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 as well as the fine-grain control it has over its private-label products. 

Read the full article here.

Share on facebook
Share on google
Share on twitter
Share on linkedin

Recent Blog Posts

How to Make Free Shipping Profitable: The Ultimate Guide

Free and fast shipping is the name of the game now. It is a must-have for any seller wanting to get ahead of the pack not only on Amazon but also on other platforms. While shipping may be free for the customer, you’re still paying for it and it’s creeping into your margins. Here at Cahoot, we have created THE ultimate guide to profitable free shipping. You’ll learn every known and proven way you can offer free shipping profitably.

Is Amazon Responsible for the Sales by Third-Party Sellers?

Technology platforms govern consumer experience in a huge way. Users simply come to the platform, search for what they want, and start using it. Behind this consumer behavior, is the implicit trust in the platform that its users will act in the best interest of other customers. Apple’s App Store, Amazon’s Marketplace and Mastercard’s payment services are some examples.

The Growing Threat from Sellers based in China and How to Combat it

With the economic liberalization under Deng Xiaoping, China unleashed its manufacturing prowess over the world. For years the sourcing for goods sold in the US has been dominated by suppliers and manufacturers from China. The supply chain generally involves a distributor from China, US based wholesaler and finally a retailer in the US.