As indie businesses prepare for Small Business Saturday, November 24, an unlikely source is touting how it’s a boon to small businesses. On Monday, Amazon sent an e-mail to small businesses, including independent bookstores, advertising how the mega-retailer helps them “thrive.”
The e-mail, whose subject line reads “Success beyond Small Business Saturday,” boasts: “We believe in helping businesses like yours pursue a passion and thrive. With Small Business Saturday, and the holiday season, right around the corner, there’s no better time than now to realize the various ways Amazon helps empower small businesses to make a big impact.” Small Business Saturday, which will take place this upcoming Saturday, is small businesses’ response to Black Friday and Cyber Monday.
“Amazon’s brazenness clearly knows no bounds,” said ABA CEO Oren Teicher. “As studies have shown, Amazon is no friend to small businesses — quite the opposite is true. Studies show that Amazon’s demand for millions in tax subsidies when opening warehouses, offices, or, more recently, HQ2, and its refusal to collect and remit sales taxes for third-party marketplace sales has done irreparable harm to small businesses across the country. Amazon’s claim that it helps small business is not only insulting to hard-working owners of small retailers across the country, the data clearly show that it is simply not true.”
A study conducted by Civic Economics, Prime Numbers: Amazon and American Communities, demonstrates the negative impact Amazon’s dominance has had on small businesses. Civic Economics estimates that the $133 billion of retail goods sold on Amazon in 2016 constitutes 44,000 displaced shops and 637,000 displaced retail jobs.
The Amazon e-mail includes a link to the company’s Small Business Impact Report, which cites the 20,000 small- and medium-sized businesses selling on Amazon Marketplace, its marketplace for third-party sellers. However, these numbers fail to tell the full story. In fact, Amazon Marketplace is a crucial tool that Amazon exploits as an anticompetitive advantage over small businesses.
A recent Harvard Business School study shows that Amazon tracks the transactions of marketplace sellers and is thus able to determine which products are the most popular and profitable. Using this data, Amazon then starts selling this same product directly to consumers. In this manner, it exploits data on small businesses that it collects as a marketplace platform to unfairly compete against these same businesses as a retailer.
In addition, the Harvard Business School researchers observed many instances in which Amazon, after introducing a “copycat” product, presented itself as the default seller even when the same product was offered at a lower cost with a comparable shipping speed by third-party sellers. Finally, the sellers now competing against Amazon’s copycat products must pay Amazon commission (around 15 percent) on their sales.
Last year, millions of shoppers, food lovers, public officials, and other supporters pledged their support on Small Business Saturday. Check with your local businesses and community organizations to see what they have planned for November 24. Booksellers are welcome to join the movement on social media by using the hashtags #ShopSmall and #SmallBizSat.