But the visibility and accessibility big tech companies give to smaller businesses around the world come at a price.
Hirschkorn said Amazon takes an 18 percent cut, including VAT, of the sale of each product, which he calls a “very hefty chunk” in a business with slim margins. The company has tried to shift sales away from Amazon to its own website, but soon discovered it went from paying one tech giant to another.
“It used to be that we were very keen to drive traffic from Amazon to the website because each sale was cheaper, but now we’re spending almost as much as a percentage of our sales advertising on Google as we would be paying fees to Amazon,” Hirschkorn said. “Either way one of the big Silicon Valley companies is going to win.”
“We spend billions of dollars each year to help our selling partners succeed in our store, driving traffic, operating the servers and infrastructure that keep our online store open at all times, and combating fraud and abuse. Our biggest single capital expenditure is our fulfillment and distribution network, which directly benefits our selling partners, who now have as many units in that network as Amazon itself,” a spokesperson for Amazon told CNBC via email.
“Our investments allow our selling partners to focus on their products while reaching customers throughout the world, leveling the playing field and lowering entry barriers. Today, our selling partners are outperforming Amazon retail — they have grown from zero to 52% of paid units sold, and continue to grow twice as fast as Amazon’s own sales,” the spokesperson further added.
Google did not respond to CNBC’s request for comment.
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