“Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America,” wrote Paul Krugman, in a recent New York Times op-ed.
Wiser, a company that helps retailers to stay competitive in pricing, agrees with this sentiment. Its new campaign, “Don’t Get Amazoned,” wants to make sure retailers that use Amazon are able to stay competitive.
“A retailer is ‘Amazoned’ when Amazon takes the sales data acquired by retailers, identifies certain trends, and then uses that information to undercut the original seller,” Wiser CEO Arie Shpanya told Business Insider. Indeed, many retailers feel that Amazon uses them as a product-testing laboratory, the Wall Street Journal reported back in 2012.
The campaign gives retailers practical tips on how to compete with Amazon, like reducing the amount of inventory they sell through the site, and listing products so that customers are redirected to buy the item directly from the seller rather than through Amazon.
There are, of course, many arguments that Amazon is good for retailers. For one thing, Amazon can benefit them by offering them exposure they wouldn’t get otherwise. Those that list their items on the website frequently experience record growth through Amazon sales. The Amazon marketplaces gave retailers a way to “come and compete” with Amazon and sell to its customers and prospects, according to Amazon’s Senior Vice President of Seller Services.
“Amazon is a double-edged sword,” Thomas Frenchu, chief operating officer of Tabcom LLC, told the Wall Street Journal. “You have to deal with them, you have to be on their site, but we also have to fight harder and harder every day to compete with them.”
Amazon has struggled with retailers in the past: its most notable dispute to date has been with publishing group Hachette over ebook pricing, and is ongoing.
Shpanya believes that retailers could become more competitive by adopting Amazon’s data-driven approach to forming pricing strategies, but he is not encouraging retailers to quit Amazon cold-turkey.
“We are definitely against the power of Amazon and are trying to raise awareness about its practice of undercutting smaller retailers. But we do not expect retailers to completely switch gears and shut down their Amazon channel all at once,” he told Business Insider.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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