Friday, September 29, 2023

Despite threat of antitrust lawsuits, Amazon imposes new fees

It would almost seem like a provocation. At the end of August, Amazon announced the introduction of new commissions for certain third-party merchants present on its marketplace, but who do not use its logistics and delivery services (FBA, “fulfilled by Amazon” in French). This measure, which will take effect on October 1 in the United States, comes even as the Federal Trade Commission (FTC) prepares to initiate legal proceedings against the online commerce giant. The US competition watchdog accuses him of abuse of dominant position against… third-party sellers. In Europe, Amazon was able to avoid heavy financial sanctions by negotiating concessions with Brussels, including a commitment not to give preferential treatment to FBA customers.

Push towards FBA? – These new commissions, which amount to 2%, will apply to merchants participating in the SFP (“Seller Fulfilled Premium”) program, whose registrations, suspended for four years, have just resumed. This allows them to opt for free delivery in one or two business days, managing the logistics themselves. And thus boost your sales, because it is a crucial element for many buyers. Amazon justifies this additional cost by the expenses linked to the management of two supply chains. On the contrary, its detractors see it as a desire to encourage third-party sellers to use its FBA service, which represents an important source of profits for the company. Especially since the program includes particularly strict conditions to respect.

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“Buy box” – These new commissions could provide additional arguments to the FTC, which will try to show that the Seattle group favors third-party sellers who use FBA, allowing them to generate higher margins. In other words, it takes advantage of its dominant position in online commerce to capture a greater proportion of the value. The regulator should emphasize that FBA customers appear in a better position in search results. And they are more likely to appear in the “buy box”, the yellow button on the right that allows you to directly purchase a product. Two elements that increase sales. The company will highlight sellers happy to be freed from managing inventory, shipping and returns.

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Rate increase – For merchants in the SFP program, this new commission is in addition to fees that have continued to increase in recent years. Like all other sellers on the Amazon marketplace, they already have to pay between 8% and 15% of the sales price, depending on product categories. Added to this are advertising costs, which have become essential to appear well in search results and, therefore, to attract buyers. Marketplace Pulse estimates this could represent up to an additional 15%. For FBA customers, an additional commission of between 20% and 35% must also be added. Last year, Amazon recovered more than 50% of the sales price, according to Marketplace Pulse estimates, up from just 35% in 2016.

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To go further:
– A second wave of layoffs at Amazon
– The difficult return to the land of Amazon aggregators

Times of National
Times of National
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