In a significant shift that could impact third-party sellers on its platform, Amazon is reportedly introducing a new fee for merchants who choose not to utilize the company’s fulfillment service.
According to reports from Bloomberg and CNBC, this fee will come into effect on October 1st, targeting sellers enrolled in Amazon’s Seller Fulfilled Prime (SFP) program.
The SFP service, introduced by Amazon in 2015, allows third-party vendors to offer Prime products directly from their own warehouses, bypassing Amazon’s logistics process. While this offers sellers more control over their shipping operations, they are required to uphold Amazon’s stringent delivery standards, including one- to two-day shipping and weekend deliveries.
The timing of this fee imposition has raised eyebrows, especially considering the current regulatory environment. Reports suggest that the Federal Trade Commission is preparing an antitrust lawsuit against Amazon, adding to the company’s challenges. Additionally, this fee compounds the existing 8 to 15 percent commission that Amazon already deducts from orders on its platform.
The 2 percent fee could potentially serve Amazon’s strategic interests. By encouraging sellers to opt for its in-house fulfillment service, Fulfillment by Amazon (FBA), the e-commerce giant gains tighter control over the logistics process while also capitalizing on rising FBA expenses. However, this move might attract regulatory attention, as it echoes accusations made against Amazon in 2019, alleging the company forced sellers into using FBA.
Amazon initially halted new enrollments in the SFP program in 2019, resuming the waitlist only in June of this year, purportedly to appease regulatory concerns. The exact reasoning behind this fee implementation remains unclear, as Amazon has yet to respond to requests for further information.
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For third-party sellers who have been enjoying the flexibility of the SFP program, this added charge could prompt a reassessment of their selling strategies. Some might see the fee as an incentive to shift towards Amazon’s fulfillment services, while others might be prompted to explore alternative platforms or shipping solutions.
As the e-commerce landscape evolves and competition intensifies, Amazon’s actions are being closely monitored by both sellers and regulators alike. While the fee introduction might be an attempt to consolidate Amazon’s control over its ecosystem, it could also spark fresh concerns about the company’s influence and practices within the industry. As the October 1st deadline approaches, sellers will need to carefully evaluate their options and consider the potential implications of this new fee on their business operations.
I am a law graduate from NLU Lucknow. I have a flair for creative writing and hence in my free time work as a freelance content writer.