Amazon (AMZN) will stop placing bulk orders with thousands of small suppliers over the next few months, Bloomberg reported on Monday, citing three sources familiar with the company’s plans.
Amazon is looking to cut costs and focus wholesale purchases from major brands such as Procter & Gamble (PG), Sony (SNE), and Lego, the sources said. This will ensure that the company has adequate supplies for must-have merchandise, allowing it better compete with rivals Walmart (WMT), Target (TGT), and Best Buy (BBY).
The mom-and-pop stores that have relied on Amazon for bulk orders now have to settle into a new way of doing business on the online store, selling directly to shoppers.
According to the sources, Amazon’s plan is currently moving forward, though it may be changed or cancelled.
“We review our selling partner relationships on an individual basis as part of our normal course of business, and any speculation of a large scale reduction of vendors is incorrect,” said an Amazon spokeswoman in an emailed statement to Bloomberg.