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Amazon Lent $1 Billion To Merchants To Boost Sales On Its Marketplace (reuters.com)

Posted by msmash on from the other-game dept.

An anonymous reader shares a report: Amazon.com Inc has stepped up lending to third-party sellers on its site who are looking to grow their business, a company executive said in an interview on Wednesday. The e-commerce giant has doled out more than $1 billion in small loans to sellers in the past 12 months, compared with more than $1.5 billion it lent from 2011 through 2015, said Peeyush Nahar, vice president for Amazon Marketplace. Sellers have used the money to expand their inventory or discount items on Amazon, he said. Boosting sales for third-party merchants is lucrative for Amazon, which takes a cut of transactions on its site. It also has made a business out of handling more leg work for sellers, too. They pay Amazon to fulfill their orders and boost their placement in search results, without which sellers might struggle to grab shoppers' attention. More than 20,000 small businesses have received a loan from Amazon and more than half of those have taken a second loan from the company, it said.

28 comments

  1. Anti-competitive bullshit. by Anonymous Coward · · Score: 0

    Seriously. Good luck trying to compete in the long term against strategies like this. eCommerce via a single platform sounds great but you can't honestly believe that once they knock most companies out of business they'll keep prices low for the products they have a direct interest in. Just because anyone can open up a store on Amazon now doesn't mean they won't start imposing higher base fees that increase the cost of the same product many times that of what it was when there was real competition.

    1. Re:Anti-competitive bullshit. by Anonymous Coward · · Score: 1

      This is exactly what Amazon does.

      Their fees are already ridiculously high. $1 fixed plus 15% of sale. They take another 10% of the anemic $4.50 shipping voucher. It's tough to send anything for $4, let alone priority to make the delivery time they demand, lest they refund the buyer no questions asked at your expense. You have no control over shipping regions, blocking fraudulent buyers, limiting quantities, etc. When it sends you a fraudulent buyer, you need $8 of signature confirmation, double insurance, and video footage to have a chance in hell of winning the A-Z claim. If you lose, forget appealing, robots automatically cancel them within the hour.

      Should you, despite all of this, have any level of success, Amazon merely steps up its attacks. It gates categories. It enforces pricing scales. It locks your account and demands suppliers and invoices and utility bills and DNA samples so it can squeeze you out. If that doesn't work, it floods your market segment with Chinese scammers who don't have to out up with any of that bullshit.

      Amazon is a monster and Americans keep feeding it without a care in the world for what will happen when it inevitably turns on them.

    2. Re:Anti-competitive bullshit. by ArmoredDragon · · Score: 1

      Why do you think so many counterfeit products are sold on Amazon?

  2. I suppose by Anonymous Coward · · Score: 0

    I suppose Amazon will now patent "One Click Buy on Credit".

  3. Re: Sad to see Bezos try to control even more live by Anonymous Coward · · Score: 0

    He is using this money to stomp out our freedom with his boot on our throats.

  4. How do you apply? by xxxJonBoyxxx · · Score: 1

    >> The loan program is invitation-only.

    I hope they're staying clear of "red line" regulations...

  5. Thanks for your service by Anonymous Coward · · Score: 0

    Like an American marine giving his life in some god-forsaken shithole to ensure my freedom I thank you for allowing me to get virtually anything I want delivered to my door the next day.

  6. Debt debt and more debt by Anonymous Coward · · Score: 0

    But the customers have no more money to spend than they did when the program started.

    1. Re:Debt debt and more debt by 0123456 · · Score: 1

      Amazon's stock price is based on belief in perpetual growth. If they can achieve that by giving money to people to buy their stuff, they probably will.

    2. Re:Debt debt and more debt by fubarrr · · Score: 1

      At least it is a step up from what Alibaba does. At least they do not implicitly suggest that this money is given to make store owners to buy stuff from themselves.

  7. I hope Trump shuts down the WaPo by Anonymous Coward · · Score: 0

    and throws Bezos in jail for spreading FAKE NEWS!

