Report: Amazon Mislabels Huge Corporations as Small or Black-Owned Businesses

A recent report cliams that Amazon’s controversial badges that were intended to boost sales for small and black-owned businesses were reportedly assigned to many businesses that are neither.

Business Insider reports that Amazon misclassified several large corporations as “small” and “black-owned” businesses on its platform, according to a recent report by the Information. The e-commerce giant granted “Small Business” badges to multinational corporations with thousands of employees and “Black-Owned Small Business” badges to companies not owned by Black entrepreneurs.

ROMEOVILLE, IL – AUGUST 01: Workers pack and ship customer orders at the 750,000-square-foot Amazon fulfillment center on August 1, 2017 in Romeoville, Illinois. On August 2, Amazon will be holding job fairs at several fulfillment centers around the country, including the Romeoville facility, in an attempt to hire more than 50,000 workers. (Photo by Scott Olson/Getty Images)

The Information found that Amazon gave badges intended for small US businesses with fewer than 100 employees and less than $50 million in revenue to companies like Black Rifle Coffee Co., which generated over $300 million in revenue in 2022, and SwissGear, a subsidiary of knife manufacturer Victorinox that made $446 million in revenue as of December 2021.

When The Information reached out for comment, Amazon removed some of the badges but did not immediately respond to requests for further clarification.

Jason Boyce, CEO of Avenue7Media, which helps companies sell on Amazon, commented on the issue: “If they’re not managing this program, they’re being negligent and they’re disadvantaging true small businesses. And they’re giving companies that don’t need the help an unfair advantage.”

Despite the badges’ intended purpose, Chomps co-founder Pete Maldonado revealed that his company did not experience a significant increase in sales from the badge program. This brings into question the efficacy of Amazon’s badge programs and whether they genuinely support small and black-owned businesses or simply serve to boost Amazon’s own bottom line.

Stacey Mitchell, co-director of the Institute for Local Self-Reliance and an outspoken Amazon critic, expressed her concerns: “It’s very much in Amazon’s interest to try to suggest that in fact they’re supporting small businesses rather than eating their lunch.”

These findings highlight the challenges small business owners face when selling on Amazon’s platform, as mismanagement of the badge program could potentially undermine their opportunities and give larger corporations an unfair advantage.