amazon to retailer, choose, pack and ship merchandise was an non-obligatory service, which it claimed was 30% cheaper than customary providers supplied by different main logistics operators, and shopping for promoting was additionally non-obligatory.
Amazon mentioned it strongly disagreed with Somo’s characterisation of its market place as monopolistic. It mentioned the market share figures “basically misrepresent how the retail trade works” as a result of they didn’t keep in mind that the majority retail gross sales are made in bodily shops, including: “The retail house is extremely aggressive and dynamic, and sellers have many choices to decide on the place to promote items.”
Amazon mentioned its income from impartial sellers amounted to 60% of the amount of things offered on the location and it had “lengthy celebrated that their gross sales are rising sooner than Amazon’s personal gross sales … We’ve additionally invested billions in new instruments and providers for sellers to assist them succeed.”
European sellers spoken to for the report mentioned they felt impelled to pay the rising prices as the net market has such a excessive market share – as a lot as 70% in Germany, France and Spain in accordance with a report by the European Fee.
A UK retailer advised Somo that sellers are incentivised to maintain spending on promoting providers to maintain the visibility for his or her merchandise: “Like a hamster on a wheel, you must simply hold going. As quickly as you sluggish the tempo, then they’ll simply go your competitor.”
Amazon has refused to reveal information on sellers’ gross sales values on European marketplaces. Nevertheless, the corporate mentioned that impartial and third get together European sellers “offered greater than 2.2bn merchandise worldwide in 2021, which it advised Somo was up 65% over two years. Somo mentioned that income Amazon had obtained from sellers’ listings had elevated by 85% over that two-year interval.
Amazon mentioned the vendor determine included third sellers and impartial companies.