Amazon.com Inc. will make some products offered by marketplace sellers eligible for Prime two-day shipping without those retailers taking part in the Fulfillment by Amazon program, according to Scot Wingo, executive chairman of ChannelAdvisor Corp., which helps retailers sell on web shopping portals like Amazon and eBay.
Wingo said today during the “Amazon & Me” workshop today at the Internet Retailer Conference & Exhibition in Chicago that several of his clients have been invited by Amazon to take part in the new program. Those marketplace sellers that have what Wingo called “strong fulfillment records” would fulfill their own orders and still have their items Prime-eligible. As of now, sellers have to use FBA for their products to be marked as eligible for Prime shipping.
The move could help those sellers win Amazon’s buy box more often and give consumers access to more products covered by Amazon’s Prime two-day-shipping-and-loyalty program. Several IRCE speakers today described Prime as “jet fuel” for Amazon thanks to its 40 million or more estimated members, who tend to spend more with Amazon than do other shoppers.
Amazon, No. 1 in the Internet Retailer 2015 Top 500 Guide, declined to comment about the Prime change, the subject of rumors in recent weeks.
Retailers that use Fulfillment by Amazon send products to Amazon fulfillment centers and Amazon fulfills those orders once a sale is completed. Amazon also handles customer service and returns, with Amazon promoting its role in such orders on its website, a move intended to boost consumer confidence.
Retailers pay for storage space in Amazon warehouses and fulfillment centers, and their customers can get two-day Prime shipping for orders of more than $35. Those shoppers making marketplace sales typically know they are getting what Amazon calls “discounted shipping,” and, according to Wingo, Amazon uses Prime eligibility in determining what marketplace sellers win the buy box, effectively the top spot in search results on Amazon. According to estimates today at the “Amazon & Me “ workshop, Amazon has made some 30 million items eligible for Prime, with 27 million of those available from marketplace sellers. Consumers typically pay $99 a year to belong to Prime, though Amazon does give free trial memberships.
This Prime change would presumably enable Amazon to further sweeten the appeal of the program while saving some warehouse space.
“Amazon wouldn’t have to build all of the fulfillment warehouses themselves needed to offer FBA expansion,” says James Thomson, a former Amazon executive who works as managing director of MarketplaceAccelerator.com, which offers consulting services to online sellers. He also spoke at the workshop today, though he had no direct knowledge of the Prime change. “I would not be surprised if Amazon started renting out space in some of these preferred merchant FBA facilities for Amazon to make more of the top selling items that Amazon itself carries to be available for faster, shorter-distance fulfillment.”
38% of orders shipped through Amazon were fulfilled through Amazon’s Fulfillment by Amazon service in February, as measured by sales via ChannelAdvisor clients. That is down slightly from 39.6% in January.
While not confirming the Prime change, another workshop speaker, Fahim Naim, a former senior vendor manager for Amazon and now the founder of online retail consultancy eShopportunity, drove home the importance of Prime for marketplace sellers. “If you are not Prime-eligible, you are in for a tough battle,” he told attendees during an afternoon session entitled “First Party Versus Third Party on Amazon.”
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