The Amazon Purge: What does it mean for retailers and distributors?

Reports and rumours are circulating that Amazon is preparing to purge small suppliers from its system, focussing it's buying on large brands and conglomerates.

How does the Amazon purge affect shoppers?

This doesn't mean the products are about to disappear but it does mean that these suppliers will no longer be selling to Amazon - they will instead be moved to Amazon's Marketplace.

How are sellers affected by the Amazon purge?

In the Amazon Marketplace model, there is far more burden on the seller to drive traffic to their products and fight it out with every other marketplace seller for trade. Historically, having the "sold by Amazon" badge against a product was a boost for sales - a boost many small suppliers may be about to lose.

Amazon Marketplace transactions account for more than half of Amazon's eCommerce business and with a trade war looming (or in full swing, depending on your view) it's sensible for Amazon to look at the costs of holding stock, managing suppliers and channels, and if they can offset this cost back to the supplier... they're likely to do so. According to this article, Amazon have already drawn a line in the sand on how much more they will pay for products hit by tariffs.

These rumours have sent shockwaves through the ecosystem of small manufacturers and distributors who have relied on Amazon for their eCommerce strategy and is a stark reminder that when you sell through someone else's platform, you never own the customer.

What should do about the Amazon purge?

If you are working extensively with Amazon, now is the time to serious consider implementing or updating your direct to consumer eCommerce offering to reduce the impact of losing trade with Amazon and implementing marketing strategies to draw customers away from third party platforms and into your own business ecosystem.

Need our help? You're just one click away from the next stage of your journey...