Amazon has abruptly stopped placing orders with thousands of wholesalers, encouraging them instead to sell directly to customers, sparking widespread panic.
According to Bloomberg, Amazon has cancelled orders with thousands of wholesalers who sell items directly to the ecommerce giant, asking them instead to begin selling as third part retailers on the platform.
Last week a Forbes article suggested that many suppliers had received notification from Amazon not to expect any future purchases, threatening to significantly impact many sellers that are heavily dependent on Amazon, even putting some out of business.
“We regularly review our selling partner relationships and may make changes when we see an opportunity to provide customers with improved selection, value and convenience,” Amazon stated.
The move, which Amazon is understood to have begun just two weeks ago, is reportedly aimed at driving up the profitability of Amazon’s core online marketplace.
Forcing sellers to target customers directly lowers the cost of purchasing, shipping and storing items for Amazon, removing the risk of buying inventory it doesn’t sell.