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Amazon hits back at Bloomberg report about small suppliers purge

Amazon hits back at Bloomberg report about small suppliers purge
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This story has been updated. 

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A purge is on the horizon.

Amazon is reportedly about to stop taking wholesale orders from small vendors in an effort to focus more heavily on bigger suppliers and force the little guys to rely on the company’s third-party selling platform, according to Bloomberg. If true, this will be a huge shift for thousands of small businesses that rely on Amazon to buy a big portion of their stock. Amazon, however, denies Bloomberg‘s report outright.

Citing anonymous sources, Bloomberg reports that the move is part of Amazon’s attempt to maintain its competitive advantage against companies like Walmart and Target. Essentially, Amazon purchases wholesale inventory for its warehouses, which it then sells directly to Amazon customers. A mix of large and small suppliers have historically made up this stock. Now “vendors selling less than $10 million in products each year on the site will no longer get wholesale orders from Amazon,” Bloomberg writes.

Amazon bluntly claims that the reporting is wrong. In a statement to Fast Company, a spokesperson says:

We informed Bloomberg prior to publication of their article that their story and sources are wrong. We review our selling partner relationships on an individual basis as part of our normal course of business, and any speculation of a large scale reduction of vendors is incorrect. Like any business, we make changes when we see an opportunity to provide customers with improved selection, value, and convenience, and we do this thoughtfully and considerately on a case-by-case basis.

If true, the purge will likely have a negative impact on the affected vendors. Amazon’s move will force them to sell their inventory directly to customers, meaning their businesses will have a new element of volatility. If Amazon stops buying large amounts of products, these vendors will have to maintain an active presence on Amazon’s platform and work to be rated highly and prominently featured to move stock. This purge will essentially force many online sellers to upend their dominant business strategy.

The change will reportedly happen over the next few months. Once it’s implemented, we’ll get a sense of how big the impact is on the small businesses that rely on Amazon.

You can read the full post here.

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