‘It’s PR’: Sellers react to Amazon’s newfound focus on small businesses
This article was updated to include additional clarification from Amazon. Please see below.
Amazon is giving sellers mixed messages.
Over the last year, the company has made sweeping changes that have impacted third-party vendors’ businesses. This includes rule changes that caused thousands of listings to be suspended, as well as increased competition from its own private labels.
Now, the company has been making a PR push to focus on what it considers to be small businesses that rely on the e-commerce platform. Over the course of a few days, the company launched a series of events aimed squarely at small businesses. It includes a new suite of awards to highlight select merchants, as well as local programming in smaller cities.
“It’s PR,” said one Amazon seller to Modern Retail, who wished to remain anonymous.
Amazon has long touted its small business initiatives. Every year it publishes a report about the makeup of its small-to-medium-sized businesses, as well as boasts at how much capital it gave to these entrepreneurial upstarts. According to its most recent statistics, SMBs make up approximately 58% of Amazon’s sales. (The company says SMBs are fewer than 100 employees and annual revenue of under $50 million.)
This is all part of the delicate tightrope Amazon walks with its third party merchants. The company increasingly makes moves to show that it wants complete domination of the e-commerce market. But it relies on these smaller businesses and risks alienating them. The company has made changes to rules that has caused thousands of listings to be suspended. Following backlash, Amazon tried to clarify its rules for its merchants, but is continually criticized for being opaque.
Now, the company seems to be trying to shift the conversation to all of the good that it does. It especially wants to remind the public that it helps fledgling entrepreneurs. Last week, Amazon unveiled a new award for small businesses. According to the company’s press release, it intends to “celebrate inspiring and unique American small businesses selling in Amazon’s stores.
Three awards are being given out: “Small Business of the Year,” “Woman-Owned Small Business of the Year” and “Small Business Owner Under 30 of the Year.” Winners will receive “a prize package of account management, advertising credit and promotional support on Amazon.com.”
A few days after that, Amazon sent an invitation to select merchants in Nashville to attend a new event. “You are invited to apply to showcase your brand on October 15th for the first-every Amazon Small Business Spotlight,” said the message to the vendor, which was viewed by Modern Retail. Those chosen can set up a booth at the Tuesday evening event, which will be live-streamed via Amazon Live.
This latest small business push looks similar to past efforts; some see it clearly has pandering. As Kiri Masters, founder and CEO of Bobsled Marketing, pointed out, “it is interesting the timing of this initiative, what with the search algorithm meddling.” She was referring to a recent Wall Street Journal article that alleged that the company altered its product search algorithm to make its own private labeled products more prominent. If true, this would directly impact third-party sellers — especially smaller ones — who rely on organic search results to acquire customers. That news, Masters went on, “was disappointing to hear, for SMBs.” Although she added that “some vendors weren’t surprised.”
The Nashville event too has some sellers scratching their heads “They’re trying to pitch it as a market where you’re going to sell your stuff, generate awareness, bring in shoppers, on a Tuesday night in downtown,” said one Tennessee vendor. “This just doesn’t make sense… it’s going to generate basically zero awareness.” The seller added that this could also be part a local PR push for Amazon as it looks to Nashville as a potential home for its new HQ2.
Reached for comment, an Amazon spokesperson provided the following statement: “Amazon has long been a champion of small businesses. Since opening our virtual shelves up to small and medium-sized selling partners nearly two decades ago, we’ve invested tens of billions in infrastructure, tools, services, and people to help them grow and succeed. Last year, we introduced Amazon Storefronts which features more than one million products from nearly 20,000 U.S.-based small and medium-sized businesses and we continue to launch new tools and services to help these businesses thrive. In 2019 alone, we have rolled out 150 new tools and services and are on track to invest $15 billion in the success of our small and medium-sized selling partners.”
According to the merchant, all of these moves should be taken with a grain of salt. They follow a pattern. “Amazon is notorious for pulling stuff like this and then dropping it,” they said, pointing to their experience with initiatives like Amazon Handmade, which still exists and is “growing,” but the seller hasn’t heard much about
While this person is grateful for Amazon — and has grown a healthy business thanks to the platform — all of the programs tailored for small businesses read hollow. “None of it makes sense for small businesses,” the merchant concluded.
This article first mistakenly said accounts had been temporarily suspended, when it was thousands of listings that were. Amazon also reached out after publication with an explanation of how it defines small businesses. A clarification was added that Handmade still exists. Modern Retail regrets the error.