As online retail giant Amazon retains its power over global commerce, sellers who use the platform have been alarmed over what they say are unfair, monopolistic practices.
They say the vice grip in which Amazon holds its sellers has led to abuse by rogue employees, hurting small businesses that use the platform to reach customers.
For example, Jack Nekhala, co-founder of the company that sells the Bed Scrunchie sheet-fastening product, said that, in 2024, his company's listing and seller account were removed from the Amazon marketplace without explanation.
Later, a stranger allegedly offered to restore the company's listing — for a price.
Critics say stories such as his reflect the concerning amount of control Amazon holds over independent merchants, with consequences that can impact both small businesses and consumers, often in the form of higher prices.
Here's what to know
Nekhala sold his Bed Scrunchie sheet-fastening product through Amazon for a decade before his account was inexplicably deleted. When an unknown woman contacted him on WeChat and said she could have the account restored if Nekhala paid her, she knew account details "only an Amazon employee would know," as Nekhala told The American Prospect.
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As it turned out, that interaction was part of a larger bribery scheme in which internal Amazon information was sold to middlemen, resulting in convictions and prison sentences for rogue employees.
The situation highlights the potential for abuse inherent in Amazon's market dominance.
Sellers told The Prospect that after Amazon fees, shipping prices, and advertising costs are deducted, about half of every dollar in sales goes to the tech giant, forcing many businesses to raise prices.
Sellers haven't been the only ones taking notice. Amazon is under legal pressure from the Federal Trade Commission and 19 states, which sued the company, accusing it of abusing monopoly power over both sellers and shoppers.
More background
As Amazon increases the costs and burdens on sellers, those higher expenses are often passed along to consumers. A survey of nearly 200 merchants that use the platform found that 60% have increased prices in response to fees and policy changes, according to The Prospect.
Merchants also accuse Amazon of making routine business operations harder. Whereas sellers previously had been paid at the time of purchase, under the new "DD+7" payment system, sellers are paid within seven days after delivery day.
In practice, sellers say they have experienced weeks of delays.
The result has been an enormous disruption to sellers' cash flows, which impacts their ability to pay employees and vendors.
"We can only operate for so long without being paid," one seller wrote on the Amazon Seller Central forum, per The Prospect.
In April, Amazon announced another change that has further squeezed sellers. Rather than being able to pay for Amazon ads with a credit card, as they previously could, many sellers now need to pay for ads directly out of sales revenue, placing even more strain on cash flow.
Critics argue that all of this makes it harder for independent sellers to stay afloat.
What's being done?
After Amazon announced the ad-payment changes, Million Dollar Sellers organized a one-day advertising boycott, and Amazon postponed the rollout.
Along with the FTC lawsuit, California and other states have brought cases against Amazon's marketplace practices, including claims that its policies and pricing tactics prevent better deals elsewhere from gaining traction. The federal trial is scheduled to begin in March.
"They control too much," Nekhala said. "It's scary. It's like a train that's coming head-on, and if we don't see this, if we don't stop this train, it's going to bulldoze everything that it goes through."
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