A whistleblower inside Amazon claims execs use data from private sellers on the platform to inform their choices of what markets to enter with their own-label products.
I’ve felt this was an “open secret” for years… Amazon have an uncanny ability to pick winners when it comes to their own-label products, and it’s one of the risks I’ve warned people about when building business on a platform they don’t own.
Lynch’s Law of Platforms
No matter the platform, know that if the platform can make more money selling your product, or an equivalent, than letting you sell your product… expect the platform to do so eventually.
But a suspicion is one thing, knowing that this is practice at Amazon is something else entirely and would be a damaging admission for the eCommerce giant.
Amazon, meanwhile, say that they don’t use private seller data in this way and have strict policies against it, but there are still unanswered questions and an investigation is ongoing.
The most recent twist in this story is that Amazon have politely declined to put Jeff Bezos in front of the committee tasked with investigating this issue.
Trust in Amazon is running low, just as the Covid-19 lockdown has made Amazon’s delivery infrastructure tantamount to a public service. The power Amazon now have is collosal, how they wield it should be of concern to everyone, not just those of us who do their business online.
For those of us who do sell online; whether or not Amazon are using seller data against sellers is immaterial – the fact that an Amazon customer is an Amazon customer, never your customer is something that anyone selling through Amazon should be worried about.