Dive Brief:
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Since the beginning of this year, Amazon has created 150 tools and services for small businesses, the company announced in a press release last week. The tools range from the Sold By Amazon tool, which helps retailers manage their pricing, and Target Inventory Level, which helps retailers manage inventory.
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Independent retailers — mostly small and midsize companies — comprised 58% of all physical merchandise sold within the Amazon's stores last year, Amazon also noted in its press release.
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Amazon's tools are expected to create new jobs and growth over the next three years, the company stated. "Based on our recent survey data, we know that greater adoption of digital technology, such as online retail capabilities and tools, could unlock small business job creation and growth to the tune of 360,000 jobs and $140 billion over the next three years with the greatest potential impact on small businesses in rural America with annual revenues under $100,000," Tim Day, senior vice president of the U.S. Chamber's Technology Engagement Center, said in the statement.
Dive Insight:
This isn't the first time Amazon has positioned its tools as beneficial for small businesses. Earlier this year, the company boasted that "more than 50,000 small and medium-sized businesses exceeded $500,000." Earlier this month, the company announced a new project in an attempt to lure retailers into its "Sold by Amazon" program, which automatically sets sellers' prices.
It's understandable why smaller retailers use Amazon to reach shoppers. After all, 28% of shoppers begin their product searches on online marketplaces like Amazon and eBay.
However, relying so heavily on Amazon may come at a cost. For one thing, the online retail giant has the potential to have a great deal of control over sellers' ability to reach customers. Earlier this year, it was reported that the retailer temporarily stopped vendors from selling their goods on the platform. Such incidents are a reminder for retailers of the importance of building direct relationships with their customers.