By charging sellers on its site various fees, Amazon is claiming about 30 percent of sellers’ revenue, compared to 19 percent five years ago, according to a study by the Institute for Local Self-Reliance (ILSR).
The fees totaled $60 billion last year, compared to $35 billion the company made in its cloud computing division, and now account for 21 percent of Amazon’s total revenue.
“Amazon’s revenue from seller fees has grown so large that sellers are effectively subsidizing Amazon’s retail division,” the study said. “Last year, seller fees covered more than three-quarters of Amazon’s total shipping and fulfillment expenses, including the costs of operating its warehouses, providing customer service, and processing payments.”
The study claims Amazon’s fees have grown so large, they make it “nearly impossible for sellers to sustain a profitable business.” The report asserts that most businesses fail.
ILSR reprised its call for Amazon’s divisions to be spun off as separate companies to eliminate the risk of it continuing to leverage monopoly power.
TREND FORECAST: In the coming years, there will be strong anti-monopoly movements across the country – and the world – to break up big retail and big tech. It will be another platform in the anti-vaccine, anti-tax movements of a new political party.
