eCommerce continues to outpace physical stores, and convenience is largely driving this growth. To better support the demands of online shopping, both Amazon and UPS are improving their logistics infrastructure, but unfortunately will be raising fees by the end of this year. Amazon has also incorporated new rules and fees to prevent unauthorized sellers from listing branded merchandise.
Amazon “Brand Gates” New Sellers With $1500 Fees and Other Requirements
Two weeks ago, Amazon sellers tried listing branded merchandise on the marketplace, only to be blocked by brand gating restrictions. In order to sell brands like Nike, Lego and Samsung, new sellers must provide 3 official invoices and/or a letter from the brand owner. In addition to these required documents, sellers would need to pay a one-time nonrefundable fee of up to a $1500 per brand.
This new approval process has rattled the seller community as Amazon has given very little information about this change. Third-party sellers, which make up 49% of Amazon sales, include private label sellers and various resellers that may not be able to get authorization they need. Brands like Nike, for instance, explicitly prohibits resellers from selling on Amazon.
For Amazon, it’s all about the customer. “We want customers to be able to shop with confidence on Amazon,” says an Amazon spokesman. “We consider several factors when determining qualifications and criteria to sell certain products. For certain products and categories, Amazon requires additional performance checks, other qualification requirements and fees.”
While this move may slow down counterfeiters, it could also hurt sellers who have started stocking inventory for the holiday season, only to realize they would now be unable to sell their goods on the marketplace. On the bright side, existing sellers that have been selling brands for a while are not required to pay the fees.
UPS Will Increase Rates by 4.9% After the Holiday Season
Online retailers will soon face higher shipping rates with UPS after this year's holiday season. UPS recently announced an average fee increase of 4.9% to take effect on December 26. This will affect daily rates for ground and air service.
UPS Freight rates will increase by about 4.9% and will be effective September 19. Additional rate changes to Retail rates and UPS SurePost are also on the way and will be announced November 18.
These new rates are likely the result of Amazon Prime setting the standard on shipping convenience. Logistics companies like UPS are scrambling to improve their infrastructure to support rising demands and consumer expectations when it comes to online orders. Couriers may soon be competing against Amazon as they build their own logistics network.
Efficiency Is the Key to Saving the Brick-and-Mortar Store
As shoppers choose the convenience of ecommerce over browsing stores the old fashioned way, many physical stores are shutting down. Traditional retailers and department stores need to integrate technology that drives sales and enriches the customer experience. This means making in-store shopping efficient.
“Stores are not designed to be efficient,” says Hongwei Liu, CEO of Mappedin, a retail wayfinding software provider for some of the largest malls in Canada. “They’re not designed to give you exactly what you want as soon as possible, and it’s hard to change that mindset.” Liu believes that stores need to incorporate technologies that promote customer efficiency.
Real-time promotions, shopping personalization, navigational apps and digital, customer-facing store directories can provide some of the relevance and convenience that shoppers love about ecommerce. These are some tactics retailers can use to meet the needs of today’s busy shopper.