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Amazon's CEO, Andy Jassy, is facing criticism after he claimed that the company has a strong relationship with its sellers. Many longtime merchants on the online platform disagree. They say that their relationship with Amazon is worse than ever.
Amazon CEO Defends Seller Relationships, Pricing
On Thursday, Amazon's CEO, Andy Jassy, praised the company's connection with independent sellers while announcing that shoppers will see prices drop further. He highlighted that over 60% of the products sold on Amazon come from these third-party sellers, as reported by Fortune.
The Federal Trade Commission, however, has accused Amazon of unfairly dominating these sellers. Despite these allegations, Jassy stated that these independent vendors earn more by selling on Amazon.
"Selling online isn't just about setting up a website-it's about reaching customers, which Amazon helps sellers do," Jassy explained in an interview with CNBC.
Jassy claims that sellers earn significantly more money on Amazon than they could by selling independently. He highlighted the advantages of using Amazon's logistics service, Fulfillment by Amazon (FBA). "With FBA, sellers can store their products in our warehouses, and we handle packing and shipping. Products are also eligible for Prime shipping," Jassy explained.
However, the Federal Trade Commission (FTC) has accused Amazon of charging excessively high fees to sellers, which they claim prevents sellers from lowering their prices. Despite these allegations, Jassy maintains that the fees support businesses and asserts that Amazon holds a "great relationship" with its third-party sellers.
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Amazon CEO Claims Cost Efficiency Amid Criticism
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Amazon's CEO defended the company's fee structure, stating, "It costs money, so we charge a fee for it, but it's much more cost-effective for sellers." He also emphasized the company's improvement efforts, asserting, "We have a great relationship with sellers."
However, longtime sellers have publicly disagreed, expressing their discontent on social media platforms like X (formerly known as Twitter).
One seller expressed his frustration: "I've been selling on Amazon for 9 years, and 2023 and 2024 have seen the most margin pressure and complexity from Amazon." Another seller humorously added, "This statement was so wild I took a swig of water just to spit it out in surprise."
On social media, a seller with 13 years of experience with Amazon remarked, "Amazon's relationship with sellers is the worst it's ever been-you can take that to the bank. No way he can believe this. He's gotta get on Twitter more, lol."
Comments continued to pour in, with another seller stating, "The man Jassy just said, 'We have a great relationship with sellers.' I've never seen bigger gaslighting in my life."
According to Fortune reports, Amazon is set to implement three new fees on sellers soon, including an "inbound placement fee" for sellers who do not distribute their products across four different warehouses.
This fee can be bypassed if sellers opt into an Amazon warehousing service, adding to the growing concerns among merchants about increasing costs and complexities.
Starting in May, Amazon merchants will be subject to a new fee if their warehouse inventory levels are too low. This penalty adds to the existing penalty sellers face if they store excess inventory for prolonged periods.
In June, a third fee will be introduced, penalizing sellers if their products are returned at a rate higher than average. This series of charges underscores the increasing costs and regulations sellers face on the platform.
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