Tuesday, February 20, 2024
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Amazon makes changes that third-party sellers don't like

Like Amazon (AMZN) needs to be easier and faster than ever.

In the days before Amazon was our place for everything from household items to clothing, mail shopping (as it was called going back in time) meant you would have to wait a week or more Up to several months, depending on the shipping service used by the retailer.

But then came February 2005, and at $79 a year that now sounds like a bargain, Amazon will bring a variety of gadgets to your home in two days kind of thing. It sounds like a crazy proposition – how could they do it? But somehow, Amazon did it.

Today, not only does two-day shipping still work, but Amazon also offers same-day shipping in many regions for a small fee (or, if you spend enough, free ), you shake your head in disbelief when you open from your laptop an item you ordered just two hours ago.

The power of Amazon’s fulfillment service comes in handy for many third-party sellers who need the service of delivering items to customers. But now, those sellers will have to dig deeper into their pockets to afford Amazon’s brisk service.

What has Amazon changed about fulfillment services?

On August 16, Amazon posted an announcement on its Seller Central forum to inform its users that a holiday price hike is coming.

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“Over the years, we’ve continued to improve the way we charge fulfillment fees to better reflect potential operating costs, while ensuring we offer sellers great Value. As we look ahead and prepare for the busy holiday shopping season, we expect greater utilization of our fulfillment network. Across the supply chain, this will increase operating costs during this holiday peak,” the announcement reads.

“Therefore, similar to other major carriers, we will be introducing peak holiday shipping fees from October 15, 2022 to January y April 2023. Using the US and Canada The average fee per item sold on FBA is $0.35.”

35 cents per item doesn’t sound like a big deal at first. But when you consider that Amazon has over 1.9 million selling partners worldwide, or that Amazon Business (B2B e-commerce channel) serves over 150,000 sellers, it’s easy to see how a seemingly small surcharge can add up quickly .

However, holiday surcharges are nothing new. UPS (UPS) and FedEx (FEDEX) These fees are charged every year as the number of packages rises to a huge percentage. By 2021, the USPS estimates that 850 to 950 million packages will be delivered, and that number is expected to continue to rise in the future.

Additional charges may also be due to offset the drop in demand. Net sales at Amazon’s online store fell 4% year over year, a no-brainer of recession.

“Our sales partners are very important to us and this was not a decision we took lightly,” the announcement said. “The industry as a whole is seeing increased fulfillment and logistics costs during the peak holiday season due to the concentration of shipments. We have absorbed these cost increases before, but seasonal charges have reached new heights. Therefore, we have decided to work with other similar carriers, We will implement peak holiday fulfillment fees at certain times of the year.”



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