Amazon is asking FBA sellers to bid per unit to be eligible for “sub-Same Day” delivery, where packages arrive in two hours or less, according to an e-mail sent to sellers earlier this month. The e-mail says that sub-Same Day deliveries “have experienced 12% higher sales on average” than those delivered through regular FBA service, or “Poor Man’s FBA,” as we’ll have to start referring to it moving forward.
The e-mail read:
“You pay only for units that actually ship through Sub Same Day, at the per-unit price you bid. Participation is optional, and you’re never charged more than the price per unit you set.”
Amazon, of course, tried to spin this as a good thing for sellers, with a spokesperson telling Business Insider:
“For the first time, sellers can choose which additional products to offer at faster speeds based on their own business expertise and customer insights. [Amazon] will continue to place a wide variety of products from independent sellers throughout our Same Day network at no additional cost to sellers.”
In last week’s edition, I wrote about Amazon expanding its drone delivery service and predicted:
“I imagine that Amazon will push prices and free thresholds higher as time goes on, as they have a habit of introducing new logistics services at a loss and then later raising prices or forcing sellers to subsidize the cost. ‘Optional: Enable drone delivery for just $0.30 per FBA delivery and reach customers who are looking to get their items delivered fast.’ — and that’s how some items in the future will have an ‘Available For Drone Delivery’ badge and others won’t.”
Turns out that charging sellers extra to be eligible for drone delivery isn’t so far fetched after all. Amazon has already introduced a bidding system for sub-Same Day delivery that we’ll likely see a similar version of for drone delivery in the future.
I have a question: Does Amazon hate sellers? And also customers?
As an Amazon seller, you have to pay commissions on sales, advertising to get discovered, FBA fees to qualify for Prime Shipping and convert, and now more delivery fees to be eligible for the faster shipping that Amazon is pushing on customers. Basically it’s an FBA-specific advertising fee. On top of that, Amazon wants you to offer the lowest prices on your products across the web.
Amazon has created an environment where making money requires products with 90% margins to survive, which means either poor quality, reduced quantity (shrinkflation), higher consumer prices (on and off Amazon), or all the above. And where opting out of Amazon means ignoring half the e-commerce market in the US.
This is a problem. This has been a problem, but now it’s really a problem. There’s a $100B+ tax on US e-commerce (and growing). Amazon is charging it. And you’re paying it.
