This summer, POKS Spices announced a somber business update on Instagram: After nine years of building a dedicated following on its own website, the West African seasoning company had decided to shift all product sales to Amazon. The choice is one many small entrepreneurs must make to surviveâeither stake their entire future on the e-commerce giant or shut down entirely. To the average consumer, converging with the worldâs most prominent marketplace may not seem dire, but its anticompetitive practices can be especially brutal on these sellers.
For POKS, this decision was a long time coming. As one representative of the company, who asked to remain anonymous, told me in a video call, the team first saw a âhuge reductionâ in traffic to its website in October 2024. In times of economic anxiety, customers often tighten non-essential spending. Sales of its three seasoningsâJollof Rice, Green Chili, and Red Chiliâdropped down to âa trickle here and a trickle thereâ just four months later. At the same time, though, a âsteady stream of purchasesâ continued to flow through Amazon.
POKS founder Abena Foli reached out to fellow entrepreneur friends to find out if this was just a technical glitch or an issue across the Consumer Packaged Goods (CPG) industry. Sure enough, her peers reported the same âsignificant decline,â forcing the team at POKS to face âthe reality of the CPG industry right now.â Relying solely on Amazonâs admittedly massive reach would be both a lifeline and a painful concession.
Why exactly is the deal so punishing? While Amazon sales may be enough to stay afloat, placing all its seasonings into one virtual storefront can hamstring a fledgling business in the long term. According to the POKS representative, despite listing products at higher prices compared to a brandâs website or even a brick-and-mortar location, âAmazon in itself eats into your margins.â They say that between warehousing, listing, distribution, and many other fees, Amazon ends up collecting 40% of every POKS saleâa $7 cut for every $17 bottle of seasoningâand even more for âslower moving itemsâ that rack up fees for occupying warehouse space.
âHidden costsâ are another widespread concern for Amazon sellers, explained Hunter Owen White, co-founder of Cherrystone Food Group, a consultant company advising emerging food and beverage brands in the US. âThere are entire companies that are designed to help you get fewer deductions because thereâs such a big problem.â Early or late shipments, product shortages, and spoiled or damaged items are just a few of the most common deductions that eat away at profits.
