Exclusive: Amazon bypasses wholesalers to source directly from brands

In an email seen by Retail Week, Amazon said it had reviewed its options and believes this approach will help control its cost base and keep prices low for customers.

Amazon emphasised that wholesalers will still be able to sell their products through its marketplace and said it will continue to work with wholesalers if they have sole distribution rights or are the brand owner.

The email said: “As part of a procurement policy implemented at a European level, Amazon has decided to focus on sourcing brands directly from brand owners.

“As a result, we hereby inform you that we will stop sourcing the brands included at the end of this email (ie, products where you are not the brand owner).”

It goes on to say that vendors can reach out for support and create a “Seller Central account” to become a third-party seller.

The change follows its Q4 results that showed Amazon Web Services fell short of expectations by producing an operating income of $5.2bn (£4.3bn) on $21.4bn (£17.5bn) of sales, which was lower than analysts predicted.

An Amazon spokesman said in a statement: “As is common for all businesses, we regularly review our approach to product sourcing as we try to control our costs and keep prices low for customers. 

“With this in mind, we’ve decided to focus on sourcing certain products for our European stores directly from brand owners. We will continue to source products from wholesalers and distributors if they are the brand owner or have sole distribution rights. 

“Wholesalers and distributors are still welcome to work with Amazon and can choose to sell these products to customers directly on our store through Amazon Marketplace as a third-party seller. In order to help wholesalers and distributors prepare for this change, we will not implement this change until April.”

• Get the latest retail tech news and analysis straight to your inbox – sign up for our weekly newsletter