Amazon shipping requirements for third-party sellers received attention on Monday when the Wall Street Journal wrote, “Amazon Blocks Sellers from Using FedEx Ground for Prime Shipments: Amazon cites a decline in FedEx performance heading into the final holiday push.”
There’s a lot to keep in mind beyond the Wall Street Journal headline.
First, it’s important to understand that third-party sellers who fulfill themselves are free to choose their shipping service provider – including FedEx.
The policy cited by the Wall Street Journal impacts sellers who choose to enroll in Seller Fulfilled Prime, which is known as SFP. Those items are displayed on Amazon with the Prime badge, which promises 2-day delivery to Prime members.
In the past, the only way for sellers to get the Prime badge was to send inventory to Amazon fulfillment centers through the FBA program (Fulfillment by Amazon). Now, with SFP, approved sellers can deliver directly to domestic Prime customers from their own warehouse – but they must use Amazon’s Buy Shipping. As the company explains:
“By displaying the Prime badge, you are committing to fulfill orders with Two-Day Delivery at no additional charge for Prime customers. Amazon gives you access to the right transportation solutions to help you meet the high bar for the Prime customer experience.”
(Sellers can also join the FBA Onsite program to participate in Prime while shipping from their own warehouses, more on that below.)
Amazon said it wants to ensure customers receive their packages on time and is managing cutoffs for delivery by Christmas. It is temporarily restricting FedEx Ground and Home for Seller Fulfilled Prime shipments (SFP) – but they’re still available in the “Buy Shipping” for standard shipments.
In addition, sellers can continue to use FedEx Express shipping methods (which offers faster delivery than FedEx Ground) in “Buy Shipping” to fulfill Prime shipments.
Amazon Seller Fulfilled Prime “Buy Shipping”
Last month, an Amazon spokesperson told EcommerceBytes that sellers enrolled in Seller Fulfilled Prime have always been required to choose a ship method available in Buy Shipping Service “in order to maintain a consistent delivery experience for customers.”
Buy Shipping takes into account the seller’s ship-from location, the promised delivery date, and information about the available shipping methods. Note that sellers who enroll in SFP know about the Buy Shipping restrictions when they apply for the program.
It may seem like the FedEx restriction was a sudden development, but Amazon has been communicating with sellers about possible restrictions in Buy Shipping for over a week.
On December 5, Amazon warned SFP sellers that carriers would increase their transit times beginning December 16. “This may result in some of these ship methods being unavailable in Buy Shipping services. Work directly with your carriers to determine the impact these carrier service restrictions have on your business and plan ahead to avoid any issues with your holiday orders.”
On December 11, Amazon warned SFP sellers, “the availability of UPS Ground, FedEx Ground and FedEx Home for Seller Fulfilled Prime orders may be limited in certain regions, where these services do not meet the customer promised delivery date. If these services are unavailable for some of your orders, please select an alternative shipping service to fulfill your Prime orders.”
And on December 15, Amazon advised SFP sellers: “Due to the delivery performance of FedEx Home and Ground ship methods, these ship methods will be unavailable in Buy Shipping for Prime shipments effective Wednesday 12/18 2PM EST (not Monday 12/16 2PM EST as communicated earlier).”
It’s interesting to note that in the fall, FedEx announced cutoff dates for holiday shipments, advising shippers that the last day to send packages via FedEx Ground to arrive before Christmas was December 16th. Christmas Eve is, after all, one week from today.
On Monday, FedEx provided us with the following statement: “While (Amazon’s) decision affects a very small number of shippers, it limits the options for those small businesses on some of the highest demand shipping days in history, and may compromise their ability to meet customer demands and manage their businesses. FedEx Ground stands ready to support our customers and will continue to deliver record-breaking volume this holiday season.”
Problems Reported with FBA Onsite
There is another way to participate in Prime without having to ship inventory to Amazon fulfillment centers: FBA Onsite, which we wrote about in 2018.
On Monday, a merchant who participates in the FBA Onsite program said Amazon has been restricting them from using UPS,* which had been their go-to carrier, and was instead forcing them to use USPS for the past 2 months or so.
Worse – as of this week, the only option available to the merchant is USPS First Class, a slower service. That means their products are displaying to shoppers as delivery by December 26 – after Christmas – even though the products displays a Prime badge and shows “Fulfilled by Amazon.” That has dramatically slowed sales, and the merchant is paying the same shipping rate for a service that is costing Amazon far less.
Note that the FBA Onsite program is still in beta and is limited to a small number of sellers.
* Updated 12/19/2019: We reported above that Amazon has been restricting participants in FBA Onsite from using UPS, but it should state FedEx. The merchant clarified, “Amazon has stopped using FEDEX for onsite – UPS was never a popular option with onsite, so with the removal of FEDEX, all that was left was the USPS.”
Worst Holiday Shipping Season in Years
These reports are symptoms of what has been one of the toughest holiday shipping seasons in a long time, beginning with the Thanksgiving holiday weekend. As far as we can tell, all of the shipping carriers appear to be experiencing delays of some sort, as we wrote on the AuctionBytes Blog on Sunday evening in a post titled, “Are You Ready for Christmas Crunch Shipping Delays?“
One question retailers and marketplaces might wish to ask themselves: is their obsession with so-called “free shipping” contributing to the problem we’re seeing this holiday shopping season?