Amazon Pulls the Plug on Thousands of Vendors

Last updated on August 27, 2024

Receive a big check every month for selling your products directly to Amazon wholesale? Get ready to change the way you do business with the e-commerce behemoth. If you own a small business that currently moves less than $10 million in sales volume through Amazon, or Amazon has not paired your company with an assigned vendor manager, the company will now require you to sell your products through its third-party marketplace by default.

Moving smaller vendors to its third-party platform allows Amazon to eliminate costs associated with directly supporting smaller companies that bring in less revenue. Once a business is on the third-party platform, Amazon also has the ability to charge for additional services, such as Fulfilled by Amazon and account management.

Amazon’s first-party business will focus on maintaining relationships with high value brands and companies involved in the production of Amazon’s private-label products.

The change is expected prove difficult for smaller, first-party vendors that lack the existing systems and infrastructure to support competitive third-party marketplace sales and distribution.

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Written By:

Rinaldi Juwono

Rinaldi Juwono leads content and SEO strategy at Cahoot, crafting data-driven insights that help ecommerce brands navigate logistics challenges. He works closely with the product, sales, and operations teams to translate Cahoot’s innovations into actionable strategies merchants can use to grow smarter and leaner.