Amazon trumpets its small business benefits

Amazon Trumpets its Small Business Benefits

Amazon has just released a report showing how it supports small businesses across the world, especially in the US – and the timing of this publication is unlikely to be by accident.

In its Small Business Impact Report, Amazon said:

More than one million US-based small and medium-sized businesses (SMBs) are selling on the Amazon Marketplace
SMBs selling on Amazon come from all 50 US states and more than 130 countries
More than 20,000 SMBs worldwide exceeded $1 million in sales in 2017
SMBs selling on Amazon are estimated to have created more than 900,000 jobs worldwide
In 2017, it lent more than $1 billion to US-based SMBs via the Amazon Lending Program
In 2017, it invested billions of dollars in infrastructure and technical services that help SMBs reach customers around the world
Half of all items purchased on Amazon come from SMBs
Amazon has also developed a new area on its website where SMB entrepreneurs share their Amazon success stories and where SMBs can get advice and tips on how to sell on the Amazon platform.

In the context of B2B, the e-commerce giant’s report comes as the US General Services Administration (GSA) weighs up options for its federal online marketplace solution as outlined in Section 846 of the 2018 National Defense Authorization Act. An important aspect of Amazon’s lobbying strategy will no doubt be how it is a friend to US small businesses rather than a competitor and that using the Amazon Marketplace for federal government purchases will be beneficial to SMBs.

Indeed, that was part of Amazon’s message back in January when the GSA asked for stakeholder input into the proposed federal e-commerce portal. Amazon identified four areas for the GSA to consider: “using commercial terms and conditions and commercial practices; enabling robust competition; enhancing opportunities for small and disadvantaged businesses; and encouraging the availability of tools to simplify compliance”. All these things are currently available from Amazon Business, it said.

“Section 846 provides a unique opportunity to enable federal buyers and taxpayers to benefit from the innovation that a marketplace like Amazon Business can provide,” concluded Amazon in its letter to the GSA.

As US business products associations NOPA and OFDA prepare for their small business advocacy fly-in to Washington later this month, they will be mindful of Amazon’s efforts to portray itself as a platform that underpins small business growth and job creation.

They will no doubt looking to counteract Amazon’s claims by using research carried out by the Institute for Local Self Reliance (ILSR), whose co-Director Stacy Mitchell issued a response to the Amazon Small Business Impact Report.

“Amazon is increasingly framing itself as a boon for entrepreneurs, but in fact the company’s increasing dominance of the consumer goods market is having a profoundly negative impact on the nation’s small and mid-sized businesses,” said Mitchell.

“This impact is twofold. First, tens of thousands of small businesses have closed their doors in recent years and many cite Amazon’s growing market dominance as a primary factor in their decline. And second, as Amazon has become a gatekeeper to online shoppers (more than half of online shopping searches start on Amazon’s platform), an increasing number of small and mid-sized businesses have been compelled to join Amazon’s Marketplace in order to reach consumers.”

She continued: “As Amazon’s own release today makes clear, many small businesses now must depend on an aggressive competitor for the infrastructure they need to get to market. In the absence of meaningful competition in online retail platforms or federal regulation of Amazon’s platform as a common carrier, this dependence means that Amazon controls the fates of these small businesses.”

While it is likely that Amazon Business will be selected as a portal for the GSA’s federal e-commerce procurement initiative, NOPA and other small business stakeholders will be pushing hard to ensure that alternative avenues for SMBs are also taken onboard by the government.

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