Sources: Amazon will stop ordering from thousands of small suppliers in the next few months, focusing on wholesale purchases from major brands like P&G and Lego
- Thousands of mom-and-pops will lose bulk orders from company — Big brands like P&G and Lego will be immune from the changes
Context & Ripple Effects
This is the second wave of a purge that began earlier this year, when Amazon abruptly stopped buying from thousands of wholesale vendors and told them to sell direct on its marketplace instead. The difference now is who benefits: rather than just cutting vendors, Amazon is consolidating its first-party purchasing around major brands like P&G and Lego.
That tilt toward big suppliers fits a pattern already visible elsewhere — since late 2018, Amazon has been limiting how popular brands can sell independently on its Marketplace, tightening its grip on which channel each seller gets. The vendor cuts also foreshadow the cost discipline behind Amazon's later retreats, including its reduced white-label selection amid weak sales and regulatory pressure.
First-order effects
- Thousands of small 'mom-and-pop' wholesale vendors lose their bulk purchase orders from Amazon within months, with the marketplace as their only remaining route to Amazon customers.
- Big brands like P&G and Lego become the privileged counterparties for Amazon's first-party retail, immune from the culling.
Second-order effects
- Pushed-off vendors must compete directly with those same major brands on the marketplace, where Amazon already constrains independent selling by popular brands — concentrating shelf space further around large suppliers.
- With fewer, bigger wholesale accounts, pricing and terms power tilts toward P&G- and Lego-scale manufacturers, squeezing margins for mid-size brands trying to keep first-party distribution.
Third-order effects
- If the pattern holds, Amazon's retail supply base consolidates structurally into two tiers — major-brand wholesale plus an open marketplace — making it harder for small manufacturers to reach scale through Amazon at all, a shift regulators scrutinizing Amazon's treatment of sellers are likely to weigh.
The trend: Amazon is restructuring retail procurement away from a long tail of small wholesale vendors toward concentrated deals with major consumer brands, using the marketplace as the overflow valve.