In December 2020, the Bundesverband Onlinehandel e.V. (Federal Association of eCommerce) surveyed commercial merchants on their relationship and cooperation with Amazon. More than 1,600 people took part in the extremely comprehensive survey. Thus, providing an unprecedented insight into practices between Amazon and merchants.
The report includes findings from over twenty topics and service areas in commercial selling on Amazon. There are figures on the cooperation with Amazon. As well as the use of various services such as Buy Box, FBA (Fulfilment by Amazon), Prime by Seller (SFP), Amazon Pay and merchant support. Measures such as warnings, article deletions, plan-of-action (POA), money withholding and account suspensions are also analysed extensively.
Merchants are extremely dissatisfied with Amazon’s support
Across all topics, it emerges that merchants are extremely dissatisfied with Amazon’s support. 78% of the merchants see a difficult to no partnership. A maximum of 5% of the merchants receive satisfactory support from merchant support. At the same time, the merchants state that they generate an average of 51.2% of the company’s turnover through Amazon. This clearly shows the merchants’ dependence on business on Amazon. For merchants who have been selling on Amazon for more than 5 years, this dependence rises to 55%.
The difficulty of selling successfully on Amazon
In order to get the so-called Buy Box, merchants state that the sales price must be 22.3% cheaper than the comparable offer from the Amazon merchant. In addition, 44% of merchants say they are prevented from selling a branded product. 78% of merchants saying Amazon puts this restriction on sales. Furthermore, 80% of merchants have already had experience with items deletions on Amazon. Almost always, when it comes to accusations of selling testers, samples, used items instead of new or even fake product, this accusation was unjustified.
From the point of view of the BVOH, Amazon’s handling of so-called price errors is a very problematic procedure. More than two thirds of the merchants state that Amazon uses unknown algorithms to set the sales price. With so-called low-price or high-price errors, Amazon pressures the merchant to quote a certain price for the offer. President Oliver Prothmann says: “Amazon interferes with the freedom of the merchant to set prices in violation of antitrust law. Without knowledge of, for example, purchasing conditions, cost structure and availability, which determine the merchant’s sales price, Amazon believes it can dictate what the sales price should be. This further encroachment by Amazon on the freedom of retailers must stop.”
The biggest threat is account suspension
The biggest threat to a merchant is an account suspension. Nearly a quarter of merchants say their account has been suspended by Amazon in the last twelve months. Over two-thirds of merchants only found out on the day of the suspension and were not warned by Amazon in advance.