They are though, but in a different way. Because Amazon has all the sales data, they have been known to identify high volume items offered by their partners and either knock them off or go directly to the source and negotiate a better cost. Then they sell the items on their site as sold by Amazon and undercut their partners.
This is the answer.
I work in a sailing specialty shop and I’ve seen this happen again and again. We sold on amazon a few years ago and pulled about everything out of there when we realized we were trying to compete for the buy box against amazon itself. There’s no point in it. First you have to sell as low as you can / are allowed to get the buy box, then Amazon takes a 15% cut, and you have to pay shipping just to get the item to the shop, then ship it to the customer for free to match amazon. What was supposed to be a 40% margin quickly disappears to just making a few dollars just to sell one thing. The return isn’t enough to support a specialty shop.
Amazon identifies the top selling items, then goes to manufacturers and places a big order / uses their clout to become a dealer with maximized margins. No single small shop can place an order large enough to get the amazon negotiated rate. Once amazon can sell direct, their algorithm ensures they’re always in the top spot. Add in free shipping, and often prices so low that a) nobody can compete or b) prices so low that anyone trying to compete would violate the manufacturer’s MAP policy. A small dealer who violates MAP enough can expect to lose the dealership.
Try reporting amazon for a MAP violation to a manufacturer, it never works. Amazon sweeps it under the rug and blames the algorithm like they have no control over it. Even my sales reps are upset when amazon becomes a dealer because they know that’s lost commission they would have made from dealer sales in their territory.
It’s gotten to the point that I personally refuse to shop on amazon. They are the death of small business in the US.
When APS went to all soft good last year many people in the industry tried to figure out why they would do that and this is the result many saw coming. Soft goods are way too over saturated in the market.