Amazon told sellers it's postponing its annual seller fulfillment fee changes until June 1, 2021, giving sellers some breathing room at a hectic period in the middle of a pandemic. In an email sent to sellers this morning, the company outlined this and other ways it said was working to help small businesses during a difficult time.
While sellers said they appreciated the delay, some asked what Amazon would be doing for sellers who fulfill orders themselves (FBM) rather than through FBA (Fulfillment by Amazon) as the US Postal Service is experiencing gridlock leading to reports of spotty scanning and late (very late) deliveries.
What's striking about the information in the letter from Amazon's Jeff Wilke is that Amazon built out its platform during the pandemic. "We've increased square footage across our fulfillment and logistics network by 50%, opening dozens of new delivery stations and fulfillment centers around the world. We've hired over 400,000 employees in the biggest peacetime workforce ramp-up by any company in history. And we've spent more than $2.5 billion on pay incentives and bonuses."
In contrast, the US Postal Service, long the go-to company for fulfilling orders for small sellers, raised rates *during* the holiday shopping season. It's unclear if the organization used those higher fees paid by sellers to bolster its service - in fact, earlier this year there were claims it was taking action to cut costs that negatively impacted speed of delivery even before the year-end shopping season. The temporary holiday fees expire on the 26th, but higher postal rates will go into effect permanently in January.
Email Subject: Postponing Fee Adjustments
This continues to be an incredibly difficult year for entrepreneurs and small business owners around the world. Nobody had a playbook for how to keep a business going through a global pandemic, but you continue to meet the challenge and serve customers every day. We're inspired by your efforts and want to help you be successful during these times. Our communities are depending on Amazon and all the small businesses who sell in our store to keep as much in stock as we can and to deliver products to doorsteps while keeping our employees and partners safe and healthy.
We're working hard and investing heavily to support you and your business. Since the start of the pandemic, we've invested more than $10 billion in COVID-19 related operating costs. We've increased square footage across our fulfillment and logistics network by 50%, opening dozens of new delivery stations and fulfillment centers around the world. We've hired over 400,000 employees in the biggest peacetime workforce ramp-up by any company in history. And we've spent more than $2.5 billion on pay incentives and bonuses. We continue to be thrilled by how successfully hundreds of thousands of you have leveraged our investments during 2020. It has benefited everyone—you, us, our customers and communities. While many other companies have passed along costs through surcharges and fee changes in 2020, we have absorbed over $5 billion of those costs on your behalf. And we expect to invest billions more in the first half of 2021 in helping selling partners like you as we all try to return to normalcy.
Now, as we look ahead with vaccines on the horizon, other logistics providers have already announced their annual fee increases for 2021. In a normal year we'd be doing the same, but this isn't a normal year and we've made the decision to postpone our annual fulfillment fee adjustments and continue to absorb the costs we are incurring on your behalf until June 1, 2021. We'll share more details in the spring. We are doing this because we want to provide stability and support for you during what will likely remain a challenging winter as vaccine distribution gets underway.
Our focus throughout this holiday season has been on getting the most selection for customers while enabling your success. That has included limiting ordering for our own retail business in the U.S., and allocating the majority of space in our fulfillment centers for seller inventory so that your products are in stock for customer orders. As we write this email today, sellers using Fulfillment by Amazon carry enough inventory, on average, to support 25% more days of sales than our own retail business, and more than 60% of products in our fulfillment centers worldwide are from sellers.
Sellers surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, growing about 60% from last year. Your businesses continue to grow faster than Amazon's own first-party retail business, and we're glad. What's good for you is good for Amazon, our customers, and communities around the world.
You, and the more than 1.7 million small- and medium-sized businesses serving Amazon customers in our store. have never been more important for our communities, and we want to thank you for your continued partnership and support. We remain more committed than ever to supporting your success, and we hope you and your families stay safe this holiday season.