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Amazon denies plan to purge small suppliers in favor of big brands


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Amazon denies plan to purge small suppliers in favor of big brands Inc. has denied a report claiming that the company is preparing to let go of "thousands" of smaller suppliers in favor of big brands.

Bloomberg News reported May 28 that the e-commerce giant is planning to remove smaller sellers from its online marketplace as it aims to slash costs and focus wholesale purchasing on bigger suppliers like The Procter & Gamble Co. and Sony Corp.

The news outlet, which cited three people familiar with the plan, said Amazon's plan is in line with its campaign to eliminate counterfeit products from its site, while making sure that it has enough supplies of consumer staples, helping it compete with consumer goods retailers like Walmart Inc., Target Corp. and Best Buy Co. Inc.

However, a spokesperson from the e-commerce giant told S&P Global Market Intelligence in a statement that Bloomberg's story and sources are incorrect.

"We informed Bloomberg prior to publication of their article that their sources and story are wrong. We review our selling partner relationships on an individual basis as part of our normal course of business and any speculation of a large scale reduction of vendors is incorrect," the spokesperson added.

According to the report, the potential move could end Amazon's ties with many of its long-time vendors since opening its site to independent sellers almost 20 years ago. One of the sources reportedly said that Amazon did not renegotiate annual terms with many of its smaller merchants, signaling a potential supplier shakeout.

"Like any business, we make changes when we see an opportunity to provide customers with improved selection, value and convenience, and we do this thoughtfully and considerately on a case-by-case basis," the Amazon spokesperson said.

Shares of the Seattle-based company closed down 0.94% to $1,819.19 following the news.