Amazon to Cut Smaller Wholesale 1P Suppliers
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Two months ago, Amazon.com 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.
Now a larger, more permanent purge is coming that will upend the relationship between the world’s largest online retailer and many of its long-time vendors. Generally speaking, vendors selling less than $10 million in products each year on the site will no longer get wholesale orders from Amazon in the next few months, although that will vary by category, said the people, who requested anonymity to speak about an internal matter. Amazon’s aim is to cut costs and focus wholesale purchasing on major brands like Procter & Gamble, Sony and Lego, the people said. That will ensure the company has adequate supplies of must-have merchandise and help it compete with the likes of Walmart, Target and Best Buy.
The mom-and-pops that have long relied on Amazon for a steady stream of orders will have to learn a new way of doing business on the web store as a 3P seller. Rather than selling in bulk directly to Amazon as a 1P seller, they’ll need to win sales one shopper at a time. It’s one of the biggest shifts in Amazon’s e-commerce strategy since it opened the site to independent sellers almost 20 years ago. While the plan could be changed or cancelled, it’s currently moving forward, the people said.
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Google Moves into Amazon Marketplace’s Turf
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Google is positioning itself as a direct Amazon Marketplace competitor with a revamped e-commerce offering. Shoppers will have a personalized homepage on the existing Google Shopping tab, where they can filter results based on features and brands, read reviews, and watch videos about products.
For example, if a shopper is looking for headphones, they can filter for wireless and a preferred brand.
The blue shopping cart on the item shows shoppers they can seamlessly purchase what they want with returns and customer support, backed by a Google guarantee. This new shopping experience will merge select features of the Google Express e-commerce service with the Google Shopping online product search and price comparison platform.
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Walmart to Offer Next-Day Delivery Without a Membership Fee
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Marc Lore, president and CEO of Walmart eCommerce, announced that Walmart will begin rolling out next-day delivery for more than 220,000 items on its website, including pet food, diapers, paper towels and laundry detergent, this week.
The nation’s largest retailer said Tuesday it’s been building a network of more efficient e-commerce distribution centers to make that happen.
Customers must spend at least $35 to be eligible for next-day delivery. “NextDay” delivery will be available first to Walmart.com customers in Phoenix and Las Vegas, Lore said, and will expand to Southern California later this month.
NextDay delivery is a being positioned as a complement to Walmart’s same-day Grocery Pickup and Delivery options, and free two-day shipping on millions of items. The program figures to boost Walmart’s e-commerce sales.
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Amazon Wants to Help Its Employees Quit and Start Delivery Businesses
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Amazon announced that it wants to help its employees quit — so they can start their own delivery businesses. Tthe e-commerce giant said that it’s expanding its Delivery Service Partner program to include an incentive for current Amazon workers
The program promises up to $10,000 in startup costs for employees who partake in the program. Amazon is also throwing in the equivalent of three months of an employee’s most recent salary to help soon-to-be entrepreneurs get their fleet of delivery cars off the ground.
The program is Amazon’s solution to its last-mile delivery problem where the company is trying to compete with legacy players like UPS and FedEx.
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Post Office Wants to Shift Focus from Mail to Ecommerce Deliveries
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USPS has floated a new proposal to Congress that would see it reducing mail delivery from six to five days a week while expanding packaging deliveries to seven days.
The shipping world has changed dramatically over the past decade. Since 2007, total U.S. mail volume has declined 31% to 146 million pieces, including a 41% drop in first-class mail, its most profitable product. At the same time, ecommerce has exploded, offering a way to plug the lost revenue while also adding burden to USPS operations as it handles more packages. USPS has already started to dip its toes into 7-day a week delivery to manage the 20 million packages it averages daily. It now delivers some Amazon.com packages on Sundays and also other ecommerce retail fulfillment during the busy Christmas holiday season.
The agency lost $3.9 billion in 2018, its 12th straight year of losses. According to the agency, this move better reflects the market conditions and would save it billions of dollars per year. Republican and Democratic members of Congress, however are opposed to making a change to mail deliveries.
