Amazon.com has introduced steep entry fees for third-party merchants wanting to sell some of the world’s top brands on its site. The move showcases how Amazon Marketplace is changing its focus from resellers to brands.
Amazon.com this week started requiring hefty one-time fees from third-party merchants wanting to sell products by some of the world’s top brands on its site.
Merchants of Nike products say they are being charged a $1,500 fee.
Additionally, threads on Reddit and on an online merchant forum hosted by Amazon mentioned that the company is requiring upfront payments for the opportunity to sell dozens of other brands, including Adidas, Microsoft and Lego.
The move underscores the rapidly changing nature of Amazon’s Marketplace, a platform for third-party vendors that’s become one of the company’s main gushers of cash. Long a wild province mostly populated by resellers and arbitrageurs, Marketplace is now increasingly seen as a channel where manufacturers and brand owners can sell their own merchandise to consumers, and more tightly control who distributes it.
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Amazon has had requirements for how merchants handle certain brands, such as showing Amazon proof that the brand owner authorizes the vendor.
But charging a steep entry fee for distributing the products of the most famous brands significantly raises the bar. It seems engineered to discourage counterfeiters, a problem that has long hobbled Marketplace, as well as small-time unauthorized resellers that would otherwise be really hard to police.
“They can contain friction from bad actors a lot more easily,” said Chris McCabe, a former Amazon investigator who now advises third-party merchants on how to deal with the tech giant’s sometimes obscure processes.
Amazon confirmed the policy and that Nike products are subject to it, but wouldn’t disclose how many or what brands are under similar restrictions, nor the specific range of the fees.
“We want our customers to be able to shop with confidence on Amazon. We consider several factors when determining qualifications and criteria to sell certain products,” a spokesman said. “For certain products and categories, Amazon requires additional performance checks, other qualification requirements, and fees.”
The measure also comes amid other moves by Amazon to mold the disparate array of vendors using its site into leaner, meaner selling machines indistinguishable from its own retail unit.
At a recent conference for women entrepreneurs, executives with the tech and retail giant said they were working on tools to allow sellers to detect and address troubles before they lead to a suspension of their selling privileges by Amazon.