WASHINGTON, D.C. (December 1, 2021) — Amazon has exploited its power as a monopoly gatekeeper to impose increasingly steep fees on the independent businesses that sell on its site, according to Amazon’s Toll Road, a new report from the Institute for Local Self-Reliance (ILSR). Seller fees are Amazon’s fastest growing revenue source, and they generate more profit than Amazon Web Services (AWS), the report finds.
Amazon now pockets a 34 percent cut of the revenue earned by independent sellers on its site, up from 19 percent in 2014, the report finds. In just two years, Amazon’s take from sellers has more than doubled, soaring from $60 billion in 2019 to a staggering $121 billion this year.
While these fees are bankrupting sellers, they’re a major source of profit for Amazon, even bigger than AWS, ILSR concludes. Amazon has repeatedly declined to disclose the profitability of seller fees, but ILSR estimates that Marketplace generated roughly $24 billion in profit in 2020, compared to $13.5 billion from AWS.
“Operating an unregulated, monopoly tollbooth that sits between businesses and their customers is wildly lucrative,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance and author of the report. “The extraordinary amount of money Amazon is able to extract from these businesses is a striking illustration of its gatekeeper power and the high costs that come with it.”