Fees have increased today for some of the third-party sellers responsible for close to two-fifths of all Amazon transactions.
The new charges will see particular groups of UK (the amazon.co.uk site also serves the Irish market) and European sellers pay Amazon significantly more for sales made on the site. In the UK, for example, sellers of electronic accessories will see fees jump by nearly three-quarters as Amazon take 12% fees, up from 7%. The UK site will also see fee hikes for automotive sellers. Other European marketplaces have seen increases elsewhere, with amazon.co.fr raising the fees for sellers of DVDs, videogames and music.
The move raises further uncertainty for both sellers and consumers. The sector has consistently seen increases in market share, particularly in the light of the collapse of many major high street retailers. The prominence of independent sellers affiliated with the largest online retailers or operating through sites such as Ebay has also increased. High-profile competitor Play.com, for example, announced in early 2013 that the site would no longer sell goods directly to customers (influenced by changes in tax exemptions for goods sold from the Channel Islands). The Play site now serves as a platform for a dedicated third-party marketplace.
Amazon – which prides itself in its goal to be the world’s “most customer-centric” company, and currently has offices in Dublin and Cork – is one of the Internet’s largest companies, with worldwide revenue of over $61 billion in 2012. Although it originated as a bookstore – with books remaining one of its major markets, bolstered through its electronic Kindle platform – the company has significantly expanded its scope to encompass dozens of product categories, ranging from pet supplies to online cloud storage space.
Criticism of Amazon
While the retailer has earned consumer loyalty through its low and competitive pricing, it has also drawn criticism for many of its business practices.
Amazon place tight restrictions on Marketplace prices, often forcing retailers to accept low or non-existent profit margins. The policy of low pricing ultimately helps determine the price goods are sold for across the Internet, with suppliers on other platforms unable to compete with low listings on Amazon. One anonymous trader, speaking to The Guardian, writes that "We are not supposed to, but we will have to have higher prices on Amazon. I don't think they can enforce pricing. We have to be able to compete with everybody. It should be up to the seller, it shouldn't be up to Amazon."
While the size and consumer-base of Amazon dictates that most sellers need to have a strong presence on the site – the Wall Street Journal reported that sellers can expect an average sales increase of 50% when they begin selling on Amazon Marketplace – many have cited Ebay and Paypal as seller friendlier companies. Amazon, who also offer a dedicated online payment platform called Amazon Payments, have been said to take weeks to process and release smaller seller’s funds, compared to mere days with Paypal.
Acquisitions and expansions
In other Amazon news, the company last week announced its acquisition of Goodreads, a social book recommendation, discussion and review site. It is the latest in a long line of acquisitions by Amazon, who have previously acquired companies such as Book Depository, IMDB and LoveFilm. While many users of the site have expressed concerns over the future of the previously independent website, media outlets such The Atlantic have called it a logical step for Amazon as the world’s most prominent bookseller. Amazon themselves have suggested there will be few major changes to the platform.
More positively received has been yesterday's news that the company’s AutoRip service has been extended, which will now see purchasers of vinyl records receive a free digital copy of the album.
