In this instance, Amazon is a traditional reseller, buying wholesale and selling it as a Prime item. It sounds like Amazon is telling the supplier what they're

In this instance, Amazon is a traditional reseller, buying wholesale and selling it as a Prime item. It sounds like Amazon is telling the supplier what they're willing to pay for the item wholesale (the same price they're currently paying) and the supplier is unable or unwilling to meet that. OP is framing this like it's wholly Amazon's fault and not just a common failed negotiation.