While expanding its reach to new markets across the world, Amazon (AMZN) also evolved as the preferred selling platform for big brands. Small-scale merchants often get eclipsed by their larger and more organized counterparts, prompting them to depend more on relatively smaller platforms like eBay (EBAY) to ensure brand visibility.
It is estimated that more than a quarter of a million new merchants join Amazon every three months, which is definitely significant compared to the other e-tail players. But in business, it’s hard to say how much is too much. eBay, which follows a business model that is slightly different from most others, has accused Amazon of poaching its merchants.
Employees of Amazon allegedly lured eBay sellers into the former’s marketplace by misusing its seller messaging facility. According to eBay, the ‘unlawful’ practice has been going on for many years across all markets. Earlier this week, the company alerted Amazon about the issue by sending a cease-and-desist letter.
It is estimated that more than a quarter of a million new merchants join Amazon every three months
While asking the management to stop the practice immediately, the letter also cautioned that if Amazon fails to comply with the request, appropriate action would be taken against the company. In a statement given to the media in response to the allegation, an Amazon spokesperson said a detailed investigation was launched into the matter.
eBay claims to have accessed several hundreds of doctored messages, with altered email addresses and names, asking merchants to migrate to the Amazon platform.
Small sellers lured by the vast scale of Amazon often end up disappointed due to lack of proper response and abrupt changes in the terms of service, which force them to move merchandise to less crowded platforms. Over the years, Amazon earned the ire of the not-so-big sellers for its unreasonably harsh policies such as deactivation of accounts for minor faults.
However, the company is waking up to the issue – the result is softening of the policies and a slew of attractive reward programs for sellers, along the lines of those offered to customers.
After crossing the $2,000-mark last month to reach a new peak, Amazon shares retreated and mostly remained in the red since then. The stock traded down 1% in the afternoon on Wednesday. On the other hand, eBay pared some of its recent losses and traded slightly higher.
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