Introduction

Amazon is introducing a new charge for third-party sellers who choose to ship their own products instead of using the company’s fulfillment services. Starting from October 1, members of Amazon’s Seller Fulfilled Prime program will be required to pay a 2% fee on each product sold. This change comes after previously not having any fees for sellers in this program.

Reason for the Fee

The notice sent to merchants states that the update is aimed at ensuring a great and consistent Prime experience for customers. However, representatives from Amazon have not provided any additional comments on this change.

About the Seller Fulfilled Prime Program

The Seller Fulfilled Prime (SFP) program, launched in 2015, allows third-party merchants to sell products with the Prime badge without using Amazon’s fulfillment services (Fulfillment By Amazon or FBA). However, the SFP program has not gained as much popularity as FBA, as sellers are required to meet Amazon’s Prime delivery standards, including fast shipping and weekend service. In June, Amazon reopened signups for the invite-only SFP program after suspending enrollment in 2019.

Other Costs for Sellers

In addition to this new fee, Amazon already charges sellers a referral fee ranging from 8% to 15% on each sale. Sellers are also responsible for costs such as warehouse storage, packing and shipping, and advertising fees.

Antitrust Investigations and Lawsuit

Amazon’s marketplace has been under scrutiny by antitrust investigators in the U.S. and abroad. Many regulators believe that the company uses its power to disadvantage the merchants selling on its platform. The Federal Trade Commission (FTC) is reportedly preparing to file a lawsuit against Amazon, focusing on its treatment of sellers on the marketplace. This is particularly significant as the marketplace accounts for approximately 60% of Amazon’s overall retail sales.

Amazon’s Response

In response to these accusations, Amazon has defended its marketplace, stating that sellers continue to choose its platform because of its value. They emphasize that the paid services offered are optional and not necessary for success on the platform.

Conclusion

Amazon is implementing a new 2% fee for third-party sellers in its Seller Fulfilled Prime program who opt to ship their own products. This change aims to enhance the Prime experience for customers but has attracted scrutiny from antitrust investigators. As the FTC prepares to file a lawsuit against Amazon, the company maintains that its marketplace provides value and offers optional services for sellers to drive business growth at a lower cost.

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