Kerrigan in TippsInsights: Potential Amazon Breakup Will Harm Many Small Businesses

By SBE Council at 20 September, 2023, 11:27 am

In a TippsInsights blog post, SBE Council president & CEO Karen Kerrigan reports on the latest “Small Business Check Up Survey Q3” and points out that Amazon small business sellers are quite worried about potential Federal Trade Commission (FTC) action that would impose “structural remedies” on (and possibly break up) Amazon, according to the survey.

Nearly 80% of small businesses that sell on Amazon expect negative impacts from potential FTC interference. Specifically, these include sales disruption (31%), employee layoffs (22%), loss of customer base (17%), potential business closure (16%), and increased sales/marketing costs (15%).

Kerrigan notes that Amazon sales represent a modest share (23%) of small business seller revenue, as small businesses use a wide array of methods and channels to drive sales and access the consumer marketplace. For some small businesses, these sales are minimal.  For others, it is sizeable. But every sale is vital to the survival and growth of a small business.

“Obviously, small business owners are striving to ‘meet customers where they are’ so they utilize diverse sales channels and methods in order to meet the needs and preferences of customers. Consumers actually drive the market, but the FTC mistakenly asserts that a few big companies are manipulating the retail space (and by extension, small businesses) which is absurd,” writes Kerrigan.

Like many small business owners, Kerrigan adds that she is bewildered by FTC Chairperson Lina Khan’s views and actions on the Amazon model and its services “given the exciting dynamism in the U.S. economy and the fact that competition is prevalent in the retail and online retail space. Such dynamism and competition are being driven by ever-changing and evolving consumer preferences and needs. The Amazon marketplace is one but channel to find and attract loyal customers, and small businesses greatly benefit from this opportunity.”

Ultimately, what the FTC is doing “favors market incumbents and bigger businesses,” observes Kerrigan, which works against “the competition agenda” the FTC claims it is working to promote.

Read more here.