Small Merchants Express Concerns Over Amazon’s Business Practices Ahead of Holiday Shopping Season

by Staff

As the holiday shopping season approaches, small merchants are voicing apprehensions about Amazon’s business practices, citing challenges exacerbated by the e-commerce giant’s dominance. A recent report by the Canadian Federation of Independent Business (CFIB) sheds light on the difficulties small businesses face in competing with large multinationals in the digital marketplace.

Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB, said that while e-commerce presents opportunities for small businesses to expand, many encounter hurdles when attempting to compete with online giants. Pohlmann notes, “… a number of them report that Amazon’s business practices can make it more challenging for them to compete.”

The CFIB report indicates that 55 per cent of small businesses using Amazon’s Marketplace expressed dissatisfaction with their experience. Complaints ranged from confusing fees to inadequate customer support. Small business owners reported lower search result rankings and a lack of control over refund decisions, impacting their ability to generate online sales and affecting their bottom line.

In response to these challenges, small businesses are calling for increased fairness in the e-commerce space. Approximately 48 per cent of small businesses find it increasingly difficult to compete with e-commerce giants, citing issues such as shipping costs that hinder their ability to rival larger retailers online.

CFIB recommends that the federal government take steps to ensure fairness in the digital economy, proposing measures such as using the ongoing Competition Act review to protect small businesses and making programs like the Canada Digital Adoption Program (CDAP) more accessible for digital transformation.

Amazon, which claims to be committed to small business success, is urged to enhance transparency in its operations. Recommendations include providing clear guidelines on search algorithms, reducing service fees, actively promoting products from small businesses, and facilitating better access to data and analytics for small businesses.

Michelle Auger, CFIB senior policy analyst, emphasizes the importance of supporting small businesses during the holiday season, stating, “Small businesses reinvest 66 cents of every dollar earned in their communities, while Amazon only keeps 8 cents of every dollar local.”

For more details, the full “Challenges of Competing in a Digital World” report can be accessed online.

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