Want to be an Amazon supplier? It could cost a piece of your company

Want to be an Amazon supplier? It could cost a piece of your company


Photo by Marco Bello / Anadolu Agency via Getty Images

Amazon demands that suppliers let it buy up to 30 percent of their company at a fixed rate often below market valuation, according to a Wall Street Journal report.

Amazon has added these kinds of stipulations to contracts with companies that supply it with aircraft, Amazon Fresh groceries, and call center services more than 75 times over the last 10 years, according to the Journal. Its potential equity in other firms is valued at nearly $3 billion, according to Amazon’s latest quarterly financial filings.

These kinds of deals are called warrants, and they function similarly to stock options granted to employees of a company. Amazon gets the option to buy its supplier’s stock at a certain price, set before the deal is announced. When…

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