Amazon plans to kill FBA and FBM (except Chinese FBM sellers). How should we prepare?

You are not alone. We switched gears and modified our inbound shipping plans to either distribute smaller pallets removing the inbound fee, or for certain items, we pay the fee to reduce our LTL freight costs.
This only works if you know what the numbers are and actually do the math. Many of the complaints on the NSFE are clearly by people who cannot assess their logistics cost.

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Very very true.

Though I would not be surprised to see a point in the future where Amazon might pivot to more general uses for their network that involves competing with carriers rather than retailers.

But in the mid-term, they will quite happily continue to enroll and charge domestic FBA 3P Sellers.

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I am not sure they could.

The independent contractor for last mile delivery has significant issues which Amazon is better able to tolerate now than if it was a common carrier. Example of a common carrier offering inferior service due to that business model is FEDEX Ground which is dying.

Amazon is refining its operations for efficiencies which may not be possible as a common carrier. Their use of the big yellow totes for delivery to multi-unit at the same address is an efficiency move which might not work as well with multiple shipper packages. Its routing algorithms with two or three deliveries per day to end points might be harder with more shipping sources.

Amazon does not wait for packages from all remote points to reach their final hub. FEDEX, UPS and USPS do, One delivery leaves each their local delivery point each day. Amazon deliveries are based on expected deliveries to the last hub several times per day. And they are predictable. Amazon skips days when there is not enough volume to justify the truck to the final hub.

The logistics model is different from a common carrier. It would be a lot of work to change the model.

Although they have tested pickup from FBM sellers which has some commonality to common carrier issues, they have not introduced that service as a standard. They probably never will because it would degrade performance from FCs to buyers.

What might kill FBA is if the courts sustained some novel FTC interpretation of anti-trust law. It could force Amazon to drop some or many FBA sellers to avoid the potential for conflict with such a decision.

But the courts are loath to reject these novel interpretations as they recently were for the NDA ban, it is a long shot.

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That can’t come soon enough!

FedEx Ground is a horrendous service. I have some of my inventory orders delivered to my PMB at the UPS Store since I don’t have to worry about porch pirates stealing stuff that way. They continually have problems figuring out where the UPS Store is with just the street address.

For the B&M store my wife and our son own FedEx just delivered a box to an entirely different store, street, and, city name (they are on a border of two cities) and my son had to go pick up the box since it contained ‘early releases’ that they are eligible to get and put on the shelf for sale immediately!

They are also the only delivery drivers that will intentionally turn any damaged boxes around so the damage can’t be seen. It’s like doing a ‘body cavity’ search every day when they get deliveries.

Their ‘independent contractor’ style is terrible.

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Announced back in Dec of 2023. This link still works though and shows before and after. 4-15 rates are the new ones.

https://sellercentral.amazon.com/help/hub/reference/GABBX6GZPA8MSZGW

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Thank you! I remember seeing this page long time ago but got sidetrack. Now I should spend more time to figure how to make this change profitable like you did. :slight_smile:

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The economy is not getting worse and unemployment is at an all-time low.

That being said, I don’t shop at Temu, but I have seen Alibaba sellers use Amazon images for products they don’t even carry. I presume they hope you will purchase something else anyway.

In any event, I am trying to work directly with manufacturers so that I am not competing with China, etc. I have watched as they overtake product niches with inferior product at Amazon. Some of the prices I see from Chinese sellers even at Amazon are crazy low…this was $7.99 through Amazon FBA yesterday (a bot apparently raised the price recently):

2PCS 5" Large Crystal Sun Catcher Prisms

It’s getting harder and harder to find unique products to sell anywhere. I am even mixing in some hand-made things that has helped my income greatly.

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People are going to have to source from places that aren’t cheap chinese junk. I’m dropping my cheap sourced from China pendants and sticking to once sourced in the Us and canada mostly.

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Last summer, Amazon lost a total of 1300 units, never to be seen again, so we had to do FBM to keep the product “in stock”. This year, we saw the placement fees and the low inventory fees, and decided to not let Amazon lose a large number of units, and then charge us “low inventory fees” for their incompetence. So no FBA fees for you, Amazon, we went FBM again this summer. (Ours is a very seasonal product)

Amazon FBA may end up being how we address the “off season orders” when volumes are lower. They may never become competent enough to handle a product that sells 20,000 units in 2 months, and then maybe 1,000 total the rest of the year without forcing us keep them “overstocked” to avoid one fee, only to encounter a storage fee when sales quiet down.

I simply don’t think they grasp the concept of a seasonal product.

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Exactly this. Without this, you’re just some schmuck foreigner to rip off.

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Off-topic replies have been moved to 💰 US economy chat ... econochat!

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