Third-party sellers made $3.5B during Prime Day, but that isn’t enough to save small businesses

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Prime Day sales aren't enough to save small businesses from Amazon
Image: Amazon

Free two-day shipping, an attractive slate of TV shows and movies, and an ecosystem of in-house products make Amazon pretty hard to resist. Despite the fact that its ethical practices are often questioned, consumers still flock to the e-commerce giant for all their shopping needs.

Amazon’s Prime Day 2020 sale just wrapped up on Wednesday morning. The Black Friday-like event undoubtedly brought in billions of dollars in sales as consumers tried to get their holiday shopping done early.

Now, Amazon reports that Prime Day helped third-party sellers make $3.5 billion. That’s an impressive figure for the two-day event. However, it isn’t nearly enough to keep small retailers in business as they fall under Amazon’s shadow.

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The Good

On the bright side, Amazon is trying to help small businesses. Although the effort comes after it has already stifled them with its massive size and unbeatable offerings, it’s better than nothing. Prior to Prime Day, Amazon ran a promotion that would give shoppers a $10 credit if they spent $10 at a small business.

That strategy alone reportedly helped bring in $900 million in sales for small businesses. The funding came as part of a wider initiative designed to help retailers that can’t compete with the e-commerce giant’s offerings.

In a statement, the company said, “Amazon is on track to invest $18 billion this year to help small and medium-sized businesses succeed in its store, and designed this Prime Day to support small businesses even more.”

The $3.5 billion figure brought in through this week’s Prime Day event marks a 60 percent increase over last year. That’s a sizeable jump—regardless of the other matters at play. Meanwhile, Amazon claims that the growth rate for small business sales during Prime Day outpaced its own. It didn’t reveal how much revenue it collected over the two-day span.

The Bad

Amazon is doing its best to not seem like the bad guy. In reality, it isn’t. The online retail titan hasn’t played dirty to get to the top. Instead, it offers a lineup of services and a shopping experience that can’t be beaten.

The way that it treats employees is a different matter. However, that isn’t what customers are thinking about when they hit “Checkout” on an item that will arrive at their doorstep as soon as a few hours later.

Nonetheless, Amazon is clearly seen as the harbinger of doom for the brick-and-mortar retail world. Things were already looking grim before the COVID-19 pandemic hit. In its wake, a huge number of traditional retailers could shut down for good.

Should that occur, Amazon is already planning on how it can capitalize. The company is reportedly interested in purchasing abandoned department stores in malls to turn into warehouses and distribution centers. Whether or not that will happen remains to be seen.

In the meantime, it is clear that Amazon’s efforts surrounding Prime Day won’t save small businesses. Customers rely on the e-commerce giant. It has become a common part of life. Perhaps more regulatory oversight is necessary to ensure that small businesses still have a chance to thrive in today’s increasingly digital shopping sector.

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