Interesting. But I don't necessarily agree that all merchants are pissed off.

One merchant I bought from had a direct store and an Amazon store. The Amazon store price was higher (by about $1.50 on a $20-ish item), but I still ordered from Amazon because I expected the merchant to take care of Amazon customers better wrt shipping time etc. :)

As a buyer, given a choice I would rather order from the Amazon store than directly from a no-name merchant.

I think your e-commerce customers just need to raise their Amazon store prices.