$10,000 for your soul

Millions of people love Amazon for the instant gratification, the almost universal selection and the typically good pricing the platform offers. Uncountable others, including current and former Amazon merchants or hometown businesses who feel the giant has squashed their formerly prosperous Main Street or online businesses, think Amazon is the devil.

Here at CEDF, I’ve served two clients as a business advisor who rode a roller coaster of excitement and then despair over their relationship and Amazon’s opacity, inequitable policies and kafkaesque behavior. Without dwelling on the technical details of their frustrations, one walked away from literally millions in future purchase orders in order to protect the pricing integrity for its hard-won conventional channel partners. Another fought product diversion abetted by the colossus, and later came to the realization that when selling direct to Amazon, the purchase orders the leviathan was placing were being outpaced by returns from other Amazon warehouses. On a net basis, Amazon owed the client money and it wasn’t paying too fast.

Now these may be exceptional circumstances.  But there is enough written in the business press to make it clear that an Amazon relationship can make or break a business and not everyone is happy.

As an aside, when I’ve made presentations for SCORE about getting one’s business on the internet, few people in the audience realize that two-thirds of the sales on Amazon are from independent sellers.

Many entrepreneurs feel their brand, which they may have sacrificed for and nurtured for years, represents the soul of their company. How much would you sell your soul for? This article explains the little-known Amazon Accelerator program which can boost a merchant’s visibility beyond your wildest dreams, but with a catch.  Amazon can buy your brand on 60-days notice for $10,000.  Would you take that bargain?

— Frederick Welk
CEDF Business Advisor


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