Amazon, one of the largest fulfillment, shipping, and delivery systems in the world is finally deciding to make a change to one of its perks that FBA users used to enjoy.
The perk in question here is the additional surcharge that typical fulfillment or delivery services charge during their peak season.
On average the holiday/peak season surcharge is going to cost third-party sellers $0.35 per item sold using Amazon’s Fulfillment by Amazon services (FBA).
In the past this was a charge that Amazon absorbed themselves, giving sellers just another reason to use their services over competitors.
Obviously, this will be more impactful for sellers that are doing a heavier volume of sales. That being said, no one likes to hear that their cost of business is now going to go up, simply because one of their partners, if you will, is planning to up the price of their services.
Now it’s important to remember, as we mentioned earlier, that this is already something that a lot of the other big players are already doing.
Large-scale shippers like FedEx and the U.S. postal service have already been implementing these types of surcharges during the holiday season.
In this sense, it’s not exactly something that Amazon FBA users shouldn’t have entirely expected to happen down the line at some time.
Typically this would mean that the folks that are purchasing products from third-party sellers using Amazon, would be the ones to pay the price in the end. This is of course assuming that all third-party sellers are going to increase the price of their products in response to the new peak season surcharge.
However, this may not be the case, especially for every business running on the Amazon FBA services.
For example, let’s say you’re a company that has 25,000+ products. It’s going to be a real hassle to have to re-price every one of those items. You might not even have the procedures in place to make those changes in such a timely manner.
This is where having a system to manage your product inventory and ordering logistics comes into play in a huge way.
Depending on the size and scale of your business you could be saving tens of thousands of dollars by simply re-pricing to make up for holiday surcharges.
Desert Cactus, for example, is a seller that uses Amazon’s fulfillment services.
Desert Cactus will likely have to take a $100,000 hit in added costs due to this new charge.
And this is simply due to the fact that re-pricing everything in such a large way would take a lot of effort. An effort that inevitably costs money.
All of this being said Amazon still claims that even though they’re adding these new charges to holiday sales they will still be on average 70% less expensive than the typical two-day shipping alternatives.
What do you think?
Should Amazon’s fulfillment users have expected this to come? It’s an interesting question weighing a change like this and considering whether or not to go over to a competitor if they’re already requiring this same type of surcharge.
Any change Amazon makes is always something that this industry watches very closely. As we will continue to do ourselves.
Stay tuned for more stories like this. And if you have any questions about our own automation services and process related to inventory management, shipping, sales channels, and more please reach out and let us know!
