Amazon has been reshaping relationships with some of its long-time Wholesalers as a move to cut on costs. Amazon intends to buy from larger companies as compared to smaller companies.
Thousands of small suppliers on Amazon’s platform selling at less than US$10 million annually stand to lose bulk orders, while big brands the likes of Lego, as well as Procter & Gamble, would benefit.
The move is to help Amazon manage its cash flow better. This cut of Wholesalers by Amazon frees capital for Amazon to be more strategic, allowing for further increases in third-party sales as well as it brings more product offerings to the marketplace without Amazon spending any cash.
Amazon focuses on improving efficiency; therefore, partners who aren’t cost useful, despite the size stand at risk.
Small wholesale suppliers will still be able to sell more items directly to consumers if If Amazon cuts them off.
Possibilities are that the smaller suppliers could shift to eBay, which still has focused on small suppliers.
Small suppliers are urged by Amazon to sign up for Brand Registry within 60 days if they would like to continue accessing automatic purchase order fulfillment.
Brand Registry is a program that provides brand owners with registered trademarks access to various tools to grow their presence on Amazon. Brand Registry also includes the project Zero initiative aimed at fighting counterfeiters.
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