Mar 30, 2022 - Technology

Exclusive: Small businesses fear Amazon shadow, survey finds

Illustration of an Amazon package in a city

Illustration: Lazaro Gamio/Axios

Small businesses say Amazon's dominance is one of their most significant challenges in a new survey Wednesday from an anti-monopoly group shared exclusively with Axios.

Why it matters: Tech giants and their critics are both looking for support from small businesses in their lobbying battles over antitrust bills, due to the outsized sway small firms can hold with lawmakers.

Details: The Institute for Local Self-Reliance surveyed 908 small businesses online in January to solicit their views on the challenges they face and the policies they believe would help.

  • Retailers made up a majority of the respondents, with others including manufacturers, farms, banks and restaurants.

By the numbers: The businesses said their top issue is large competitors receiving better access, pricing and terms, with 65% saying it was a significant challenge.

  • 62% of respondents identified Amazon's market dominance as an "extremely significant" or "very significant" challenge, with 50% calling it "extremely significant."
  • 58% said large competitors selling at a loss is a significant challenge.

Between the lines: ILSR also surveyed a smaller subset of 94 businesses that have sold on the Amazon marketplace.

  • 74% of that subset’s respondents don’t think Amazon’s algorithms are neutral, and suspect them of favoring Amazon’s products over third-party sellers.
  • 55% said they would not feel comfortable speaking out about concerns about Amazon's treatment of sellers.

What they're saying: "They're understandably afraid to speak out," Stacy Mitchell, co-director of ILSR, told Axios.

  • "Part of the reason we did this survey is to make sure that small business voices were heard in some fashion on Capitol Hill as lawmakers are considering legislation that would potentially break up or regulate the Big Tech companies."

The other side: ILSR circulated its survey to members of more than a dozen small business organizations as well as online forums and networks for entrepreneurs. In a statement, an Amazon spokesperson said the survey lacks credibility.

  • "The truth is that sellers have more options than ever, and a recent study found the average small or medium-sized business uses five different methods of selling products to customers—they have choices and continue choosing to sell on Amazon and elsewhere," the spokesperson said.
  • "Our focus is on continuing to work hard on behalf of our sellers to make Amazon the best place to sell products and grow a business.”
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