|Thu Jan 24 2013 15:09:02|
Amazon Sellers Set to Scale Back on International Shipping
By: Ina Steiner
Online sellers are calling for Amazon.com to raise its shipping reimbursement rates as they face a major hike in the cost of doing business internationally. But with only 3 days left before USPS rates for certain international packages skyrocket, Amazon has remained mum.
"There has been no word from Amazon.com about whether they will increase the shipping reimbursement to cover these huge increases," wrote an EcommerceBytes reader. "Third party sellers on Amazon have thousands of listings that were calculated to the 2012 rates."
Amazon gives Marketplace sellers only a part of the fees it collects from buyers for shipping costs, and sellers are supposed to price their inventory accordingly.
But the discrepancy in domestic shipping rates versus international leave sellers with a dilemma: if they raise product prices to account for higher international shipping costs, they will price themselves out of the domestic market. If they keep product prices the same, they either take a loss on international orders, or must stop shipping internationally altogether.
A media seller on Amazon's discussion board wrote, "Unfortunately it isn't practical to raise the price each CD $3.50 to offset the rise in shipping costs. That would put the cost of what is now a $2 CD to $5.50 and then thinking someone internationally MIGHT buy it. That would kill domestic sales in the process. We'll just have to stop selling internationally if reimbursement is not raised."
Amazon.com spokesperson Erik Fairleigh said the company had no comment at this time about whether the company would adjust shipping credits.
The reader referenced above said the discussion boards are heating up with sellers worried about the consequences of the postal increases. "We are especially worried about what Amazon will do, or won't do, about the gigantic increase in USPS international shipping. The international flat rate priority mail envelopes, and light weight international parcels going first class, are seeing huge increases."
According to him, the rate increases that will affect booksellers the most include:
- Priority Mail Intl Flat Rate Envelopes to Canada is increasing from $12.95 to a whopping $19.95;
- Priority Mail Intl Flat Rate Envelopes to Europe is increasing from $16.95 to a whopping $23.95;
- First Class Package (one pound) Intl Service to Canada is increasing from $5.75 to a whopping $10.55.
Eric Nash, Director of Online Marketing for Stamps.com, said the new rates for First Class Package International Service (formerly First Class Mail International) are definitely going to shock many sellers.
"Costs are going up on average 58.6% for that mail class, but it can be considerably higher for specific price groups (Canada) under 1 lb. And as Amazon sellers have mentioned in the forum, without any increase in the shipping credit from Amazon, it can be tough to sell internationally for many items."
Nash said that even with the rate increase, however, USPS First Class Package International Service will still be the cheapest option to ship overseas for ecommerce sellers.
Higher shipping costs affect all online sellers, of course. As a reader pointed out in a recent Letter to the Editor, eBay sellers are also being squeezed by USPS rate hikes.