Why Amazon’s Mistreatment of its Sellers is a Matter of Public Interest
In a new report, Moira Weigel focuses on the third party sellers who fuel the company’s global retail business.
In her Data & Society report Amazon’s Trickle-Down Monopoly: Third Party Sellers and the Transformation of Small Businesses, Moira Weigel tells the story of a group of hidden intermediaries who have played key roles in making Amazon one of the most powerful corporations in the world, while remaining mostly invisible to customers: third-party sellers. Since its release last month, the report has drawn attention from Semafor, Marketplace, and Vice, among other outlets, and interest from those curious about Amazon’s opaque workings and their own interactions with the company. We spoke to Weigel about how she made sense of Amazon’s sprawling global marketplace, how the company’s engagement with third-party workers is (and isn’t) like that of ride-sharing apps, and the limits of conscious consumption.
Data & Society: Even within the expansive universe of Amazon, the world of third party sellers is a sprawling one. So how did you approach this research? Was there anything that surprised you at the outset?
Moira Weigel: I didn’t know a lot about ecommerce before I started this research a few years ago. In the past, I’ve written about people’s sex lives. I’ve written about sex work. I’ve talked to people doing illegal cross-border gestational surrogacy. But I’ve never met people more paranoid about talking to me than Amazon sellers. I had this idea that I would just find people who sold through Amazon, and some percentage of them would talk to me — because why wouldn’t they? That’s not at all what happened, and it took me a while to get into this world. Then once I did, it felt like it was a world that really hadn’t been described comprehensively, by anyone. No researcher had put together a qualitative description of it. What I realized when I started talking to people is that participants in this marketplace, even quite experienced ones, didn’t necessarily feel like they had a sense of the longer history of the marketplace or the broader context — probably because the community is so secretive and because the terrain changes so fast. A lot of the work the report is trying to do is descriptive and synthetic and trying to just make a map of this sprawling, global entity that is Amazon’s marketplace.
A deep commitment of mine, and part of why I wanted to come to Data & Society as a fellow, is to tell the story of technology through the people who use it — and to believe in and trust the expertise of ordinary people who navigate these systems every day for their livelihood. And so in addition to trying to write a comprehensible account of what Amazon’s global retail business is and how it’s how it’s grown, I wanted to try to do justice and give space to a lot of the human stories I heard about navigating that marketplace. In many respects, I think that the folks who are hustling this global system have a better understanding of it, at least collectively, than anyone, including anyone who works at Amazon.
D&S: Most of the sellers you interviewed took for granted that they and their business were vulnerable to Amazon’s ever-changing and often inexplicable policies — they understood that as something they could not change. You write that instead, “when expressing criticism, they focused on Amazon’s failures to properly govern its platform.” What is the distinction between those things, from sellers’ point of view?
Weigel: There’s this kind of moral imaginary built up around big and small businesses in the United States. At the most basic level, the narrative we’ve inherited is about the big business eating up and destroying the small business. So I thought I’d hear a lot from sellers about Amazon copying their products. But in 40 or 50 interviews, that never once came up on its own. I asked about it, and people said things like, Well, look, that can always happen. That’s just the risk you’re taking. The kinds of harms that were newer to me were what sounded more like networked harms, or algorithmic harms — things like bans or suspensions and down rankings that the sellers felt were unjustified, or in many ways were just inscrutable. One category of those harms is where Amazon is most likely doing something through an automated or semi automated system, and the results feel unfair. A whole other category is the company’s failure to govern interactions among competitors, including issues like abuse.
For years, Amazon has had endless problems with people buying fake reviews for products. Now, because Amazon has become stricter about policing that, there’s a ploy where people buy fake positive reviews for their competitors. Then the competitor gets suspended, because it looks like they’re buying the fake reviews. There’s also a design feature where anyone has to be able to contribute to a listing. So people will go into their competitor’s listings and add the kind of claim about a product that is not allowed, and then that will get them suspended.
In any given instance, these things seem quite banal: we’re dealing with things like bath gel or socks or kids toys. But these governance failures have real consequences for people’s livelihoods.
D&S: As you point out in the report, sellers give Amazon a sizeable percentage of every sale that they make through the platform — which essentially means that one of the largest corporations in the world ends up benefiting from loans and other resources that the state has specifically designated to support small businesses. What is at the root of this situation, and do you see a way to address it?
Weigel: There’s a long held idea in the United States that the small business is an engine of liberty and opportunity, and that it is a prerogative of the state to facilitate and protect that in a variety of ways. Entrepreneurship is a state project, backed by public resources: by particular kinds of tax breaks or low interest rate loans, in some cases by direct subsidies. The most recent study shows that Amazon takes on average over 50 percent of every sale that a seller makes, which is an extraordinarily high percentage. So, think about the fact that some businesses started for Amazon are backed by minority business loans or CDFI loans: If Amazon is getting 50 percent of every sale from those businesses, we can see that as a kind of upward wealth transfer of those resources. I think this means that Amazon’s mistreatment of its sellers is a matter of public interest.
