How eBay and Amazon are profiteering by screwing merchants

Let me be blunt from the start: If your business’s online presence lives on eBay and Amazon, then your business is going to be a financial slave. If it is a financial slave, it runs the risk of being financially ruined by these two Big Tech platforms.

Let’s take a look at this recent news article, Amazon sellers face ruin as tech giant threatens to withhold payments:

[Amazon] has been gradually introducing tougher payment terms for sellers, moving them on to a “DD+7” model in which they are paid seven days after an item is delivered, rather than when it is ordered.

Ostensibly,

Amazon has told sellers it is making the changes to keep money in reserve so that shoppers can receive refunds when they return items.

The end result: this change in policy will cause financial hardship, and worse still, financial ruin to merchants on their platforms.

Pattern of behaviour

This news article is shows only one example of an extended pattern of behaviour by Big Tech platforms.

All these Big Tech platforms (Google, Apple, eBay, Amazon, etc) follow the same modus operandi. In the name of serving the interest of their customers (e.g. buyers), they screw their sellers (e.g. authors, merchants, app developers). Almost 15 years ago, I read this biography of Jeff Bezos, the founder of Amazon:

When you read the book, you get the sense that Jeff Bezos’s philosophy is to obsessively give what the customers want. The sellers are the product to be sold. Since the sellers are not their customers, they can be screwed.

This philosophy is similar to how Meta behaves. The advertisers are the customers of Meta. Facebook and Instagram users are the product to be sold to the advertisers. Therefore, you can expect Meta to screw their users. For example, Facebook does not provide any ‘customer service’ to its users. As a user, it is extremely difficult to contact any humans within Facebook if you have any problems that require any human intervention. In fact, they go out to avoid any human contact by putting an impenetrable wall of automated processes and robots, stymieing their users from contacting any humans within their organisation. It is obvious they do not care about their users because they are merely products to be sold.

In the same way, eBay and Amazon sellers have to endure increasingly oppressive conditions from these two Big Tech platforms. For example,

Amazon provided overly-generous returns policy for eBooks. Authors have been exploited and protested for decades and Amazon simply does not care. That is because authors are not Amazon’s customers. They are merely the product to be sold. It is only a few years ago that Amazon cracked down on this widespread abuse by customers.
eBay has been increasing their fees relentlessly over the years. Today, if you sell anything on eBay, you pay fees of more than 13% on the combined retail price and postage cost.
Sellers used to be able to receive the payment after selling the product. Today, Amazon and eBay will withhold payments only after the item is delivered to the buyer. This is convenient for Amazon and eBay because they get to keep the money and earn interest on it, while the seller has to finance the gap (for free) between the purchase of inventory and receiving the money from sales.

There are many more examples. But you get the drift. Basically, the screws have been progressively tightened on Amazon and eBay sellers over the years. Because both of them are monopolistic markets. sellers feel compelled to list their products on these 2 Big Tech platforms. In return, both of them screw their sellers to improve their bottomline simply because they can.

Small independent business owners have to pay bills and feed their families too

Small, undefended business owners have no market power. They are small players. They are mums and dads who have to pay bills and feed their families too. But they are increasingly being crushed by Big Tech platforms.

If small businesses are being driven out of business by Big Tech and Big Business, what will happen then? You can be sure that customers will be their next target. That is why we are seeing enshittification everywhere.

What can you do as a small business owner?

As I wrote in Is your business a serf under social media’s feudalism?,

As a serf, your business is completely under the whims and control of the Facebook lord. Facebook can destroy your business’s online presence in a flash, whether deliberately or accidentally. They can change the rules, change their algorithms or shift the goalpost anytime they want. If that is going to severely impact your business negatively, then too bad.

If you want to be the master of your destiny, then your business needs its castle, which is in the form of a website. Not only that, but you also need to have a strategy to make your website the focal point of your online presence. Rented land, in the form of a Facebook/Instagram page/group, cannot be the focal point of your online presence. You need to find a way to nudge and direct your leads, visitors and customers from the Facebook lord’s rented land towards your castle (website).

In the same way, is your business under the whims of Big Tech platforms like Amazon and eBay?

It may be convenient for your business to be serf in the short term. But make no mistake: eventually, you will be screwed. For the above-mentioned Amazon sellers in the UK, some of them faced sudden financial ruin.