It’s a rare day when I don’t see complaints about the fees Amazon and other platforms charge. And I understand, the cost of doing business online is becoming unsustainable for many SMBs.

Is the solution to emulate China’s e-commerce regulator and ask platforms to charge reasonable fees and better support small businesses?

Would that encourage people to start businesses and innovate, or would that create even more clutter on these marketplaces? Not to mention how complex this would be from a legal standpoint.

Ideally, we would be able to see new sales channels emerge, with more reasonable fees, that would allow SMBs to breathe. But network effects make it very difficult for new entrants to grow. And it looks like whenever a platform reaches a critical size (Amazon, Walmart, eBay…), it aligns its fee structure close to the ever-increasing industry standard. I am not saying there is price fixing among e-commerce giants, but this creates a very difficult environment for sellers.

What is the solution? At a large scale, I don’t know. At a smaller scale, it is more important than ever for businesses to create products and services that have healthy margins and don’t only rely on sales channels they don’t fully control.

China Calls for Reasonable Merchant Fees From eCommerce Platforms