Amazon Helps Black Entrepreneurs Secure the Bag

  • More than 1 million U.S. small businesses sell products on Amazon
  • Half of all products sold on Amazon’s platform in 2017 were by small businesses

Amazon (AMZN -0.09%) released its Small Business Impact Report revealing 1 million U.S. small businesses sell products on its platform. The ecommerce giant has touted its support of small business as it faces increased scrutiny for the amount it pays in taxes and the impact it has on physical retailers. To what extent have black small businesses benefited from the platform?

Why This Matters: Some of the fastest growing black-owned businesses sell their products on Amazon’s platform. These include Mobile Defenders, a provider of cell phone repair parts that recorded $35 million in sales in 2016. Another company leveraging the Amazon platform is Active Faith Sports, a sports apparel business that booked $7.5 million in sales in 2016.

Other black-owned brands that have developed cult followings on Instagram sell their products on Amazon as well, including Brother Vellies, Bfyne, and Nubian Skin. Amazon earned 44% of the $450 billion in ecommerce sales recorded in 2017. The company makes it easy for independent retailers to sell on its platform. As a result, half of the items purchased on Amazon.com in 2017 were from small businesses and independent retailers.

Situational Awareness: Amazon is under pressure from U.S. states and the federal government to pay taxes similar to those paid by retailers that have physical locations. This pressure could impact small businesses and independent retailers because Amazon may pass those costs on if state regulators and the federal government succeed in getting more revenue from the conglomerate.

CBx Vibe: Bag” Tee Grizzley