Reported today on The Seattle Times For the full article visit:
Prime power: How Amazon squeezes the businesses behind its store
SEATTLE - For tens of millions of Americans, it is so routine that they don't think twice.
They want something - a whisk, diapers, that dog toy - and they turn to Amazon. They type the product's name into Amazon's website or app, scan the first few options and click buy. In a day or two, the purchase appears on their doorstep.
Amazon has transformed the small miracle of each delivery into an expectation of modern life. No car, no shopping list - no planning - required.
But to make it all work, Amazon runs a machine that squeezes ever more money out of the hundreds of thousands of companies, from tiny startups to giant brands, that put the everything into Amazon's Everything Store.
In more than 60 interviews, current and former Amazon employees, sellers, suppliers and consultants detailed how Amazon dictates the rules for those businesses, sometimes changing those rules with little warning. Many spoke on the condition of anonymity, for fear of retaliation by Amazon.
Amazon punishes the businesses if their items are available for even a penny less elsewhere. It pushes them to use the company's warehouses. And it compels them to buy ads on the site to make sure people see their products.
All of that leaves the suppliers more dependent on Amazon, by far the nation's top online retailer, and scrambling to deal with its whims. For many, Amazon eats into their profits, making it harder to develop new products. Some worry if they can even survive.
"Every year it's been a ratchet tighter," said Bernie Thompson, a top seller of computer accessories who Amazon has highlighted in its marketing to other merchants. "Now you are one event away from not functioning."
Bernie Thompson, founder of Pl
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