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EcommerceBytes-NewsFlash, Number 1188 - January 05, 2006 - ISSN 1539-5065    1 of 5

Amazon Decision Raises Shipping Costs for Third-Party Sellers

By Ina Steiner
EcommerceBytes.com
January 05, 2006




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Amazon told third-party sellers Wednesday they will have to absorb the increase in shipping costs when the USPS raises postal rates next week. Amazon charges buyers shipping fees for items purchased from its third-party sellers on Amazon Marketplace, but will not raise shipping fees for buyers; instead, sellers will absorb the higher shipping costs.

Amazon used to reimburse sellers for part of the shipping fees. In October, Amazon changed the way it displays shipping fees on seller reports. Instead of forwarding sellers the shipping fees less a "shipping holdback fee," it began crediting the full amount buyers pay for shipping and added a fee called "variable commission fee" equal to the shipping holdback fee (not a percentage of the selling price). Sellers complained about the change because buyers would fail to understand that Amazon was not giving sellers 100 percent of the shipping fees Amazon charged buyers (http://auctionbytes.com/cab/abn/y05/m09/i13/s01).

At the time, sellers speculated that Amazon was making the change in anticipation of higher postage rates that "would be easier to pass off onto sellers."

Four days before the impending USPS postal rate increase, Amazon posted in its Seller Success board, "At this time, there will be no change to what Amazon.com buyers pay for shipping or to what Amazon.com sellers are credited for shipping" (http://digbig.com/4fwdn).

Several threads on Amazon discussion boards have been started to protest the higher costs to sellers.

http://digbig.com/4fwdp

http://digbig.com/4fwdq

http://digbig.com/4fwdr

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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