Amazon casts itself as friend, not foe, of small businesses

[SEATTLE] Amazon.com Inc., seeking to portray itself as a job creator fueling small-business innovation rather than an out-of-control corporate beast that needs to be tamed, said it helped mom-and-pop companies create 1.6 million jobs in 2018, up from 900,000 the year before.

The company released a report Tuesday, during National Small Business Week, for circulation to elected officials as part of a charm offensive aimed at steering the conversation away from its e-commerce dominance and the damage it's inflicted on competition. Almost 2 million small businesses partner with Amazon, including authors who get royalties on book sales, merchants that sell products on its website and engineers who build for the Alexa voice-activated platform, according to the report.

"Amazon is inspired by the type of courage and inventiveness that makes entrepreneurs tick," Jeff Wilke, Amazon's retail chief, said in the report.

Still, the company's message is likely to be a tough sell in Washington and US state capitals. Amazon will capture nearly half of the US$600 billion US shoppers spend online this year, according to EMarketer Inc. Chief Executive Officer Jeff Bezos has become the world's wealthiest man, making his company a target for a variety of social movements decrying income inequality and the outsized power of tech platforms. Senator and Democratic presidential hopeful Elizabeth Warren has promised to break up giants like Amazon, and labor protests led the company to cancel a planned new headquarters location in New York City.

In California, legislation introduced last month by a Berkeley state assemblywoman seeks to impose new restrictions on how Amazon operates its online store. If Buffy Wicks, once nicknamed "Buffy the Walmart Slayer," has her way, the bill will help push a national conversation about Amazon. The bill would restrict the use of consumer data by large e-commerce platforms like Amazon for marketing and other purposes. It would also impose terms on Amazon when the company withholds funds from merchant partners during disputes.

The bill is "first-in-the-nation legislation to guarantee a baseline of fairness for small businesses using e-commerce marketplaces to sell their products," said Wicks, who previously worked on community organizing campaigns critical of retail giant Walmart Inc. for paying employees low wages. "These sites have a responsibility to ensure small businesses know and understand the policies that govern their contractual relationship."

Amazon's 12-page report goes into detail about the small businesses it is helping to underscore the company's impact beyond retail-industry disruption such as stores closures and layoffs. It features photos and anecdotes of merchants who sell baby products, jewelry and home décor on the site; a man in Denver who hired 40 people to start his own business delivering Amazon packages; and a Seattle entrepreneur who received an investment from Amazon's Alexa Fund to develop tools used in voice-activated software. The report says Amazon has invested tens of billions of dollars in technology and tools that help small businesses succeed and provided more than US$1 billion in loans to businesses in 2018.

Bezos last month argued in a letter to shareholders that the company's growth benefited independent merchants who sell more than half of the goods people buy on the site.

BLOOMBERG