Amazon actually disabled these logistics channels? !

The biggest news in the Amazon circle last week was that Amazon notified sellers that "Due to storage and processing capacity issues, FBA warehouses have encountered a large backlog and delayed order delivery, and it is expected that December shipments will be delayed in receipt." This news shocked the entire seller circle at the time.

Although warehouse pressure is indeed high during peak season, the situation this year has never been so severe. What is wrong with Amazon's delivery capabilities now? According to recent news from foreign media, the difficulties Amazon has encountered recently are simply its own choice.

What exactly did Amazon do?

According to foreign media reports, Amazon has cancelled its ground logistics cooperation with UPS, FedEx and other express delivery companies during the peak season at the end of the year. During this peak season, all peak season packages will be delivered by Amazon. Not only does Amazon not use them itself, it also prohibits third-party sellers from using these logistics companies for delivery.

Amazon FBA orders are not only delivered using its own logistics system, but also through large logistics companies such as FedEx or third parties such as carrier platforms to deliver products to customers.

In the early days of Amazon, the related facilities and systems for its own logistics were not yet perfect, and most of the delivery orders were contracted to the above companies. Even at the beginning of last year, the share of these third-party logistics companies in Amazon's delivery orders was still around 80%.

By spending a lot of money to build a logistics system in the past two years, Amazon not only announced this year that it would fully upgrade its "one-day delivery" service, but also increased the proportion of Amazon's own logistics to more than 50% . Now, more than half of Amazon's orders are delivered by its own logistics.

Although it is only a matter of time before Amazon kicks out third-party logistics and takes all its own orders, Amazon acted too hastily in this matter.

In the middle of the year, Amazon refused to renew its contract with FedEx, and at the end of the year during the peak season, it said that "FedEx could not meet our expected delivery time" and no longer used FedEx to deliver any Prime orders during the peak season.

As we all know, Amazon overestimated the delivery capacity of its own logistics and was unable to fully handle these orders, which ultimately led to a large backlog of orders and even required delivery to be delayed for more than two weeks. To this day, some Online Monday orders are still pending.

At the same time, there is also the above announcement of delayed warehousing, which is to postpone some warehousing work and deliver these purchased orders with all our strength. From the situation in our seller group, it is true that many warehouses have delayed for a long time and have not put products on the shelves, but the goods will still be signed for and will not be returned, so you don’t have to worry about this.

Although there have been some setbacks, and sellers have been left without goods during the peak season, Amazon has still managed to take over this share of FedEx. I believe that logistics will return to normal next month, but we also have to think about what kind of situation we ordinary sellers will face in the future given the growth rate of Amazon's own logistics.

A new monopoly

Monopoly will only breed a blood-sucking monster. When Amazon's orders are delivered by multiple logistics companies, they all offer relatively low prices due to competition, and Amazon's control over upstream prices is not great.

However, when all order deliveries use Amazon's own logistics, Amazon can fully control the pricing of logistics services. This is the time for Amazon to reap the benefits of sellers.

There are already signs of this kind of monopoly harvesting, and even sellers who have escaped from FBA’s control are not immune. Sellers using Self-Fulfilled Prime (SFP) were warned by Amazon not to use FedEx for delivery in this incident at the end of the year.

“Use the faster and more expensive FedEx Express, or withdraw from the SFP program and stop using the Prime delivery logo,” this is Amazon’s advice.

We all know what the absence of the Prime delivery logo means. Today, Amazon can ban sellers from using FedEx because it does not meet timeliness requirements. Tomorrow, it can use the same reason to ban other logistics companies . Amazon is forcing third-party sellers to use FBA services again.

But things may not be that bad. In addition to us sellers, the government does not want to see such a monopoly situation. The US political circles are also internally discussing the feasibility of splitting up Amazon's various businesses and implementing supervision. I believe that the extreme situation above will not occur.

Before the government takes action to rectify the situation, our sellers may have to face rising FBA logistics costs for a period of time.