Some 2 million merchants are responsible for more than half of the goods sold by Amazon. But for years, these sellers have lived with the fear of being brutally suspended, sometimes after being falsely accused by a buyer or competitor of selling counterfeit products. Many appealed their suspensions but found themselves moved from one Amazon team to another with no resolution. Meanwhile, their online stores have been shut down, with unsold merchandise piling up.
In 2020, Bloomberg reported on the experience of a Los Angeles clothing retailer who was kicked off the site for allegedly selling counterfeits, which it denied. Amazon declined his appeal and destroyed what it said was $1.5 million worth of inventory. Such stories were at the heart of a House Judiciary Committee report finding that big tech companies were abusing their power over smaller partners.
Amazon merchants have limited recourse as they waive their right to a day in court by agreeing to resolve disputes through binding arbitration, a costly and time-consuming process. Thus, a whole cottage industry has sprung up to help sellers reintegrate. There was even an effort to sell insurance to replace lost earnings after a suspension. But some merchants simply give up and abandon their Amazon accounts.
Dharmesh Mehta, vice president of partner sales services at Amazon, said seller suspensions are rare but their fear can weigh on merchants who would otherwise have to focus on shoppers, especially during the holiday season. charged.
“It can create a level of anxiety or fear,” he said. “So it’s really about how do you create greater peace of mind.”
Amazon remains the dominant online marketplace in the United States, but faces increased competition from established retailers such as Walmart Inc. and new companies like Shopify Inc. The Seattle-based company is also struggling with a slowdown sales as consumers return to their pre-pandemic shopping habits and rein in spending amid the highest inflation in four decades. Seeking to cut costs, the company plans to cut around 10,000 corporate jobs, according to people familiar with the situation, and has slowed the opening of warehouses.
More stories like this are available at bloomberg.com