Amazon Trials its Shipping Service in Three US Locations
It appears as though the time to be an Amazon third party seller is now.
Just a month ago, Amazon reversed its price parity provision on third party sellers which restricted them from offering lower prices elsewhere. And now Amazon is looking to extend their pilot shipping services to those companies responsible for half of their U.S. sales.
TJI Research picked up word about select sellers in New York, Los Angeles, and Chicago receiving special invitations to participate in the Amazon Shipping service this week. This seller-to-customer shipping service will allow these individuals to print shipping labels through their Amazon dashboard to affix to their products that are then picked up and delivered to customers via ground shipping. Someone from Amazon will reportedly come by their warehouses each weekday and deliver packages to customers 7 days a week.
Amazon has informed these sellers that their shipping service can reach most US destinations within 5 calendar days meaning the service is not used for many Prime customers. However, it is possible that Amazon Shipping will be used to fulfill Seller Fulfilled Prime shipments for customers within a 2-day ground-shipping radius of the participating warehouses.
It seems as if all goes smoothly, Amazon Shipping could be a game changer for third-party sellers who currently rely on UPS and FedEx to ship their products.
This past November, Amazon seller Ray Berman received one of these special invitations to participate in Amazon Shipping. He reported that shipping rates were as much as 50 percent cheaper than that of UPS and FedEx. On one particular occasion, he paid $80 to ship 600 pounds of boxes through Amazon instead of paying $160 through UPS or $104 through FedEx.
Third party merchants shouldn’t get too excited though. Apparently the rates are considered “promotional pricing” which means that they could go up as the service becomes more widely adopted. Nonetheless, it still seems that Amazon Shipping would eliminate a lot of headaches by cutting out the middleman.
Although they declined to comment on their most recent plans, an Amazon spokesperson told CNBC in November that "we're always innovating and experimenting on behalf of millions of small businesses that sell on Amazon.”