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Nov 20, 2023

Small merchants finding it hard to compete with multi-nationals

Small businesses are already struggling to compete in an e-commerce space dominated by large multinationals, and some of the business practices by Amazon on its Marketplace platform are exacerbating the problem, says a report by the Canadian Federation of Independent Business (CFIB). This situation may worsen during the upcoming holiday shopping season as a majority of Canadians report doing the bulk of their shopping at large multinational retailers, either in-store or online. 

"E-commerce offers a lot of opportunity for small businesses to expand and reach more customers, but they're facing an uphill battle trying to compete with online giants. Many small businesses looking to get a foothold online will sign up for Amazon's Marketplace but a number of them report that Amazon's business practices can make it more challenging for them to compete," says Corinne Pohlmann, executive vice-president of advocacy at CFIB. 

About one in two (55 percent) of the small businesses that have used Amazon's Marketplace were dissatisfied with their experience. Top complaints ranged from small businesses experiencing confusing fees for accessing the platform to Amazon providing little customer support. 

CFIB says the government should do more, including: 

  • Use the ongoing Competition Act review to stand up for Canada's small businesses against behaviour that could be seen as unfair or even anti-competitive 

  • Make programs such as the Canada Digital Adoption Program (CDAP) more accessible to help small businesses with their digital transformation 

  • Implement policies that will reduce the heavier regulatory burden placed on small businesses to help level the playing field 

  • Work with Canada Post to provide small businesses with more pricing options for shipping costs so that they can better compete within the digital economy 

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