Amazon Introduces New Fees for Sellers Fulfilling Own Shipments, Targets Enhanced Customer Experience

Amazon has announced the introduction of new fees for third-party sellers who fulfill their own product shipments, shifting from the previous model of using Amazon’s fulfillment services.

Starting October 1st, members of Amazon’s Seller Fulfilled Prime program will incur a 2% fee on every product sold, according to a notice sent to merchants last week, this is a departure from the previous absence of such fees for sellers.

The notice states, “We are updating our Seller Fulfilled Prime requirements to ensure it provides customers with a great and consistent Prime experience.”

The Seller Fulfilled Prime program, launched in 2015, allows third-party merchants to sell their products under the Prime badge without paying for Amazon’s fulfillment services, known as Fulfillment By Amazon.

This program has not gained widespread traction due to the expectation that sellers must meet Amazon’s primary delivery standards, including fast shipping and weekend delivery.

Amazon re-opened invitations for the invitation-only program in June this year, after suspending new registrations for Seller Fulfilled Prime in 2019.

In addition to these changes, Amazon imposes referral fees ranging from 8% to 15% on each sale, sellers may also pay for various services including warehousing, packing, and shipping, along with advertising fees.

Amazon’s marketplace has come under increasing scrutiny from antitrust regulators in the US and internationally, many believe the company leverages its power to pressure merchants selling on its platform.

Regulators have been investigating whether Amazon pressures sellers to use its services in exchange for preferential treatment in the market.

The fee increase comes as the US Federal Trade Commission prepares to file a long-anticipated lawsuit against Amazon later this month.

The commission has been investigating the company on multiple fronts, including its treatment of third-party sellers on the marketplace, which now accounts for nearly 60% of total retail sales.

Amazon responded to regulatory accusations in a post published on Monday, arguing that sellers continue to flock to its vast marketplace “because it offers great value.”