Until further notice, Amazon.com, Inc
The temporary ban went into effect before the holiday season concluded, much to the dismay of many third-party sellers, and it will remain in effect "until the delivery performance of these ship methods improves," according to an email that Amazon sent to relevant third-party sellers.
Amazon stated that its main reasoning behind this decision is "to protect Prime customer experience." That's not surprising considering that over 80% of U.S. households have an Amazon Prime membership.
"We have seen a drop in the delivery performance of FedEx Ground and FedEx Home ship methods for Seller Fulfilled Prime (SFP) shipments," said Amazon, referencing the large amount of reported instances of FedEx shipments arriving late.
A FedEx spokesperson commented that "while this decision affects a very small number of shippers, it limits the options for those small businesses on some of the highest demand shipping days in history, and may compromise their ability to meet customer demands and manage their businesses."
Non-Prime orders are still allowed to ship using FedEx Ground and FedEx Home. Additionally, third-party sellers are still allowed to use FedEx Express to fulfill Prime shipments, however that option is more expensive.
While this move may help maintain the image of Amazon Prime for now, the ban doesn't look good for some of the third-party sellers needing to adjust to the change.
"Some sellers exclusively use FedEx for Seller Fulfilled Prime [SFP] because they have negotiated good freight rates or have daily pickups," said Prime Guidance CEO Steve Yates. Prime Guidance consults with third-party sellers on Amazon. "Not being able to use FedEx ... will cause sellers who negotiated good FedEx ground rates to incur higher costs and some may need to scramble to get another carrier to pickup orders."
Third-party sellers represent 58% of merchandise sold on Amazon. That's up from 3% since 1999, according to an April 2019 letter to shareholders by Amazon founder, CEO, and president Jeff Bezos.
- https://www.cnbc.com/2019/12/17/amazon-sellers-react-to-fedex-ground-block-for-holidays.html
- https://techcrunch.com/2019/12/16/amazons-third-party-merchants-are-now-barred-from-using-fedex-ground-for-prime-shipments/
- https://www.businessinsider.com/amazon-bans-third-party-sellers-fedex-delivery-2019-12
- https://blog.aboutamazon.com/company-news/2018-letter-to-shareholders
- https://www.digitalcommerce360.com/2019/07/11/82-of-us-households-have-a-amazon-prime-membership/
