Amazon Grinch Shuts Down Small Business Competition During Holiday Season

It’s part of the American dream, to own your own business. Be your own boss. Venture out on your own and go as far as your abilities can take you. And for millions of American’s who own their own small businesses it works, except for those who sell through To be more precise: those small-businesses who Amazon judges to be too small. Amazon has become the Grinch who stole Christmas.

Amazon is the electronic version of a mega shopping mall. Of course you can’t get a churro and a lemonade at this mall but you can get pretty much everything else. Just like your local shopping mall it is filled with small businesses struggling to make a living. The only difference is that during the holidays your local mall doesn’t shut down the tenants in the mall who are not big enough.

Earlier this year I started selling a few things on Amazon sort of as a test. I was looking for a new product venture and wanted to test the waters with toys. The results have been less than stellar. Unlike in your local mall where you browse through stores and find the item you want on your own, at Amazon every like product from every store in the mall is displayed side by side. When that happens the only way you have to compete with one another is on price. You don’t even get to decide what your own shipping fees will be, Amazon sets them for you, like it or not.

Now it’s bad enough that I’m paying more to ship an item than Amazon will let me charge, on top of a nearly 20% fee I have to pay to Amazon when an item ships. Not to mention that I have to discount the item to begin with just to compete. But in September I started getting emails from Amazon telling me that because I wasn’t big enough that they were going to unethically shut down my Amazon store during the holiday season. The best time for selling toys.

Amazon has pages and pages of legal garbage on their web site defending their unethical action. Basically they just don’t care. They know that even if they cut off thousands of small businesses during the holidays that their big tenants will still be there and will fill all the orders. Sellers are a dime a dozen. Everyone wins, except the little guy.

Of course, there is a way, even as a business judged to be ‘too small’ by Amazon to sell during the holidays, can still sell their products on Amazon. To do that all you need to do is pay Amazon more money! Big surprise. It’s called Fulfillment By Amazon. The way to get around the ‘too small’ restriction is to pack up all your inventory, ship it to Amazon, and on top of all the other fees Amazon charges you, now you can pay them an additional monthly fee to warehouse your inventory. Every month you get charged a storage fee for every item Amazon holds for you in their warehouse, whether it sells or not. Plus another fee for Amazon to pack up and ship each order for you. Talk about the fleecing of America.

The other way around the restriction is to not be a small business. Just increase your sales and your orders to a level judged to be acceptable to Amazon and you will no longer be restricted during the holidays. Simple, right.

As a small business adviser when my clients come to me and ask me about selling in the big online malls like Ebay and Amazon I have always advised them to stay away. I was thinking of re-considering that advice and this new venture was part of a test to see if maybe I’d been wrong about giant online shopping malls. The only solace I get out of this is the knowledge that I was right to begin with to tell my clients to stay away from Amazon.

I shut down my Amazon store, deleted all my products, and told Amazon to send me a check. Of course Amazon doesn’t actually have people answering emails, only robots. So who knows if or when I’ll ever see my money. The left over toys have been donated and I have finished that experiment. Mine was just a test of the waters, the ones I feel sorry for are the small toy vendors out there who are shut out during the holiday season by the Grinch.

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