Amazon.com has a pretty good business going with third party sellers. According to Reuters, goods sold by other vendors now account for roughly 40 percent of total unit sales on the site and Amazon takes a cut on each one. While the deal between the parties has benefits for all involved, there appears to be some resentment by retailers over rate hikes put through by Amazon in recent years.
"If they increase fees too much, some sellers will decide to not sell there anymore," Niraj Shah, CEO of furniture retailer Wayfair, told Reuters.
Mr. Shah's business, which operates its own website as well as selling on Amazon's, eBay's and Walmart's marketplaces, thinks merchants now have other options and can do quite well without Amazon.
Apparently, not all Amazon merchants share Mr. Shah's sentiments nor come to the same conclusion regarding the Reuters report. One post in the Amazon Seller Forum by Lake concluded that there was abuse of the system by third-party sellers, particularly in electronic accessories, and that Amazon was simply doing what was needed to be profitable. Lake wrote, "When your strategy for running a business is dependent on your landlord acting against his own interests, you always discover you fail."
Another merchant indentified as Intranet Works called the article a "tempest in a teapot. ... Many Amazon sellers already sell in other venues. There's no Hobson's Choice except in the writer's imagination; business-like sellers sell where they sell because that's where they choose to sell."
How likely is Amazon to see a significant exodus of merchants from its marketplace to competitive sites in the next five to 10 years?