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

Amazon to Cut Smaller Wholesale 1P Suppliers

Two months ago, Inc. halted orders from thousands of suppliers with no explanation. Panic ensued — until the orders quietly resumed weeks later, with Amazon suggesting the pause was part of a campaign to weed out counterfeit products. Suppliers breathed a sigh of relief.

Shippers Beware: New USPS Dimensional Pricing Coming June 23

The second phase of the United States Postal Service changes kicks in on June 23, 2019. USPS is changing the way it charges for boxes shipped via Priority Mail, Priority Mail Express as well as new international weight limitations. Currently, USPS applies a dimensional divisor (DIM) of 194 for boxes that exceed one cubic foot in volume, and DIM only applies to zones 5 and above. Starting June 23, 2019, the DIM divisor will be reduced to 166 and will apply to ALL zones (local and 1-9) for Priority Mail, Priority Mail Express and Parcel Select.

How Much is Free Shipping REALLY Costing You?

Gone are the days when you could actually make money on shipping. Merchants are all too willing to move to a free shipping model without being aware of the entire cost of shipping a package. If you’re offering free shipping, it’s probably costing you 30 percent MORE than you think. If you talk to many companies that offer free shipping and ask, “How can you afford this?” Their answer: “I work the cost of shipping into the product.”