Amazon denies Bloomberg report about the mom-and-pop supplier purge

Bloomberg reported that Amazon is cutting its small suppliers to save money and focus on bigger brands like Sony and Walmart. The e-commerce giant denies the claims.


May 29, 2019

Amazon’s 3rd-party marketplace has definitely earned its keep. Last year, vendors generated more than half of its e-commerce sales and grew 2x the revenue from the online store. But, to Amazon, it still may not be worth it.

Yesterday, citing anonymous sources, Bloomberg reported that Amazon is about to stop taking wholesale orders from small vendors in an effort to focus more heavily on major brands like Procter & Gamble and Walmart.

But the horse’s mouth says… ‘WRONG’

According to an Amazon spokesperson, the company told Bloomberg that their story and sources were wrong before the article’s publication. 

“We review selling partner relationships on an individual basis, and any speculation of a large-scale reduction of vendors is incorrect.”

Though it would save Amazon money

Eliminating 3rd-party suppliers would allow Amazon to cut back on paying managers to oversee supplier negotiations, as well as reduce the amount of unsold merchandise it gets stuck with.

Merchants have long expected to sell much of their stock in bulk to Amazon. If Bloomberg’s report is true, they will have to win sales one shopper at a time.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.