Amazon is not alone in holding sellers' money. Rival eBay does the same thing, and Internet giant Google is known to ban advertisers without explanation.
In 2010, eBay sellers whose accounts were frozen filed a class-action lawsuit in Northern California, accusing payments processor and eBay subsidiary PayPal of breach of contract and unjust enrichment. But U.S. District Judge Jeremy Fogel ruled that PayPal's pact with sellers gave it broad discretion to freeze accounts without disclosing the reasons.
"You're talking about a black box," said plaintiff's lawyer Jeff Leon.
"You have people whose money is being held for no other reason than their behavior fell within a certain profile."
While Amazon sells many products itself, it relies on thousands of small merchants to expand its selection of everything from books and electronics to hardware and jewelry.
When customers buy from a third-party seller, Amazon processes their credit-card payments, then takes a cut of between 6 and 25 percent, depending on the product.
Experts say this enables Amazon to try out new product categories without the risk of surplus stock, shifting the financial burden to other sellers.
Amazon reported last month that third parties represented 41 percent of all goods sold on its site, up from 32 percent two years ago. Forrester Research estimates third parties generated about 9 percent of Amazon's $48 billion in revenue last year.
But relations between Amazon and its sellers long have been charged. Michael Harvey, chief operating officer of e-commerce-solutions company CorraTech, calls it a "sheep lying down with the lion" scenario.
"We have clients who do as much as 40 percent of their business through Amazon, and yet they hate it," he said. "Their margins are lower because Amazon takes a cut, and Amazon knows all their market intelligence."
In 2001, the now-defunct electronics chain Circuit City began selling through Amazon's marketplace. But it severed ties in 2005 to concentrate on its own website.
"As soon as we could get out of the deal, we did. The marketplace is an R&D facility for Amazon, where they look to see what's selling and then sell it directly," said former Circuit City executive Fiona Dias.
"If you look at the marketplace today, it's a bunch of little moms and pops with no marketing budget and no power. Amazon competes with them because it can," said Dias, chief strategy officer at ShopRunner.com, a members-only shopping service.
To many, Amazon's Web platform looks like an opportunity too good to pass up, boasting some 80 million unique monthly visitors at Amazon.com, more counting all of the company's sites. Listing products is both cheap and easy, says Sucharita Mulpuru, an e-commerce analyst with Forrester Research.
"It's a Faustian bargain," she said. "The trade-off is you have all these onerous terms over how you get paid and concerns about whether they're going to steal your data."
Left to wonder
Although Amazon aims to be "Earth's most customer-centric company," it can seem ambivalent about its sellers.
Marge Belfry, a married mother of five in Mukilteo, last spring decided to sell scrapbook supplies on Amazon to supplement her family's income. Within three weeks, she had boxed and shipped $2,200 in online orders.
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