Amazon will raise prices again at the end of June! The cost of doing business in North America is high again

Amazon announced in the past two days that it will increase the Amazon Logistics remote delivery fees from June 30th!

Remote Fulfillment is a pan-North American delivery program. After joining the program, sellers in the United States can sell goods to buyers in Canada and Mexico without shipping inventory into these two countries. Amazon will be responsible for delivering products from the United States to buyers in these two countries.

Moreover, Prime buyers in Mexico and Canada also enjoy free shipping and a complete Amazon Logistics buyer return policy. From the buyer's perspective, this program provides a smooth shopping experience, except that the timeliness is definitely not as good as the local inventory. Sellers can save the cost of separate storage in these two countries, so many sellers in the US site have opened this program.

Long-distance delivery fees skyrocketed in October last year, with logistics fees for all weight gradients rising by 3.5% to 16.8%. Even Amazon complained about last year's logistics fees. Sellers blamed shipping companies and logistics companies for the rise in various fees. This year, Amazon has officially announced that its logistics expansion was too fast and capacity was overflowing, and it would cut warehouse costs. So you raise prices when there are not enough warehouses, and Amazon still raises prices when there are enough warehouses or even overflowing. What's the logic behind this?

Last week, I updated everyone on the new trends after Amazon’s Q1 financial report was released. All policies point to one point: Amazon spent too much money on logistics, and the company’s profits in e-commerce were eaten up. Now Amazon is trying to make money, and it is no longer the reserved leader in the industry. Andy said at the shareholders’ meeting that he wanted to get the company back on track to profitability within two years. If logistics costs cannot be reduced in a short time, then we can only open up new sources of income.

Open source is a big deal. In addition to what we said earlier that Amazon has already rented out warehouses and transport fleets. Amazon will also "open source" third-party sellers. Sellers' expenses on Amazon are mainly in two aspects. One is the money spent on in-site advertising, and the other is storage fees, logistics fees, and commissions, collectively referred to as third-party seller service fees. According to data collected and captured by multiple parties by the overseas data agency ILSR, last year Amazon earned at least about $121 billion in revenue by providing these services to third-party sellers, a figure that accounts for about 34% of the sellers' total annual sales! This is equivalent to paying Amazon $34 for every $100 worth of products sold, making it a landlord in the new century. In 2021, the average cost spent by Amazon sellers on advertising and display placement is 4-5 times that of 2016. This is why Amazon has made a lot of money on third-party service fees.

Amazon's retail revenue has stagnated. If it wants to increase revenue, third-party seller service fees are the best way to start. Amazon is now inseparable from FBA. It is becoming increasingly difficult to do business without FBA. Not only does Amazon not promote self-delivered products, but it also uses various disgusting return and tracking policies to disgust self-delivered sellers.

Even ILSR believes that Amazon's so-called additional items have gradually become essential items, and it also cited more data to prove that the number and frequency of advertisements displayed in Amazon product search results have increased dramatically, and at the same time, FBA products are overly prioritized in search. Each change is increasing the importance of FBA, making it implicitly a must-have. Therefore, Amazon has no worries about raising prices for third-party sellers. After all, as the big brother of American e-commerce, if you want to survive here, you have to pay protection fees obediently. This is also the confidence of Amazon to increase long-distance delivery fees twice in a little over half a year.