FYI - Amazon is a huge driver of small businesses. More than 50% of all the revenue from their whole e-commerce business is from 3rd party sellers, who are generally small operators.
In the short term that can mean a boon for small business as large competitors to Amazon are undermined. In fact, Amazon uses small sellers to do the undermining. Once everyone in a market segment essentially works for Amazon then they are free to tighten down the screws and extract more profits.
If I can get an item cheaper from the seller directly, assuming paying them securely is not a problem and shipping costs stay constant, of course I'll switch to buying from the seller's website directly.
Unless if the seller's website is harder to use or their business/domain is name not that memorable/trustworthy.
Just try buying batteries on Amazon. You'll wade through countless reviews claiming "counterfeit" before tiring and just buying some batteries that you hope are legit. Or driving to an actual store that you trust sells legit items on its shelves.
3rd party sellers are going to be a pain in Amazon's ass and a massive ding to their reputation if they don't fix it soon.