Amazon has begun to notify its vendors or suppliers in the European Union that will stop trading with them and start purchasing the products directly from the manufacturers as a way of cutting costs, as the company has confirmed to the CNBC.
It states that this change will take place as of April 16 and that distributors will be able to continue selling products on Amazon but as external merchants or “sellers”. Amazon offers two selling options: Amazon Seller and Amazon Vendor, we have already talked about their differences before, but in essence the eCommerce giant’s announcement will negatively affect vendorswhich are those suppliers that sell their products to Amazon itself, which is the one in charge of marketing them to the final customer.
That is, while under the figure of Amazon Seller companies sell their products directly to Amazon customers, in the form of Amazon Vendor, it is Amazon itself that buys its products in order to resell them himself to end customers. The platform from which this model operates is Amazon Vendor Central, thus acting as a provider for the marketplace itself.
An email that changes the relationship between Amazon and vendors
This is the email that vendors have been receiving from Amazon:
As part of a purchasing policy implemented at the European level, Amazon has decided to focus on purchasing products directly from brand owners.
Consequently, as established in our terms and conditions for suppliers, we inform you that we will stop acquiring all your products from April 16, 2023.
We are happy to discuss the above with you and if you have any questions you can contact seller support via Vendor Central.
You still have the opportunity to sell these products to customers directly in our store through Amazon Marketplace, as a third-party seller. If you don’t already have a Seller Central account, you can get started by speaking with a team member directly here.
In this way, the eCommerce giant obtains a greater control in their relationships with brands who seek to offer their products on the website and obtain a Greater control over prices and product selection. Amazon’s decision comes shortly after the massive layoffs that have been reported in recent months, not only by the world’s leading eCommerce, but by other large technology companies such as Meta or Twitter.
In any case, Amazon clarified that will continue to work with vendors if they are the direct owners of the brand or if they have an agreement with the manufacturer of the product in which it is established that they are exclusive distributors. This shows that the company’s intention is not to break a relationship with vendors, but to focus on reducing the costs of products for its customers and thus there is a greater number of sales.
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