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Companies Who Partner With Amazon Receive Preferential Treatment?

Aug 09, 2014 01:55 PM EDT
Amazon's Jeff Bezos
(Photo : Getty Images/ David Ryder / Stringer)

According to a recent study by market researcher L2, entitled "Great White Shark," Amazon is thought to provide advantages to those suppliers that partner with the online giant, as reported on by Bloomberg.

Some of the advantages those suppliers can enjoy, include receiving better product placement or even promotional incentives that may not be offered for their rival's products.

As for those that do not partner with the online site, Bloomberg reports the study finding that "they aren't able to reap the rewards of sales that instead flow to third-party merchants."

"On the list of companies that mistreat their suppliers, Amazon is one that stands out," stated Sucharita Mulpuru, an analyst at Forrester, to Bloomberg.

An example that helps illustrate the point is how the experience for Ralph Lauren Corp. and Levi's vary on Amazon.

As Bloomberg reported via the study, "Ralph Lauren, which doesn't have an agreement with the Web retailer to offer its clothing or accessories through the site, had more than 9,000 items available on Amazon as of April via resellers."

"By contrast, no merchandise from Levi's, which has a deal to distribute its apparel on Amazon, can be purchased from a reseller. Levi's products are only available from Amazon itself."

Scott Galloway, a marketing professor at New York University's Stern School of Business and co-founder of L2, which is the New York-based research firm that conducted the survey, spoke to Bloomberg on how L2's researchers began to look into Amazon and its supplier practices when the team was blocked from selling any Levi's items, as a reseller through Amazon.

Burberry is another example L2 spoke about to Bloomberg.

"Burberry began selling to Amazon and featuring its products on Amazon's Luxury Beauty store last year, particularly making its line of fragrances available on the site, according to L2. In exchange, third parties are restricted from listing certain Burberry goods on Amazon."

With the L2 researchers noting, "Burberry has strategically traded the official distribution of a limited number of its SKUs in exchange for Amazon cleaning up third-party distribution of other Burberry products."

Even L'Oreal has been reported to subside the sale of its Kiehl's brand by resellers on Amazon, the researchers added.

We want to know what you think about the possibility of Amazon's open bazaar policy possibly not being as open as it seems. Do you think this is the nature of the business, or should it be a cause for alarm?

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