Amazon.com released two new services in beta Tuesday to help decentralize an online business owner’s operations by providing product storage and special shipping rates, as well as a branded website service.
The result, says the company, is customers can use Amazon Prime and Free Super Saver Shipping when buying products from third-party sellers. Sellers participating in the Fulfillment program receive a “Fulfilled by Amazon” icon next item listings, indicating a control in cost and order time.
“We created Fulfillment by Amazon because it is good for Amazon.com customers, and therefore, great for our third-party sellers,” said Joe Walowski, Product Manager, Fulfillment by Amazon.
“With membership in Amazon Prime growing every day, more and more Amazon.com customers want a great deal on shipping and to receive their orders quickly. Fulfillment by Amazon makes it possible for sellers to offer Amazon.com customers this convenience.”
Amazon says handling fees start at $0.50 per item plus $0.40 per pound with a storage fee of $0.45 per cubic feet per month. The company relates that the program frees online sellers from the time and money required to store, pick, pack, ship and provide customer service for the products sold online.
When customers order from Amazon, or the also released WebStore, discussed later, Amazon sends the product to the customer directly with the company’s shipping service. Amazon will also manage post-order customer service, returns, and refunds.
Charles Erdman, co-founder and president of Dervish Media and Dervish Toys, believes the service to be a great benefit for small and mid-sized businesses that need to focus on growth more than the expense and logistics of order fulfillment.
“For small manufacturers of unique products like us, one of the greatest challenges is getting the product to the consumer in a cost-effective manner,” he said.
“The overhead costs of pick-and-pack for one-off orders drains time and resources away from the important tasks of marketing and business development. Fulfillment by Amazon alleviates this issue by acting as the small business owner’s fulfillment house at an acceptable price point.”
Amazon uses Seattle Gift Shop as an example for an online retailer using its new WebStore beta, which provides online sellers with a co-branded website at Amazon.com. WebStore users pay a 7 percent commission, which includes credit card processing fees and fraud protection, for each product purchased through the site, and a monthly fee of $59.95.
“Not only has using WebStore by Amazon increased my sales dramatically, but its easy-to-use tools give me complete control of the look and feel of my site,” said Kathy Wojtczak, who manages www.elementjewelry.com using WebStore. “Plus, I can use WebStore by Amazon to track and manage all of my online inventory and sales in one place.”
Coupled with Amazon’s auction site, a service like these could be a serious threat to eBay’s dominance by removing many of the barriers and logistical problems in online commerce.
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