Effective July 1, Amazon is cutting shipping costs by as much as 67% for marketplace sellers that offer small tech accessories like USB cables or household items like toothbrushes, according to Bloomberg, which obtained Amazon’s email to merchants.
Merchants would pay $1.61 to ship three, flat, 1-ounce packages, according to the e-mail. In addition to tech products, the new rates also apply to small items in other categories sent via the Fulfillment By Amazon Small and Light program, introduced a year ago. Amazon shoppers across the U.S. order tens of millions of units each year that fall within Small and Light parameters, according to internal documents reviewed by Bloomberg.
The reduction in shipping costs is the result of efficiencies in fulfillment centers and negotiated rates with shippers, and comes at the request of U.S.-based sellers, an Amazon spokesperson told Retail Dive.
This improvement to its Fulfillment By Amazon Small and Light is designed to help U.S. sellers who have small-bore items like toothbrushes or phone cords on offer, but which consumers may be more likely to find at a local drugstore to avoid the out-of-balance shipping cost.
Such items are often marked as an "add-on" on Amazon, to help drive the overall cost of shipping by including them in a larger order. That's still an option, but for many items these lower fees will help take away the friction of having to wait until an order reaches the $25 or higher threshold, according to Amazon spokesperson Tom Cook. Such items still wouldn't qualify on their own for free two-day Prime shipping, but they tend to be items customers are no in hurry for.
There’s plenty of evidence that Amazon is working hard to drive down shipping and fulfillment costs, including its acquisition of thousands of semi-trailers, cargo plane leases and even an ocean freight forwarding license. The latter is no sign that freight operations are imminent, but does indicate the priority Amazon places on reducing costs and easing commerce. The shipping fees change shows that applies even on these small items and even for smaller U.S. Marketplace sellers.
It's a niche move that could be a challenge to not just to the likes of eBay, whose marketplace is also filled with small electronics accessories, sold mostly directly from China, but also brick-and-mortar retailers like drugstores or grocery stores that stock everyday items that consumers regularly need but don't necessarily need right away.