Business

A Recent eport Alleges that Amazon has Awarded both “Small Business” and “Black-Owned Business” Badges to Companies that did not Qualify for the Designations

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Amazon, the world’s largest online retailer, has come under fire for its use of small business and Black-owned badges to label products sold by third-party sellers. It has been accused of mislabeling non-qualifying US companies as “Small Business,” with fewer than 100 employees or less than $50 million in revenue, along with allegedly awarding Black-Owned Business badges to products from non-Black owned companies.

According to The Information’s investigation, Amazon has been labeling an untold number of third-party merchants. This practice raises questions about whether Amazon is using its size, customer base and levers to give some merchants bigger boosts than others. These type of digital badges are shown alongside merchants or products to tell Amazon’s customers of special attributes, such as a “Top Brand” or “Amazon’s Choice”.

The retailer, which boasts more than 2.5 million sellers worldwide, has been criticized for its use of the badges, with some accusing it of harming local commerce. Jason Boyce, CEO of Avenue7Media, a start-up designed to help people sell on Amazon, called the practice “fishy,” and Rabbi Yael Buechler, a small business owner also expressed concerns that her products were overshadowed on the platform.

Adding to the fervour, studies have shown that digital badges can increase product downloads by 64%. However, Amazon’s intentions concerning the badge programs are up for debate. Critics argue that Amazon’s misuse of the badges can harm local businesses and make it difficult for consumers to find the products they need.

The use of small business badges has come under intense scrutiny as Amazon has been accused of harming small businesses in the past. Critics believe that these badges give an unfair advantage to larger companies that can quickly adhere to the requirements for the badge.

In response to the allegations, Amazon has stated that it is reviewing its badge programs to ensure that they are being used appropriately. The company has pledged to remove any non-qualifying companies from its Small Business program as it acknowledges its importance in supporting small businesses.

However, critics argue that the review will achieve little if Amazon continues to prioritize the sale of products from its best-selling brands and increases promotional fees that third-party merchants pay to compete on its platform.

As Amazon continues to face widespread scrutiny over its business practices, it remains to be seen whether the company will take meaningful action to address these concerns. For now, small business owners and consumers alike will need to remain vigilant to ensure that Amazon is operating fairly and transparently.

Whilst Amazon has had a considerable competitive advantage for many years, new research shows that consumer loyalty is dipping, and customers are more open to buying from its competitors. This polling suggests there is growing awareness among consumers of how Amazon operates, with data privacy and mislabeling third-party goods the most significant areas of concern.

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