People love free shipping, even if retailers don’t necessarily love it so much. For customers who don’t have Prime memberships, Amazon’s free shipping on orders of $35 or more is a popular policy. Yet if one item in a customer’s cart ships from a third-party seller, it doesn’t count toward that $35 total. Amazon has now changed this policy…but only for items that were already listed as having free shipping.
Amazon has vastly expanded its site inventory without having to expand its physical inventory through Marketplace sellers, but the catch for shoppers and vendors has been that these items don’t count toward Amazon’s free shipping threshold. That makes sense, since in many cases Amazon isn’t the company shipping them.
While items all go into a single Amazon cart, the differences between item types can get confusing. Here are the three different types of inventory that Amazon sells:
Sold by Amazon: This is merchandise in Amazon’s inventory that ships from Amazon’s warehouses. For warranty purposes, Amazon is the seller, and that’s who you ship the item back to if you have a problem.
Fulfilled by Amazon: This is merchandise that third-party sellers purchase and ship to Amazon for storage in one of their warehouses. Sellers pay monthly fees for storage, as well as fees for handling the package and to have Amazon’s workers pick and pack the orders when one of these items sells. The advantage of this is that the seller doesn’t need to keep inventory on hand or employ their own order pickers. Amazon handles returns, but the third-party vendor is the company that sold the item for warranty purposes.
Fulfilled by seller: The seller stores their own inventory, picking, packing, and shipping their own orders. This could be a one-person business or a store with dozens of employees. Returns go back to the seller, and for warranty purposes, the third-party vendor is the company that sold the item for warranty purposes.
This week’s change affects items that are “fulfilled by seller,” but the seller doesn’t charge separate shipping. Let’s say, for example, that you’re buying two toys: one is shipped from Amazon and costs $9, and the other is shipped directly from the seller’s warehouse and costs $27. Even though Amazon isn’t involved in shipping the more expensive item, it still counts toward your total for free shipping.
Is this a good thing for the sellers, many of which are small businesses? That isn’t clear. It incentivizes Marketplace sellers to offer free shipping, which they may or may not be in a position to do.
Amazon Change to Super Saver Shipping: Good for Sellers? [eCommerceBytes]
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