    1. Re:I hope Trump shuts down the WaPo by AutodidactLabrat · · Score: 1

      Only after Faux are in front of a firing squad for promoting that TRAITOR Trump into office!!

  8. So in other words by Lucas123 · · Score: 1

    Amazon has become the company store. Does this make them a monopolistic institution?

    1. Re:So in other words by ScentCone · · Score: 1

      Amazon has become the company store. Does this make them a monopolistic institution?

      What? Do you actually understand what that term means, in the context in which you seem to mean it? A "company store" (in the Eeeeevil flavor that you seem to want it to be) would be like a grocery store out on the edges of an old railroad project that becomes the only place the on-site labor can buy things. Or a "store" where the workers are paid in the form of credit at that store, and that's the only way to be compensated for their work.

      Amazon's offering of small loans to sellers who CHOOSE to use Amazon's high-visibility web site and fulfillment services is just one choice of many that such sellers can make. And they can still use Amazon's e-commerce platform by, of course, getting a loan (if they need one) through any of thousands of banks, government small business organizations, etc. No, the fact that Amazon also offers such services doesn't make them a monopoly. They're not the only company selling and shipping things after you use a web site to shop. They're not the only company allowing third parties to retail through their platform. And they're sure as hell not the only business offering capital to other businesses.

      --
      Don't disappoint your bird dog. Go to the range.
    2. Re:So in other words by Lucas123 · · Score: 1

      I believe it means lending money to the company employees to purchase groceries and other products. In this case, Amazon is lending money to its own customers in order to be able to afford the service.

    3. Re:So in other words by bws111 · · Score: 2

      It has never meant that. As for your second sentence, you do know that is quite common, right? Every hear of auto financing? Or gas credit cards? Or the fact that damn near every business gave credit to customers before Visa and Mastercard, etc became popular? Company store has a specific meaning - that an employee of a company has virtually NO CHOICE but to spend his income only on products offered BY HIS EMPLOYER. That is not even remotely the case here.

    4. Re:So in other words by Anonymous Coward · · Score: 0

      That begs the question: if enough people use /company store/ to mean something a bit shady, does.it actually mean that?

    5. Re:So in other words by Hognoxious · · Score: 1

      At least he didn't claim it was a ponzi scheme, which seems to have become millenialese for "something financial I don't understand".

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    6. Re:So in other words by Anonymous Coward · · Score: 0

      Is it anything like Uber offering car leases to its drivers?

    7. Re:So in other words by Anonymous Coward · · Score: 0

      No. It just means that you are fucking stupid.

  9. Worlds Second Largest Online Flea Market by Luthair · · Score: 1

    I don't know about the rest of you, but when I go to Amazon I go to buy from Amazon. If I wanted ebay, I'd go there.

    1. Re:Worlds Second Largest Online Flea Market by 0123456 · · Score: 1

      Ditto. I'd like an option to hide all the 'marketplace' crap, because I just don't want to buy from them.

  10. Amazon by Anonymous Coward · · Score: 0

    Where I seen a usb wifi stick advertised for 169.00 I got at frys 3 years ago for 19.99.

    1. Re:Amazon by Anonymous Coward · · Score: 0

      19.99? You were robbed.

  11. Interests by manu0601 · · Score: 1

    According to TFA, interests rates are between 6% and 14%. That seems huge. Why would anybody want to borrow at that rate while banks loans are cheaper?

    1. Re:Interests by bws111 · · Score: 1

      That is also in TFA. Banks consider small merchants a bad risk.

  12. Re:Sad to see Bezos try to control even more lives by Anonymous Coward · · Score: 0

    He has already destroyed the lives of thousands of us here in Seattle. He made our lives shit. I want to die after working there for 18 months.

    Don't you have freedom in America? I know in my country and in many countries some people are essentially forced to work in places, but they always tell me America is different. They tell me it's the Greatest Country in the World. But this man can force you to work and destroy your life? What happens when you call the police? Or are you, like the people here, too scared?
    When you say he destroyed your life, what does that mean? Do you live in a metal-walled shack with no running water? Or can you not afford a second iPhone?