Amazon CEO Jeff Bezos attends a commemoration ceremony held in entrance of Saudi consulate on the primary anniversary of his homicide, in Istanbul, Turkey on October 02, 2019.
Elif Ozturk | Anadolu Agency | Getty Images
Popular phone accent maker PopSockets accused Amazon of “strong-arming” it and failing to take away pretend merchandise.
David Barnett, CEO of PopSockets, testified throughout a House Judiciary antitrust subcommittee listening to on competitors within the digital economic system in Colorado on Friday.
Barnett mentioned Amazon pressured PopSockets to decrease the value of its merchandise on the platform and mentioned if it failed to take action, the corporate would supply product from the “gray market,” or third-party sellers. PopSockets sells grips that connect to the again of cellphones.
“One of the strangest relationships I’ve had with a retailer is with Amazon,” Barnett mentioned. “The agreement appears to be negotiated in good faith, but what happens is there are phone calls where we get bullying with a smile.”
An Amazon spokesperson instructed CNBC in a press release that the corporate sought to proceed working with PopSockets to offer “competitive prices, availability, broad selection and fast delivery” for these merchandise to its prospects.
“Like any brand, however, PopSockets is free to choose which retailers it supplies and chose to stop selling directly through Amazon,” the spokesperson mentioned. “Even so, we’ve continued to work with PopSockets to address our shared concerns about counterfeit, and continue to have a relationship with PopSockets through Merch by Amazon, which enables other sellers to create customized PopSockets for sale.”
Barnett mentioned Amazon makes use of a wide range of ways to “bully” companies, akin to threatening to ship extra stock again at a price to the corporate. He additionally disputed Amazon’s argument that there are different on-line marketplaces for companies to promote their items.
“We promote on the Walmart platform, gross sales are 1/38th of the gross sales we had on Amazon once we had a relationship,” Barnett mentioned. “And Target it is even much less. These are small fractions.”
PopSockets is simply one of many brands which have publicly expressed their dissatisfaction with promoting merchandise on Amazon’s market. In 2018, PopSockets tried to cease promoting instantly with Amazon, citing the aggressive pricing environment and different controlling ways, akin to not permitting PopSockets to promote its merchandise by way of a distributor. Barnett mentioned PopSockets is now “testing” a direct promoting relationship with Amazon.
Amazon mentioned it requires some fashionable, broadly accessible manufacturers to promote to it instantly to ensure it is providing the bottom costs in contrast with these provided at different shops.
The market has turn out to be more and more essential to Amazon’s enterprise and is made up of thousands and thousands of third-party retailers who distribute merchandise throughout many classes. It now accounts for more than half of Amazon’s overall sales on the platform.
Amazon additionally sells counterfeit, unsafe and even expired goods. During the listening to, Barnett mentioned there have been “enormous amounts of fake products” on Amazon, sufficient that PopSockets was discovering 1,000 counterfeits every day.
“It really harmed our brand,” Barnett mentioned.
While Amazon says it has a “zero tolerance” coverage for copycat merchandise and has developed instruments to assist handle the issue, its market continues to be tormented by pirated items. The downside has grown so extreme that advocacy teams have called for some Amazon websites to be added to the U.S. authorities’s annual “Notorious Markets” record, which names websites and firms that facilitate the sale of counterfeit items.
Earlier this week, President Donald Trump and China signed a new trade agreement that features a provision to stanch the sale of counterfeit items on e-commerce platforms akin to Amazon.