Arab Press

بالشعب و للشعب
Friday, Jun 20, 2025

Amazon Marketplace is squeezing sellers for profit, says report

Amazon Marketplace is squeezing sellers for profit, says report

A new report accuses the online retail giant of operating an "unregulated, monopoly tollbooth" as the fees it takes from independent sellers have risen.

You might have noticed that when you shop on Amazon, you're not always buying from Amazon.

In fact, recent figures suggest 56 per cent of items sold on Amazon's websites worldwide come from independent sellers who advertise their goods on the site via an e-commerce platform called Marketplace.

Now a new report by American research organisation the Institute for Local Self-Reliance (ILSR) claims that those independent sellers are paying an ever-steeper price to access Amazon's platform.

The report also claims that Amazon's dominance of the online retail market - particularly in the United States - leaves businesses with little option but to pay up.

Amazon rejected the report's findings, calling them "misleading".

What did the report find?


The key finding of the "Amazon's Toll Road" report was that the company's income from seller fees has risen sharply in recent years.

In 2014, Amazon's average cut of independent sellers' sales was 19 per cent. By 2018, that figure had risen to 30 per cent, and now stands at 34 per cent, the ILSR said.

As Amazon's average seller fee grew, the retail giant's income revenue from those fees more than doubled in just two years, from $60 billion (€53 billion) in 2019 to an estimated $121 billion (€107 billion) in 2021, according to the report.

"Amazon’s marketplace alone is now producing a bigger stream of revenue than the annual sales of most large corporations, including Bank of America, Facebook, and Procter & Gamble," the report said.

"There’s a common assumption that Amazon Web Services (AWS) is Amazon’s main profit source. As the report shows, Marketplace is almost certainly a much bigger source of profit than AWS," ILSR co-director and report author Stacy Mitchell told Euronews Next.

Amazon encourages sellers to use its own delivery services for their goods, the report said, and charges for storage at its warehouses


"We estimate that Marketplace generated $24 billion (€21 billion) in profit for Amazon in 2020, compared to $13.5 billion (€11.9 billion) for AWS," she added.

The scale of that profit is not well understood as Amazon's financial reports combine it with results from other divisions including the retailer's Amazon Prime subscription service that offers free shipping and video streaming to customers, the ILSR said.

"This allows Amazon to offset its huge profits from Marketplace with sizeable losses incurred on Prime and its own retail division," Mitchell said.

In response, an Amazon spokesperson told Euronews Next that the ILSR's findings were "intentionally misleading" because their figures "[conflate] Amazon’s selling fees with the cost of optional services like logistics and advertising".

"Amazon’s selling fees range from 8-17 per cent of the selling price for most products and have remained largely unchanged in the US," they added.

Fulfilled by Amazon


While Amazon's cut of sales - known as referral fees - has remained stable, the number of sellers paying for advertising on the platform and those shipping their goods via the company's 'Fulfilled By Amazon' (FBA) logistics service have risen, Mitchell said.

"Sellers used to be able to rely on good customer ratings to land their products on the crucial first page of search results. But today they must pay for ads to get their products in front of customers. On average, sellers are now spending four times as much of their sales revenue buying ads on Amazon as they were spending in 2016," she told Euronews Next.

"Amazon also presents FBA as optional. But again, it’s effectively mandatory. If you don’t buy FBA, Amazon’s algorithms demote your products and you give up most or all of your sales," she added.

"Sellers are not required to use our logistics or advertising services, and only use them if they provide incremental value to their businesses," an Amazon spokesperson said.

Today, 84 per cent of Amazon Marketplace's top sellers use FBA, the ILSR report said. Crucially, it also makes them more likely to earn a prominent placement in the company's product listings, the report claimed.

Prime suspect


Shipping goods via FBA also makes them eligible for Amazon Prime's free delivery service, opening up a market of over 200 million Prime subscribers worldwide, according to a 2020 letter to Amazon shareholders from company founder Jeff Bezos.

The company's profits from seller fees mask the losses it makes from its rapid-delivery Prime subscription service, the ILSR said


While the majority of those users are in the US, figures from polling firm Kantar show how dominant Prime is in Amazon's largest European markets. Over half of British households and 46.4 per cent of German households have an Amazon Prime membership, the company said.

With a potential market that large, it's hard for independent retailers to take their sales elsewhere, Mitchell told Euronews Next.

"Once someone joins Prime, they tend to make Amazon the first and often only shopping site they visit. Amazon then exploits its power as a gatekeeper to impose steep fees on sellers," Mitchell said.

"In other words, losses on Prime are how Amazon monopolises the market".

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Syria to Reconnect to Global Economy After 14 Years of Isolation
Saudi Arabia Faces Uncertainty Over Succession After Mohammed bin Salman
Israel Confirms Arming Gaza Clan to Counter Hamas Influence
Majority of French Voters View Macron's Presidency as a Failure
U.S. Reduces Military Presence in Syria
Trump Demands Iran End All Uranium Enrichment in Nuclear Talks
Iran Warns Europe Against Politicizing UN Nuclear Report
Businessman Mauled by Lion at Luxury Namibian Lodge
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
Head of Gaza Aid Group Resigns Amid Humanitarian Concerns
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
×