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Amazon says sellers are great on its marketplace as regulators turn up the heat

Amazon says its marketplace is doing well as regulators clamp down

October 20, 2021: -On Tuesday, Amazon released new data touting sellers’ success on its third-party marketplace amid mounting scrutiny from lawmakers of its private-label business practices.

Amazon launched the third-party marketplace in 2000, which allows everyone from small businesses that operate out of their garage to established brands selling their wares on the site. It has grown to encompass millions of sellers and now accounts for nearly 60% of Amazon’s overall retail sales.

But in the latest months, Lawmakers, antitrust watchdogs, and advocacy groups have voiced growing concerns nearly Amazon’s treatment of third-party sellers and whether the company unfairly favors its products on its marketplace.

On Tuesday, Amazon sought to characterize the roughly 2 million small- and medium-sized businesses that sell on its site as “selling partners,” many of which have benefited from the outsized growth of e-commerce during the coronavirus pandemic.

Third-party sellers in the U.S. netted $200,000 in sales in the 12 months ended August 31, up from $170,000 in the same period last year, Amazon said. U.S. sellers sold more than 3.8 billion products over the period, compared with 3.4 billion in the year prior.

The report, which comes ahead of Amazon’s annual seller conference on Wednesday, also highlights the growth of its third-party seller services and its rising investments in the marketplace.

Half of Amazon’s nearly 500,000 U.S. sellers used Fulfillment by Amazon, a service that packages and ships orders for sellers from the company’s warehouses. Sellers selling FBA saw a 20% to 25% increase in their sales on average, Amazon said.

Five members of the House Judiciary Committee sent a letter Sunday to Amazon CEO Andy Jassy urging him to respond to allegations that top executives, including founder and Executive Chairman Jeff Bezos, misled or lied to Congress about its private-label business practices.

Amazon has denied that the company and its executives misled the committee, saying it has internal policies that prohibit employees from using single sellers’ data to develop its products.

Dharmesh Mehta, Amazon’s vice president of customer trust and partner support, told CNBC that media reports detailing the company’s use of seller data are inaccurate.

“Now and then, you see speculation around short-term, profit-driven actions, and Amazon would not do that,” Mehta said. “It just doesn’t make sense because we’re in this for the long haul with our selling partners.”

In addition to goods from third-party sellers, Amazon also sells its products under the AmazonBasics moniker, along with other brand names. Sellers have complained that Amazon unfairly competes with third-party businesses on its platform, with some alleging Amazon directly knocked off their goods.

They’ve contended that Amazon hampers third-party sellers’ businesses through an increasingly automated account suspension and appeals process, lengthy and financially crippling.

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