Amazon Fulfillment Fees Increase Hits Online Retailers Hard
by Will Schneider
Most online retailers using Amazon Fulfillment will be hit hard starting in February of 2013 with a multitude of price increases targeted to combat increasing transportation costs. Most notably, the fee increases include an adjustment to the “weight handling” fee and an addition of a returns processing fee. These fees and increases will apply to anyone that self-fulfills through their system – in an attempt to further entrench customers by giving them incentive to fulfill by Amazon.
Like many of the price adjustments over the last couple of years, these recent increases hit retailers hard – and at a time when many online merchants are struggling to squeeze as much profit out of their company as possible and weather the economic storm of the last couple of years. In particular, smaller businesses may find these particular fee increases a heavy burden to shoulder next year.
“Of anything that we hear most about the Amazon Fulfillment network, the vast majority of comments are related to expensive pricing structures and challenges with unique service requirements and flexibility,” noted Will Schneider, CEO of WarehousingAndFulfillment.com. The well known fulfillment provider is definitely the “800 pound gorilla” in the fulfillment space, offering multiple locations, quality execution and tie in to its Amazon network. But, as Mr. Schneider notes, “for many smaller companies in particular, the large orientation of Amazon makes addressing the challenges of a smaller business difficult – from lack of branding options, difficult to come by personal customer service, and now a series of price increases that make is less competitive with other outsourced fulfillment options.”
Of course, a price increase is never easy to swallow, although oftentimes understandable. But the interesting part will be to see what the Amazon Fulfillment fees increase, which was announced during the holiday season, will bring for Amazon in the New Year.