Amazon touts success with third party sellers program, even as complaints begin to grow
The online retailer claims that more than 2 billion items were sold through its Fulfillment by Amazon program, and over 600,000 new jobs have been created outside of Amazon
The online retailer Amazon is still furiously growing by adding new fulfillment centers it announced a second fulfillment center in Jacksonville, Florida today, for instance – while at the same time signing up third party sellers in order to expand its offerings, and therefore its sales.
But… the complaints are growing, too. Some are from odd websites that one has never heard of before, but others are from more mainstream sources such as Forbes (though I would admit that on many matters Forbes is very odd, as well).
Photo: Amazonian Abby by Jeffrey used under Creative Commons Attribution 2.0 Generic
Third party sellers are the bargain needed to be made to continue its expansion, no doubt. Without them, many product lines will not work for Amazon. Its program, called Fulfillment by Amazon (or FBA), allows the company to compete in the handmade category, as well as in professional services.
But there is a cost, as managing third parties is nearly impossible, with the only real way the company can discipline vendors is to shutdown their accounts. This is a huge punishment and incentive to perform for legitimate businesses, but none at all for vendors built to scam – and scammers are multiplying.
Amazon is pretty great when it comes to PR, especially compared to Apple which is the worst (its latest press release is dated November 30, 2016). But PR won’t help it here. Its program will be judged by customer satisfaction, and any Psych major will be able to tell you that customers will remember the one time they got ripped off by an FBA partner and ignore the five times their order was fulfilled without incident.
Here is Amazon’s announcement for its FBA service:
SEATTLE, Wash. – Janaury 4, 2017 – Amazon today announced the Fulfillment by Amazon (FBA) service delivered more than 2 billion items for Marketplace sellers worldwide in 2016. The Amazon Marketplace creates opportunities for sellers, brand owners and entrepreneurs to reach customers around the world. FBA items shipped worldwide grew more than 50 percent during the holiday season, while Prime members ordered millions of items from sellers in the Seller Fulfilled Prime program offering free two-day or next-day shipping.
“2016 was a record-breaking year in sales worldwide for sellers on Amazon. The Amazon Marketplace empowers brand owners and retailers of all sizes, many of them small businesses, to reach customers around the world,” said Peter Faricy, VP for Amazon Marketplace. “In fact, according to our economic studies, sellers have created over 600,000 new jobs outside of Amazon. Sellers are choosing Amazon because we help them build and grow their businesses with impactful programs like Seller Fulfilled Prime, and we’re proud of the fact that sellers are reinvesting their success into their local communities by creating jobs.”
“As a growing business and brand owner, the Amazon Exclusives and FBA programs helped us accelerate our business to achieve more than 100 percent growth in sales this year,” said Ben Arneberg, co-founder of Willow & Everett. “The FBA service handles the work of packaging and shipping orders to customers, which gives us the time to create new products that customers will love. We had our most successful Black Friday and Cyber Monday ever, and on Prime Day earlier in the year our sales boomed more than 10x compared to last year.”
2016 Selling on Amazon Milestones:
Marketplace and FBA
- FBA delivered more than 2 billion items worldwide.
- Active sellers worldwide using the FBA service grew more than 70 percent.
- Outside the U.S., FBA units shipped grew more than 80 percent.
- Using the FBA service, Amazon sellers from more than 130 different countries around the world fulfilled orders to customers in 185 countries.
- The Seller Fulfilled Prime program added more than 6 million new items that are now Prime eligible across the U.S., U.K., France, Germanyand Japan.
- Sellers on Amazon that reached $100K in sales grew by 30 percent.
- Sellers worldwide have created more than 600,000 new jobs outside of Amazon.
- Sellers worldwide received orders for more than 28 million items on Cyber Monday.
- FBA items shipped worldwide grew more than 50 percent year-over-year during the holiday season.
- Prime members worldwide ordered millions of items from sellers in the Seller Fulfilled Prime program offering free two-day or next-day shipping.
- Sponsored Products clicks worldwide grew by more than 150 percent driven by expansion of advertising placements on desktop and mobile sites.
- The number of sellers worldwide using Sponsored Products grew more than 100 percent.
- Sponsored Products introduced a new and convenient payment method, Unified Billing, which allows Sellers to deduct their advertising spend from sales proceeds.
- Amazon Business (www.amazon.com/business) generated more than $1 billion in sales in its first year, with sellers receiving over half of the orders. Amazon Business now serves more than 400,000 business customers in the U.S., and includes more than 45,000 sellers with access to the business-specific selling tools. Amazon Business launched in Germany, marking its first international expansion.
- Handmade at Amazon (www.amazon.com/handmade) launched in Germany, France, Italy, Spain and the United Kingdom, expanding its selection of handcrafted artisan-made goods to customers in the EU. In the U.S., the Handmade at Amazon store added six new categories (Accessories, Baby, Toys and Games, Beauty & Grooming, Pet Supplies) and now offers over 500,000 items sold directly by artisans across all 50 states from 80 countries around the world.
- Amazon Home Services (www.amazon.com/services), a marketplace for on-demand professional services, expanded to more than 50 U.S. metro areas. Home Services now offers over 1,200 unique services from providers across 60 professions. Customer orders fulfilled by Home Services pros grew more than 200 percent.
- Amazon Exclusives (www.amazon.com/exclusives), a store that gives customers direct access to innovative new products from 600 up-and-coming brands, with thousands of unique items being added each month. Sales from the Amazon Exclusives store grew more than 250 percent.
- Amazon Mexico (www.amazon.com.mx) continued its expansion by enabling more than 20,000 domestic and international sellers to add more than 50 million product offers available to Mexican customers.
- Sellers on Amazon Canada (www.amazon.ca) achieved a record-setting $1 billion in sales.
- Popular brands that started selling on Amazon included American Girl, Lands’ End and Segway.
- Amazon introduced the Pan-European FBA program allowing sellers to build their international business by selling across all AmazonEuropean marketplaces while shipping inventory to just one destination.
- Sellers on Amazon worldwide used capital from Amazon Lending loans to grow sales by an estimated $4 billion. The Amazon Lending program offers business loans to invited sellers on Amazon to help them grow their businesses.
- Amazon hosted more than 300 women-owned businesses in Seattle for the first-ever Amazon Marketplace Women’s Entrepreneur Conference.
Businesses interested in Selling on Amazon, FBA and Sponsored Products can visit us for more details at http://services.amazon.com.