FSB: Reform needed as issues with e-commerce are harming small businesses
The Federation of Small Businesses (FSB) is calling for reform as new research suggests small businesses are facing an abundance of online marketplace challenges.
The research, which surveyed 1,054 small businesses, showed 53 per cent of participants currently use an online platform for their business, with 71 per cent calling these “very important.”
Yet 39 per cent said there are often issues that are difficult to resolve.
A total of 12 per cent who have used an online platform in the past year reported “fake” or “malicious” reviews; 16 per cent reported delayed payments from Amazon; and 24 per cent experienced “de-ranking” or being “delisted” when a similar product surfaced.
The Competition and Markets Authority (CMA) was directly called upon by the FSB to “investigate the charging structures of retail platforms, and the charging levels of accommodation and food delivery platforms, to determine whether these are indicative of monopolistic or oligopolistic behaviour.”
A spokesperson for Amazon said: “We are always listening to feedback from our sellers, most of which are small and medium sized businesses, and we disagree with many of the findings and recommendations made in this report.
“This small survey of 81 businesses does not accurately represent the experiences of more than 100,000 UK based-sellers on Amazon. The success of small businesses is vital to Amazon, with independent sellers making up more than half of UK sales.
“Simply put, when our sellers succeed, so do we, which is why we work hard to build a great experience and invest heavily in tools and services to help them grow.”
A CMA spokesperson said: “Ensuring businesses can compete on a level playing field and consumers get the best deal is at the heart of our work.
“In recent years, we secured a major overhaul to the sales practices used by hotel booking sites and, earlier this year, Amazon offered commitments to improve the way it treats third-party sellers who use its marketplace to advertise products, following a CMA investigation.”
The government was also called upon to make online fake and malicious reviews an offence and to introduce a “rapid, effective and affordable dispute resolution procedure.”
A Department for Business and Trade spokesperson said the department is “cracking down” on false reviews to protect small businesses and consumers.
“We also know late payments are a massive issue for small businesses and a barrier to growth. We’re strengthening payment reporting regulations and taking robust action to address this problem and boost the economy by £2.5bn each year,” they added.