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70% of Consumers Worry About the Environment, While 52% Have Changed What They Buy
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American consumers are prepared to reward manufacturers, retailers, and others offering products that benefit the environment as long as any additional costs associated with providing those benefits are not transferred to them in the form of higher prices.
Earth Day 2019, an A.T. Kearney study of 1,000 US consumers’ sentiments on environmental benefit claims found that more than 70% of consumers consider their impact on the environment when shopping. But, even as topics like climate change continue to make headlines, only 52% have shifted their purchase decisions—although this is improving, with 66% intending to shift within the year. Why haven’t they changed? The answer is they want the businesses that serve them to change first.
While nearly 80% of respondents would consider delayed shipping if the environmental benefit was clearly articulated, they are unlikely to settle for higher costs in exchange for environmental benefits.
“What we see in these findings is that the consumer market may be more receptive to buying green products than they were in years past,” said Greg Portell, an A.T. Kearney partner involved in the study. “But, they don’t want to sacrifice quality or pay higher prices to benefit the environment.”
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Ongoing Labor Shortage Underscores the Need for Optimization
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A national unemployment rate hovering around 4% is a good thing for the economy but makes life difficult for managers of distribution and fulfillment centers. Finding sufficient staff is a problem that’s not likely to go away soon, so companies are looking to maximize productivity and reduce inefficiency.
This special report from Multichannel Merchant explores ways ecommerce and direct-to-customer merchants are creating optimized warehouses to address labor shortages. This includes tactics like incentives, space optimization and investment in a modern warehouse management system (WMS).
In the MCM Special Report you will learn:
- About the shift from centralized DCs to smaller regional fulfillment centers
- About leveraging existing WMS capabilities like labor management and order flow
- About the advantages of a modern WMS, including granular KPIs and volumetric data
- How more efficient space utilization can fuel opportunistic buys that capture more sales
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The Green New Deal Solution To Climate Change Risks
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Whether it’s a deadly cold snap or a hole under an Antarctic glacier or a terrifying new report, there seem to be constant reminders now of the dangers that climate change poses to humanity.
Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Ed Markey, D-Mass., think they have a start to a solution.
What is the Green New Deal?
The Green New Deal is an ambitious proposal in the US to combat climate change. Named after President Franklin D. Roosevelt’s New Deal to combat the Great Depression, the Green New Deal is a massive stimulus package aimed to address climate change, as well as the rising social, economic, and political inequality in the US that comes with it. It calls for economic mobilization not seen since World War II and the New Deal and aims to cut greenhouse gas emissions (GHGs) in half by 2030, shift 100 percent of national power generation to renewable sources, upgrade all infrastructure and transportation for energy efficiency, decarbonize the largest polluting industries (manufacturing and agriculture), fund the capture of GHGs, and virtually eliminate poverty in the US by including everyone in the prosperity that this transition would provide.
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Teamsters Vote Down UPS Contract but Negotiations Continue
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While the majority of UPS workers represented by the Teamsters union voted against a new contract, negotiations will continue as turnout was low and the no votes didn’t meet the threshold for killing the deal.
According to the Wall Street Journal, 54.3% of 243,000 Teamsters members that include UPS drivers, sorters and other workers voted against a new five-year contract Friday, while 62.1% of 11,000 freight workers voted down a separate agreement; several regional and local deals were voted down as well.
Union rules require a two-thirds vote to reject a contract when less than 50% of members vote.
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Now Bankrupt, Sears Was Once the Amazon and Walmart of Its Day
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Creative destruction. The term was coined by economist Joseph Schumpeter to name the process of businesses eliminating one another as they evolve. Today, no company better represents this evolution than Sears Holdings (NASDAQ: SHLD), the parent of Sears and Kmart.
Now a retail dinosaur and officially bankrupt, Sears was the largest American retailer as recently as the 1980s, and it dominated over the postwar era and much of the 20th century. Many of the innovations and strategies the company pioneered were borrowed by Walmart (NYSE: WMT), the biggest American retailer of the last generation, and later Amazon (NASDAQ: AMZN), the defining retailer of the e-commerce era — and there are more than a few similarities among them.
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