Amazon's Problematic Reign: Price Hikes, Seller Struggles, and Data Concerns

3. Amazon increases prices to sellers without losing meaningful business

249. Amazon's monopoly power also allows it to charge higher prices and provide lower quality services to sellers. As explained in Part IV, above, Amazon charges sellers selling fees, referral fees, fulfillment fees, and advertising fees. The total price Amazon charges a seller has skyrocketed without a correspondingly large loss of business.

250. Before Amazon decided to prioritize advertisements as a way to generate revenue, sellers were able to access prominent and valuable search page placement by paying just Amazon's referral and sales fees. Now, advertised products on Amazon are 46 times more likely to be clicked on when compared with products that are not advertised. Advertisements are now no longer a discretionary purchase but instead a necessary cost of doing business. Therefore, sellers must not only pay Amazon's referral fee but must also now pay for advertising in order to reach shoppers.

251. Amazon has also hiked average fulfillment fees to sellers, which jumped approximately 30% between 2020 and 2022. Amazon has made these fees, too, a prerequisite to being a successful seller on Amazon. As described in Part VI.B below, Amazon effectively forces sellers to purchase its fulfillment services to access the full reach of Amazon's marketplace services that Prime eligibility unlocks.

252. By effectively requiring sellers to pay for search placements through advertising and for Prime's shipping costs through FBA, Amazon has dramatically increased the percentage cut it takes out of seller revenues, also known as Amazon's "take rate." Amazon's average take rate for seller who use FBA (redacted)% in 2014 to (redacted)% in 2022 for essentially the same services. Amazon now takes nearly one out of every two dollars of sales from sellers who use its fulfillment services, many whom are small business with already thin margins. By comparison, (redacted) The fact that such low-margin sellers remain on Amazon takes an ever-greater cut of their revenues shows Amazon’s monopoly power.

253. Sellers note that because they depend on Amazon, they effectively have no choice but to submit to Amazon's growing demands. As a third-party seller put it (redacted) According to a public article, another seller stated that "[ t]or some products, we realized that we need to pay for ads but we'll never profit at our current prices." As a result, that seller had to raise prices to pay for advertising on Amazon.

254. Amazon also recognizes that sellers believe "that it has become more difficult over time to be profitable on Amazon." (redacted) One of the only ways left for sellers to eke out a profit is to raise the prices paid by shoppers. A seller succinctly explained this dynamic:

(REDACTED)

255. Amazon has hiked its fees even as it has failed to adequately protect sellers' commercially sensitive data, exposing this data to theft and appropriation. Internally, Amazon recognized (redacted) Employees also recognized that (redacted) and that (redacted)

256. (Redacted) Indeed, seller forums on Amazon are rife with complaints about issues ranging from abrupt and arbitrary account suspensions to sellers having their unexpectedly seized with no recourse. One seller explained that they could not leave Amazon because “[w]e have nowhere else to go and Amazon knows it.” According to an internal Amazon study, Amazon’s sellers live “in constant fear” of Amazon arbitrarily interfering with their ability to sell on Amazon, which “put[s] their businesses and livelihoods at risk.“ amazon ability to profitably hike fees while maintaining its iron grip over sellers is further evidence of its monopoly power.