Amazon Denies Report its Cutting Thousands of Suppliers

Published: May 30, 2019, 4 p.m.

b'

Amazon has found itself at odds with the news outlet Bloomberg over a recent report that the wholesaling giant could be making some big changes. But if the report is to be taken at face value, then it\\u2019s not Amazon that\\u2019s the true victim \\u2013 its small and medium sized manufacturers.

That\\u2019s because Bloomberg is contending that Amazon is on the verge of a massive supplier purge. According to the report, the company is looking to streamline costs by halting bulk orders from thousands of its smaller suppliers in order to focus wholesale purchasing on major brands.

And while this doesn\\u2019t mean the moms and pops lose access to the Amazon customer base, it does mean that they\\u2019d need to transition from selling large quantities to Amazon itself, to selling items one by one to Amazon\\u2019s living, breathing customers on the company\\u2019s marketplace.\\xa0

This accomplishes a few things for Amazon, according to Bloomberg. Not only does it allow for Amazon to relinquish the management of the sales process to the supplier, but it also falls in lockstep with a strategy that many businesses have been exploring as a cost cutting method \\u2013 passing the inventory, and its related costs, to someone else along the supply chain.

Sources quoted anonymously said that those companies selling under $10 million in goods on Amazon annually would be the ones chopped from the wholesale buys \\u2013 which isn\\u2019t exactly chump change for most businesses.

When confronted with the report, Amazon responded firmly, basically calling out Bloomberg for running what it says is a false story. In a statement to Fast Company, Amazon said it told Bloomberg before the story ran that the sources were wrong, and that it evaluates suppliers on an individual basis, meaning large scale reductions are not part of its business plan\\u2026 a plan which it characterizes as thoughtful and considerate.

For its part, Bloomberg has acknowledged Amazon\\u2019s firm denial of the story, but appears to believe in the quality of its sources, as no corrections have been made. And whether or not you believe Bloomberg or Amazon, the story includes a bit of sage advice for Amazon\\u2019s existing small suppliers: prepare if you can. It can take up to 120 days to shift from an Amazon wholesale supplier to a marketplace seller, according to Anderson Salgado, CEO of Trisbell, a consulting firm that helps people sell products on Amazon. He adds that \\u201csmaller Amazon vendors should prepare now by learning how to sell on Amazon\\u2019s marketplace to make the transition more smoothly.\\u201d

Download and listen to the audio version below and click here to subscribe to the Today in Manufacturing podcast.

'