On Thursday, Bloomberg reported that the e-commerce giant charged some toy companies "as much as $2 million" for placement on its annual holiday toy list, which was recently updated for the 2019 holidays. The list recommends more than 1,700 gift options for children, such as a Lego set of the "Quinjet" airplane from The Avengers to a voice-activated electronic Monopoly game.
Amazon's website doesn't appear to classify any of the items on this year's list as sponsored or advertised. "The list is thoughtfully curated to help shoppers quickly tackle even the lengthiest holiday shopping lists and find the perfect kids' gifts with just a few clicks," it reads.
The hefty price tag creates a near-impassable barrier for small vendors on Amazon's platform, and it comes at an extremely inconvenient time: Like many other retailers, toy makers rely heavily on the holiday season to hit their full-year sales goals.
Amazon sellers can, of course, buy ads for their products on the site for significantly less than $2 million--for example, Amazon offers a managed-service option for display ads for a minimum spend of $35,000--but placements aren't nearly as prominent, and shoppers can more clearly identify paid listings.
Amazon responded to Bloomberg with this statement:
Every product on our annual Holiday Toy List, which features family gift ideas from new releases to customer favorites, is independently curated by a team of in-house experts based on a high bar for quality, design, innovation and play experience. We source product ideas from many places, including our selling partners who have an opportunity to nominate their best toys for the season and increase visibility of those toys.
The news is the latest in a string of Amazon-related frustrations for small-business owners, including widespread problems with counterfeit products and a reported upcoming large-scale "vendor reduction" (which Amazon has vigorously denied). It's left many small vendors searching for ways to promote their products outside of Amazon's ecosystem, such as on e-commerce competitors like Walmart and eBay.
Still, listing products on multiple websites has led to problems for some sellers--again, courtesy of Amazon. In August, Bloomberg reported that the company was sending harsh warnings to vendors selling the same products for lower prices on other platforms, and effectively burying those products in Amazon searches.
"If you build a business on someone else's platform, you allow them to exert considerable control, since you have to be willing to put up with the rules and policies created by that platform," Inc.com columnist Jason Aten noted at the time. "Those rules could change at any time, and your only real option is to change your business or leave ... Pay close attention to those rules."