Officially implemented! Amazon's major favorable service has been launched

Amazon sellers’ mid-year feast, Primeday, is only about a month away. Have you sellers started preparing?

This year, the new Primeday Coupon method has been added, which allows sellers who have not signed up for flash sales to participate in the event. The effect is much better than the previous methods of only being able to attract traffic. For detailed setting methods, click here to view my previous introduction.

Of course, there is another reason to attend Prime Day this year, because in order to expand the number of Prime members in the first half of the year, Amazon invested 800 million US dollars to upgrade its delivery service to one-day delivery.

It wasn’t just yesterday that foreign media reported that Amazon has begun pushing this service to Prime members in North America.

Is one-day delivery service really necessary? According to a report by RBC Capital Markets, a professional research institution, delivery time is indeed directly related to consumers' purchasing desire.

“The faster the delivery, the more people will place orders”

RBC's report shows that from 2014 to 2018, Amazon has been continuously expanding the scope of its next-day delivery, and Amazon's sales have also increased accordingly.

Blue: Next-day delivery range in 2014

Red: Next-day delivery range in 2018

After announcing the upgrade of the one-day delivery service, Amazon officials said that the number of orders in some areas that have been trialing the one-day delivery service has increased significantly.

So there is no doubt that the one-day delivery service brings more consumers and a higher desire to place orders, and only Prime members can enjoy this service for free, which can further expand the number of members. So I expect the effect of Primeday this year will be far greater than in previous years.

Amazon has also paid a huge cost for this service, and it is expected to invest $800 million in the second quarter of this year alone. Subsequent maintenance and expansion costs will drag down Amazon's short-term profitability.

After reading about its significance to Amazon, let’s talk about some practical topics. What do sellers gain/pay for the one-day delivery service?

In fact, it is consistent with the benefits mentioned above for Amazon. One-day delivery can significantly expand the consumer group and purchasing desire. Sellers participating in this year's Primeday event can also achieve more ideal sales than previous years' big promotions and flash sales.

However, the costs that sellers have to pay for this are also not small, the most important of which is the problem I mentioned last time - warehouse division.

In order to achieve better one-day delivery time, Amazon needs to have inventory of relevant products in all major urban areas, so as to ensure that the products can be delivered to customers within one day.

Self-operated products are not so bad, but third-party sellers have a hard time. Recently, in our communication group, discussions about warehouse consolidation and warehouse splitting have become more and more frequent, just because Amazon needs to fulfill its one-day delivery promise. (Scan the QR code at the end of the article to join the group)

Most of the sellers who have not used the relevant warehouse consolidation service have recently encountered more serious warehouse separation problems. If the two warehouses are too far apart, the first-leg transportation cost will be greatly increased, and the sellers are miserable about the warehouse consolidation situation.

At the same time, because products eligible for one-day delivery must maintain a certain inventory level in different warehouses, this also increases the seller's stocking costs. If you want your products to benefit from one-day delivery, you must prepare more inventory.

Although Amazon recently gave sellers with good sales performance a huge storage fee discount to attract them to stock more goods.

However, inventory promotions will eventually end (January next year). After that, sellers who cannot afford the high storage fees and reduce inventory will most likely not be able to participate in one-day delivery.

Therefore, in order to better attract consumers to pay, sellers will need to bear more inventory pressure in the future.

In a nutshell, for sellers, one-day delivery service can bring more additional orders, but it will also increase the first-leg transportation and warehousing costs.

However, Amazon’s generous storage fee discounts now largely offset the cost issues brought about by one-day delivery.

Now one-day delivery has been launched in North America and will be available across the US before Prime Day. All sellers need to do is take this opportunity to prepare goods for Prime Day.

I have prepared a set of Primeday preparation tips for everyone, including a detailed explanation of the new gameplay added this year. Please scan the QR code and find me to get it~

PS. If you want to join the seller discussion group, you can also private message me to let me add you to the group

Source: Cross-border Business School

For the highlights of the past, please click the link below to review

Have you been fooled by Amazon’s weird reasons for removing products from shelves?

The shipment was rejected?! Something went wrong with FBA!

If you don’t participate, your store will be closed!? Amazon’s new plan is released

Click to like and share your experience▼