Comment by throwaway803453
5 years ago
The concern is that Amazon may just drop smaller sellers since they would not be collectable if Amazon had to sue them in turn for damages. It perhaps may also make lawsuits more common since the bar of frivolity gets lowered if a lawyer knows the defendant has deep pockets.
>The concern is that Amazon may just drop smaller sellers since they would not be collectable
This is the hard part with business. If you make a product, you are responsible for it. If you sell a product, you are responsible for it. If I sell a dangerously defective used lawn mower at a garage sale, I'm responsible (yes hard to prove).
One of the dangers of too much growth is that your liability can out run your profits in a way that puts the whole business at risk. Historically, it was hard to make a new product and get it on the shelf... retailers required certification by a consumer products testing lab and would have to have indemnification AND proof of insurance where the retailer was a named beneficiary. Even though all of this is likely in the fine print at Amazon, one has to wonder if it is verified and audited.
I guess it depends on what is "too small to justify the risk", but I have a strong suspicion Amazon is not in the position to drop any significant number of 3rd party sellers, since these sellers drive something around half of Amazon's retail revenue. Perhaps if very few drive most of that revenue - then it might be the case where Amazon drops smaller sellers. But from where I look at it - most of 3rd party sellers are just small scale operations.
This is ok in my book it forces small sellers to other platforms and consumers to chase them there too.