Amazon slammed after demanding 'ridiculous' increase in cut of sales

One of those affected, a vendor through Amazon’s site who wished to remain anonymous, told Retail Week that Amazon is increasing the slice it takes from his sales by 10%.  

The etailer previously took a 9% cut from sales but now wants 19%.

In an email sent last week, seen by Retail Week, Amazon warned that if he did not respond it will automatically enforce the increase.

The increase will be backdated to January 1.

The revelation came as retailers face increasing scrutiny over their dealings with business partners – typically suppliers – in the wake of revelations about the practices employed by companies ranging from Debenhams to Tesco.

The email, sent last week from Amazon’s vendor management team, states: “We want to work with you to achieve a successful 2016 and, in order to do so, we require terms that allow us to support the growth of your brand and offer customers your full selection, compelling value, and a hassle-free experience.

“We have carefully looked at the current economics on your account and it is underperforming when we benchmark your business against other similar suppliers.”

It added: “The increase in terms represents what Amazon requires in 2016 to continue focusing on the growth of your products on the site.”

However, the supplier told Retail Week: “We are not underperforming on all the key metrics. There’s no justification for it. It’s ridiculous in the extreme and not the way I would expect to be treated as what they call a ‘valued business partner’.”

He added: “I also deal with Tesco, Asda and Morrisons and have never had an email like that from them.”

The supplier said he has responded to the email, but has yet to hear back. He vowed to walk away from Amazon if it did not change its approach.

An Amazon spokesman said it does not discuss individual agreements but is in regular contact with suppliers about contracts.