By buying inventory from manufacturers and selling it to Amazon, distributors act as a middleman between Amazon and retail brands. CNBC says Amazon’s EU arm told distributors Wednesday that it will stop sourcing their products. Distributors can still sell products on Amazon as third parties.
It will take until April for Amazon to roll out the change, according to the spokesperson. As Amazon deals with a deteriorating economic outlook and slowing sales, CEO Andy Jassy is cutting expenses across the board. In the past, Amazon has grown excessively, hiring quickly and expanding its physical footprint, which left it with ballooning costs, a surge of employees, and too much space.
This resulted in Amazon beginning layoffs in January that affected up to 18,000 people, putting a corporate hiring freeze in place, and closing some experimental projects. In his consultancy agency that helps vendors do business on Amazon, Martin Heubel, a product selection expert, says Amazon gains more control over its relationships with brands by cutting ties with distributors.
Alexis Boutilier is from Vancouver, British Columbia. She has a high interest in all things tech and loves to stay engaged on all the latest appliances and accessories.