The romance of the small business in America has real pull for real reasons. I talked to many people for whom the idea of not having a boss, of working for themselves, was a very important motivating factor. Part of that romance is that you don’t have to deal with the red tape of the state or of a corporation. But there are so many peculiarities of the Amazon marketplace, and specific requirements and rules that are changing all the time that sellers have to navigate. So if the ideal of entrepreneurial endeavors is for a small business to be a site of independence from these large bureaucratic entities, Amazon creates its own whole regulatory system and red tape that’s potentially even even more opaque and unresponsive than a government system or large corporate system.
D&S: When it comes to their engagement with third party workers, you draw some comparisons between Amazon and Uber and Lyft. How are they similar, and where are there crucial differences in how they operate?
Weigel: All labor is increasingly platform mediated. Platforms like Uber have successfully redefined employees as independent contractors, and increasingly many industries define everyone as an entrepreneur. This process actually began well before the explosion of platforms, but platforms have facilitated the extension of it — fissuring work, and using algorithms to taskify and manage it in ways that let large corporations avoid responsibility for benefits and protections to employees.
The third party sellers I spoke to really are entrepreneurs in meaningful ways. They get small business loans; in many cases they have employees and contractors and manage other people. But they’re subject to many of the same dynamics that are familiar to us from thinking about platform mediated work, having their entire livelihood and their practices of work managed and governed by Amazon’s metrics and algorithms.
If we think about what it would mean to Uber-ify a retail business: the company doesn’t have to own the inventory anymore. They don’t have to find the inventory. They don’t have to source it. Other people do all the work and take on the risk. There are a lot of parallels, but what really interested me is that the sellers become intermediaries for the dissemination of those logics into an even broader system. So it’s almost like the third party seller becomes an extension of Amazon.
D&S: Your ongoing research will focus on exploring the role of gendered and racialized identities in Amazon’s marketplace. What are some of the questions driving the next phase of this research?
Weigel: I’m interested in all these different actors in the world that Amazon has disrupted. How does the growth of this Amazon infrastructure create opportunities and vulnerabilities at different levels? Amazon actually has some lending programs and incubators targeted to Black, Latinx, and Indigenous entrepreneurs. I’m interested in how Amazon, as part of branding itself as this engine of opportunity for small businesses, is plugging into these pre-existing infrastructures and resources and ideologies around Black-owned businesses and women-owned businesses, and so on. Many sellers are working in family business settings and kinship groups. I interviewed immigrants and second generation Americans who were working with family to source foods or goods from China or Latin America to sell on the Amazon market. I’m interested in exploring how those identities and communities shape the marketplace and are, perhaps, reshaped by it.
There is this whole narrative around being an Amazon seller, that it’s something you can do from home or as an alternative to full-time wage work. Just about every mother I interviewed for the report started doing this because it was something they could do while taking care of their kids. This was most pronounced in the case of the so-called arbitrageurs, people who buy stuff in stores to resell. In the activity of arbitraging, there were people who identified as moms who were coupon queens, shopping queens. And then the men who did it identified through this category of the Amazon nomad, even though they are doing the exact same thing. There were these very strongly gendered frames for interpreting what they did, particularly when it comes to gender within the family.
D&S: Amazon is so dominant it can seem impossible to avoid. When you tell people you research Amazon, that must elicit all kinds of responses: confessions about consumer behavior, questions about what they should do differently and how. What do you hear in those situations, and what do you tell people in response?
Weigel: Maybe this just says something about my social universe, but almost everyone I speak to about it expresses guilt or embarrassment about shopping on Amazon. Almost universally, they tell me they do it because it’s so easy; it’s so efficient. In terms of what to do…I think that individual consumer behavior matters. But I also think we’re talking about something at a scale where individual boycotts of Amazon are of limited use and utility. Conscious consumption is probably better than nothing. But there are real limits to it.
In different places in the US, I’ve spoken to sellers who have banded together into larger groups to try to get Amazon’s attention when they have a problem, or in the hopes that it gives them a little more bargaining power. Frankly, that all feels pretty small compared to the scale of Amazon, but watching it happen at the same time as some of the unionization efforts underway in the fulfillment centers makes me think that if change comes it will be through a combination of regulation and new ways of building collectivity among the people who depend for their livelihoods on the platform. Those feel to me like more promising avenues than the individual consumer strike.
Read Moira Weigel’s report, Amazon’s Trickle-Down Monopoly: Third Party Sellers and the Transformation of Small Businesses.
