By Stacy MitchellDecember 2021Amazon’s Toll Road How the Tech Giant Funds Its Monopoly Empire by Exploiting Small Businesses
2Amazon’s Toll RoadWWW.ILSR.ORGAbout the Institute for Local Self-RelianceThe Institute for Local Self-Reliance (ILSR) is a national research and advocacy organization that partners with allies across the country to build an American economy driven by local priorities and accountable to people and the planet. Whether it’s fighting back against the outsize power of monopolies like Amazon, ensuring high-quality locally driven broadband service for all, or advocating to keep local renewable energy in the community that produced it, ILSR advocates for solutions that harness the power of citizens and communities. More at www.ilsr.org.About the AuthorStacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and analysis, and partners with a broad range of allies to design and implement policies to reverse corporate concentration and strengthen local economies. She’s written several influential reports and articles about Amazon’s power. Find her on Twitter @stacyfmitchell.AcknowledgmentsMany thanks to Ron Knox for research help and thoughtful feedback. Thanks also to Susan Holmberg for shepherding this along, and to Katy Milani, Hal Singer, and Kennedy Smith for their comments on the draft. And, finally, I’m grateful to the many independent retailers, product-makers, and online sellers who have shared their experiences with me and informed this analysis.For monthly updates on our work, sign up for the Hometown Advantage Bulletin: http://hometownadvantage.orgThis report is licensed under a Creative Commons license. You are free to replicate and distribute it, as long as you attribute it to ILSR and do not use it for commercial purposes.
3Amazon’s Toll RoadWWW.ILSR.ORGTable of ContentsKey Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Introduction & Executive Summary . . . . . . . . . . . 5PART ONEHow Amazon Price-Gouges Sellers . . . . . . . . . . 10Amazon’s Baseline Toll: Referral Fees . . . . . . . . . . . . . . . . . . . . . .11Demanding a Bigger Cut: Advertising . . . . . . . . . . . . . . . . . . . . .11Building a Logistics Empire: Fulfillment Fees . . . . . . . . . . . . . . .12Blocking Competition and Driving Up Consumer Prices . . . . .14PART TWO Seller Fees are the Linchpin in Amazon’sMonopolization Strategy . . . . . . . . . . . . . . . . . . . 15Marketplace is Likely a Bigger Source of Profit than AWS . . . .16How Seller Fees Spin Amazon’s Monopoly Flywheel . . . . . . . . .19Sellers Fund Amazon’s Expansion into New Markets . . . . . . . . .19CONCLUSION How Lawmakers Must Respond . . . . . . . . . . . . . 21Notes . . . . ....
