Amazon's cut of each small merchant's sale is over 50% — Report
Grappling with slowing sales growth and rising costs, Amazon.com Inc. is squeezing more money from the nearly 2 million small businesses that sell products on its sprawling online marketplace.by Marketplace Pulse, which sampled seller transactions going back to 2016.
That abruptly changed when pandemic lockdowns eased and people began travelling and dining out again, sucking the oxygen out of online shopping.Consumers are far more deal-conscious than they were during the pandemic, so Amazon merchants are loath to raise prices. Amazon sellers choose to use its logistics services because, on average, they cost 30% less than alternatives from other shipping companies, and merchants are free to buy advertising anywhere, company spokesperson Mira Dix said in an emailed statement.“Many selling partners have built and run their businesses without advertising,” she said.Sellers are not required to use our logistics or advertising services, and only use them if they provide incremental value to their business.
One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. The higher fees have compelled Gregorich to do more logistics himself. Other carriers can deliver fire pits for $28, he said, or about half what he pays Amazon to deliver bulky items.
One sells snack-sized bags of popcorn. A 24-pack helps them offer bulk discounts but Amazon has been ratcheting up fees owing to the package’s large size.
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