Right now, Inflation is a major issue for everyone, including companies like Walmart and Amazon. Recently we learned that Walmart threatened to replace popular brands who tried to raise prices with generics. Now Amazon has announced plans to cut costs to help keep prices down.
According to Forbes, Amazon is cutting ties with EU distributors and will instead deal directly with brands to cut costs. Distributors act as a middle man for products allowing Amazon to buy products from multiple companies all through one supplier. Now Amazon has decided to deal directly with brands.
This move means extra work for Amazon, having to negotiate with multiple companies instead of one. The benefit is they cut out a layer between them and the brands, helping them save money. By saving money for Amazon, they can keep prices lower, allowing them to compete better with Walmart and other retailers.
This deal also gives Amazon greater control over its relationship with brands that sell on Amazon. Dealing directly could also speed up deliveries to Amazon but at the cost of more work for Amazon.
For the end consumer, you may not notice any major changes, but the hope for Amazon is that they will be able to keep prices down.