Report: Amazon Misrepresented Small Business and Black-Owned Business Badges

As reported recently by The Information, Amazon has reportedly mis-categorized businesses selling on its site, dubbing them as “Small” and “Black-Owned” when they were in fact neither. Amazon gave “Small Business” badges to sellers that have more than 100 employees plus $50 million in revenue, while its “Black-Owned Small Business” badges were given to companies that weren’t actually Black-owned at all. Amazon has been criticized for its mislabeling, as it could potentially detract from its intended purpose of boosting sales for small business and companies owned by Black founders.

One company that received the “Black-Owned Small Business” badge despite its founders being non-Black is Chomps, a grass-fed beef jerky producer. Despite having been given the badge, Chomps cofounder Pete Maldonado said that their sales from the badge were lacking. As of the start of 2021, Chomps has already exceeded $200 million in retail sales.

Amazon CEO Jeff Bezos has been lauded for his dedication to small business. Its resources for them on its Sellers Portal, such as the badges, are part of its commitment to helping seller succeed on the e-commerce giant. It will be interesting to see if this mislabeling will lead them to change the badge system or fix its algorithms to get more accurate data.

What’s also important to note is that Amazon’s massive hold over the American customers is harmful to small businesses; resources like next-day shipping on Amazon Prime and its cutting-edge customer service have made it harder for small businesses to compete. Cutting back on fees to reduce the burden on the businesses or introducing more incentives might just be the answer.

Amazon has not yet responded to the report or insider’s request for comment, suggesting they are still formulating their response. It is possible they are going to change the badges in order to encourage more accurate data. Whatever their response, it will be interesting to see how it affects small business and Black-owned businesses on Amazon.