New York Congresswoman Challenges Amazon’s Plan To Cease Wholesale Orders from Small Vendors

One of Amazon’s key public relations strategies -- selling itself as a friend of small businesses -- could unravel if lawmakers decide that it wields too much power in negotiating terms with partners.

New York Congresswoman Challenges Amazon’s Plan To Cease Wholesale Orders from Small Vendors

By Spencer Soper (Bloomberg)

An influential New York Democrat has written to Inc. asking about a report that the company plans to cease wholesale orders from thousands of smaller suppliers.

U.S. Representative Nydia Velazquez, chairwoman of the House Committee on Small Business, wrote to Amazon Chief Executive Officer Jeff Bezos asking about the nature of his company’s relationship with small suppliers, whether changes are planned and how much advance notice and support Amazon is giving to businesses that would be affected.

Her letter is the latest example of the government’s growing interest in potentially curbing the power of big tech companies

“At a time when many larger companies have overlooked the potential of small firms, I applaud Amazon for inviting small businesses to be wholesale suppliers,” Velazquez said in her letter, which asks Bezos to respond to her questions by June 21. “I believe that any erosion of your commitment to small firms would be a serious mistake.”

Bloomberg last week reported that Amazon was planning to stop placing bulk orders with thousands of smaller suppliers, a move that would reduce the company’s costs and boost profits. Amazon disputed the report, saying no “large scale” reduction in vendors was planned and that it regularly reviews its supplier relationships on an individual basis. Velazquez cited the story in her letter, seeking clarity from Amazon about its plans. Amazon spooked suppliers in March when it ceased routine orders from many suppliers without explanation, only to resume weeks later.

“As Chairwoman of the House Small Business Committee, I find these reports deeply troubling as this change could jeopardize small wholesale businesses from continuing to do business with Amazon and affect millions in sales and hundreds of thousands of jobs,” she wrote.

Read more: Amazon Pressed by Key N.Y. Democrat Over Plans for Small Vendors

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