For Prime 1-Day Shipping, Amazon Wants Sellers to Send It More Stuff

Amazon is offering steep discounts of up to 75% on warehouse storage fees to incentivize merchants to store more of their popular products with the company, in an effort to facilitate its transition to a one-day shipping standard for Prime members, according to CNET.

The promotion will begin in June and run through January; to qualify, sellers will need to have sold 60 or more of a product per month or have products specifically selected by Amazon. They’ll also have to keep the level of inventory they supply to Amazon at a certain level. 

Here’s what it means: The push for one-day free shipping can’t be a unilateral move by Amazon: It’ll need sellers to work with it. 

One-day shipping is likely feasible for Amazon, but more than half its sales come from third-party sellers, making them critical to achieving this new goal. Third-party merchants were responsible for 58% of Amazon’s sales in 2018, an enormous jump from 3% in 1999. 

Because of this, if Amazon wants to have any chance of making the lion’s share of the items on its marketplace available for one-day delivery, it’ll need help from those sellers. It shouldn’t be too difficult to get them on board, though, given that one-day shipping is likely to increase consumers’ enthusiasm for Amazon, leading to more sales for the sellers working with it. 

The bigger picture: Amazon’s one-day shipping goal will highlight the importance of its relationship with sellers (both FBA and FBM doing their own ecommerce order fulfillment) as well as the fine-grain control it has over its private-label products. 

Read the full article here.

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