Amazon courts third-party sellers amid FTC antitrust lawsuit

Amazon wants its third-party sellers to know they are appreciated.

At its annual sellers’ conference, hosted in Seattle this week, Amazon continually told the thousands of independent vendors in attendance that Amazon saw them as partners. Doug Herrington, head of Amazon’s worldwide stores division, told sellers they were a critical part of the “Amazon magic.”

That messaging comes as the company faces sprawling antitrust allegations, including that Amazon takes advantage of its relationship with those sellers. In a lawsuit filed last September, the Federal Trade Commission accused Amazon of coercing sellers into signing up for Amazon’s services and paying costly fees to the ecommerce giant in order to succeed on the digital storefront.

Amazon has denied the allegations, arguing its business practices spur innovation in the ecommerce industry and help bring prices down for online shoppers.

Without any direct mention of the FTC lawsuit, Amazon seemingly spent the three-day event this week reminding sellers that it wanted them to succeed – on and off Amazon.

Herrington told sellers Amazon was “going through another evolution” in its approach to what it offers sellers, adding that it wouldn’t have considered many of these services five years ago. Peter Larsen, a vice president at Amazon, said the company had worked to “bring the best of Amazon to your off-Amazon channels.”

Dharmesh Mehta, Amazon’s vice president for seller services, told attendees that their partnership with Amazon is “a force multiplier … Together, we’re writing the story of the most successful partnership in retail history.”

It’s still unclear what changes the FTC would like to see, and it could be years before the suit reaches a resolution. A federal judge has set a trial date for October 2026.

‘Does it affect me?’

Much of the sprawling lawsuit focuses on Amazon’s seller services and how it interacts with the independent vendors using its platform.

At the sellers conference, there was little mention of the regulatory battle unfolding – though Martha Stewart, who came to speak about her entrepreneurship journey, did gently jab at the high cost of fees Amazon charges sellers to use its services. Those fees are one of the many things that came up in the FTC lawsuit. Stewart’s remark was met with applause from the crowd.

Several sellers who spoke with the Seattle Times said they either were not following the ongoing lawsuit, or felt the resolution was too far off to be part of their day-to-day business calculations. All of those sellers asked to remain anonymous to protect their businesses.

One California-based seller compared the legal battle to the ever-evolving discussions about banning TikTok: It’s important. It will have a big impact no matter how it turns out. But “does it affect me?” the seller said. “I think people talk about it, but we have more pressing matters.”

Another seller said they weren’t concerned about the outcome because so much could change in the years before a resolution anyway – including if they even worked at the same business that currently sells products on Amazon.com.

Yet another seller said they doubted the outcome would have a big impact because, no matter the ruling, Amazon’s influence on ecommerce is already set in stone. Too many businesses rely on the platform to reach customers, and too many shoppers have come to expect the fast delivery speeds made possible through Amazon’s fulfillment network.

“If somebody had to stop them, then they had to do so long ago,” the seller said.

Multiple vendors described Amazon as a “necessary evil,” acknowledging that they needed the platform to reach customers but begrudging some of its power.

Angus Junkin, an Amazon seller who spoke with the Seattle Times after a media roundtable organized by Amazon, felt differently. He called Amazon the “ember that’s allowed me to get a toehold.”

Junkin, as well as four other sellers who participated in the press event, credited Amazon’s seller services with the success of their business. Junkin honed in on two services – Transparency, which helps small businesses combat counterfeit products, and Fulfillment by Amazon, which allows sellers to tap into Amazon’s fulfillment network to make deliveries.

Fulfillment by Amazon, or FBA, is one of the programs scrutinized in the FTC complaint. Regulators accused Amazon of coercing sellers into signing up for the program, partly by restricting access to a badge of “Prime Eligibility” only to sellers who use the service. The badge indicates to shoppers that the order will come with the free, two-delivery guarantee that is part of an Amazon Prime subscription.

Amazon has denied those allegations, maintaining that sellers do not have to use Amazon’s fulfillment services and that sellers can access the Prime badge when using other logistics services that are able to meet Prime customers’ expectations.

David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, previously said the allegation “that we somehow force sellers to use our optional services is simply not true.”

One seller who spoke with the Seattle Times at the conference this week said they voluntarily used FBA and it made deliveries easier for their small business.

Another said they chose not to use FBA and ended up constantly “working around” Amazon’s services.

A third seller, who also did not use the service, said Amazon’s account managers often tried to incentivize the service – but not any more than account managers at other fulfillment and logistics companies. Amazon promised lots of incentives for signing up, but didn’t threaten punishment if they decided not to, the seller said.

Amar Lingala, from freight company ShipGlobal.US, said the sellers he works with like FBA because then “Amazon doesn’t come after them.”

New features

Some of the new products Amazon introduced at the sellers conference were humorous – like a new feature called “Where’s My Stuff?” that helps sellers track global shipments. Others were practical – like the announcement that Amazon would quadruple the warehouse capacity for third-party sellers in one of its programs by the end of the year. Or, that sellers could sign up to auto-replenish products as their inventory went low.

And some were inventive: Amazon launched a new AI-powered chatbot to help sellers access information and advice about their store.

Still, other announcements were sobering. Piyush Saraogi, vice president for Fulfillment by Amazon, told sellers he knew that the shift to a regionalized delivery network was not easy for third-party vendors. To enable that shift, Amazon has built new facilities around the country in order to position items closer to customers and speed up deliveries. Sellers had the option to spread inventory across regions by splitting shipments or pay a service fee for Amazon to do it for them.

“I know this was a big change for your businesses and I want to own that we did not make it as simple as we could have or should have,” Saraogi said.

Throughout the conference, Amazon’s leaders acknowledged that not all merchants would want to use the same company for every service – while simultaneously making sure sellers knew that they could, in fact, use Amazon for everything.