Amazon is expanding its so-called “seller flex” program, which makes a host of products available for quick delivery from merchants without taxing its warehouses with more inventory.
Citing documents it reviewed, Bloomberg reported news that an expansion of the program is seen as a blow to the likes of the United Parcel Service (UPS) and FedEx, because it cuts them out of the process when merchants send their products direct.
Through “seller flex,” Amazon oversees the pickup of orders from the warehouses of its third-party merchants and delivers them to customers’ homes. While that process displaces UPS and Fedex, Bloomberg noted Amazon could still tap both services for delivery, but the eCommerce giant ultimately has the final say in how each package is sent — rather than letting merchants decide. Being in charge of the deliveries gives Amazon more control over how packages make it to customers’ doorsteps. The expansion of this program will also enable the company to save money via volume discounts and to reduce congestion in its warehouses.
Bloomberg said Amazon is trying to attract more sellers to the program and has changed its name to FBA Onsite, which associates the previously known “seller flex” with Fulfillment by Amazon, a service the company debuted in 2006. Amazon is reportedly telling merchants that if they want to keep goods in their own warehouses, they can still take part in other Amazon-led programs, including “Subscribe and Save,” a service that offers customers discounts on frequently purchased items, and “Small and Light,” a free delivery service for products that don’t cost much to ship because of their size.
In order to take advantage of those services in the past, merchants had to send their products to an Amazon facility and pay extra fees to access those programs, noted Bloomberg. Currently, many third-party merchants use Amazon’s warehouses to store their products, preferring to pay a fee to the eTailer rather than keep their goods on their own property.