ReportJanuary 25 2023

Amazon’s Trickle-Down Monopoly

Third Party Sellers and the Transformation of Small Businesses

Moira Weigel

In this report, Moira Weigel tells the story of a group of hidden intermediaries who have played key roles in making Amazon one of the most powerful corporations in the world, while remaining mostly invisible to customers: third-party (3P) sellers.

Critics of Amazon’s monopoly have often emphasized how the company eliminates competition. This report highlights how Amazon’s scale has also given rise to new kinds of small businesses — ones optimized for Amazon. Industry analysts estimate that, in 2021, there were more than 6 million unique sellers active on Amazon and that at least 2,000 new sellers opened accounts every day.* To these sellers, Amazon holds forth the possibility of a trickle-down monopoly. But to seize the opportunities of Amazon’s global expansion involves considerable vulnerability. To succeed, 3P sellers must behave like miniature Amazons — without access to the capital that Amazon commands, insight into much of the company’s data, or the ability to make claims when they suffer harm.

Weigel establishes a typology and chronology of Amazon sellers, and explores the ambivalent realities of building a “small business” under the conditions that Amazon has created and controls. She argues that Amazon’s dominance of online search and global logistics has not (only) hurt or helped small businesses so much as transformed them. Drawing on hundreds of hours of interviews with sellers in North America, China, and Southeast Asia, Weigel reveals how Amazon’s platform has restructured the social relations that comprise the global retail industry and set new rules for conducting business.

Amazon’s Trickle-Down Monopoly shows that it is by eliciting and constraining the agency of small business owners — rather than simply eliminating them — that Amazon has gained its power over global retail. In the process, countless small businesses across the world have made themselves in Amazon’s image. Given the long-standing economic and ideological supports for small business in the United States and beyond, and the changes that Amazon continues to enact for 3P sellers, the question remains: just how much time, value, resources, subsidies, profits, and loyalty does this transformation allow Amazon to claim as their own?

*Kaziukėnas 2021


Suggested Citation: Weigel, Moira. Amazon’s Trickle-Down Monopoly: Third-Party Sellers and the Transformation of Small Business. New York: Data & Society Research Institute, 2023.