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Coronavirus Pandemic Renders Small Businesses More Reliant on Digital E-Commerce Platforms Than Ever Before

Jericho Casper

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Screenshot of U.S. Rep. Yvette Clarke, D-New York

September 22, 2020 — The coronavirus pandemic has taken a dire toll on small businesses across the United States.

In an attempt to subsist, many small businesses have been forced to close their physical doors, and try their hand in the digital marketplace, utilizing opportunities offered by e-commerce platforms.

“Many have had to accelerate to digital platforms to stay valid,” said Rep. Kevin Hern, R-Oklahoma, speaking at a panel of lawmakers and small business owners discussing how to improve the digital economy. E-commerce platforms have been “paramount for the success of small business,” said Hern.

While it is technically true that e-commerce platforms have given small businesses the opportunity to compete and sell goods globally, these platforms, which boost the reputation of third-party sellers online, cannot be viewed completely as allies to small businesses. The panel was convened by The Hill.

While digital platforms attempt to pose as a “friend” to small business, many of their actions align more with “foe.”

In reality, small business panelists said they are forced to use platforms like Amazon. The e-commerce behemoth which receives half of all online sales.

Because of Amazon’s dominant position, they said, small business owners have no choice but to turn to it to reach new customer bases in a critical time of need.

Amazon’s control over e-commerce distribution the market strips small business owners of their say in matters and renders third-party sellers reliant on Amazon’s terms of service.

Amazon has used its dominant position in the industry to further its own growth and hamper the ability of small e-commerce businesses to compete, by undercutting the prices they offer.

Some instances of Amazon’s control over e-commerce distribution came to light during the House Judiciary Antitrust Subcommittee’s hearing of executives for big tech companies in July.

Amazon has used data collected on the third-party sellers that utilize their site against them, critics charge. Amazon uses this data for what has proven successful for third-party sellers to cherry-pick new products.

Amazon then cuts the prices they offer a product for, lower than the third-party competitors which operate on their site, these critics charge.

Lendio’s 2018 American Dream Survey of more than 2,000 small business owners found that many view Amazon as a threat to their business, with two out of three small business owners reporting that they view large corporations as having a negative impact on growth opportunities.

At the same time, Amazon aids small businesses’ ability to reach new markets.

Rep. Yvette Clarke, D-New York, called for facilitating a “healthy ecosystem for small businesses at each level of government,” urging that local, state, and federal government do everything in their power to help small businesses.

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