retail news in context, analysis with attitude

by Kevin Coupe

Reuters is reporting that Amazon is expanding the loans that it has been providing to third-party sellers on its site, doling out more than $1 billion over the past 12 months, as opposed to the $1.5 billion it loaned out between 2011 and 2015.

Peeyush Nahar, vice president for Amazon Marketplace, tells Reuters that the money is used buy the sellers to either expand their inventory or offer sharper discounts on their products.

More than 20,000 sellers have gotten the loans to this point, which have ranged between $1,000 and $750,000, at reported interest rates of between six and 14 percent (which is more than a mortgage rate and less than a credit card interest rate).

According to the story, the Eye-Opening piece of this is that a) "boosting sales for third-party merchants is lucrative for Amazon, which takes a cut of transactions on its site," and b) it keeps these sellers "close to Amazon's orbit," even a rivals Walmart and eBay look to expand their marketplace/third party vendor offerings.

In other words, the Amazon ecosystem is designed not just to keep customers close, but vendors potentially even closer.
KC's View: