Amazon is shifting its smaller vendors to its third-party marketplace in an effort to better control their purchase order process and organization.
What Is Amazon’s Small Sellers Shift?
Amazon is planning a huge reduction of vendors on its first-party marketplace. This shift will help Amazon focus on larger, more profitable vendors, those who make at least $10 million on Amazon annually, and “cut costs of operating its wholesale business,” DigiDay reported.
The Amazon third-party marketplace will require smaller vendors to operate their own businesses and pay for additional insights, like deeper analytics or Prime shipping.
Why Is Amazon Moving Small Vendors To A Third-Party Marketplace?
The use of a third-party marketplace for smaller vendors will lower operational costs for Amazon, allowing Amazon to reallocate resources to larger, more revenue-drawing brands.
An Amazon spokesperson wrote, “We review our selling partner relationships on an individual basis as part of our normal course of business and any speculation of a large-scale reduction of vendors is incorrect. Like any business, we make changes when we see an opportunity to provide customers with improved selection, value and convenience, and we do this thoughtfully and considerately on a case-by-case basis.”
How Will Amazon’s Small Sellers Shift Affect Digital Marketers?
Digital marketers who work for large vendors likely won’t see any changes.
Marketers who work for smaller vendors will likely need to acclimate themselves to Amazon’s third-party marketplace, which may require more manual work, like a direct-selling strategy and a larger budget for deeper analytics. DigiDay noted small vendors may see some lost sales while migrating to the third-party marketplace because of these additional needs.
Amazon consumers most likely won’t see a difference in their shopping experiences.