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Amazon Just Ended A Popular Feature For Its SMB Sellers

By January 24, 2020January 31st, 2020No Comments

(This post originally appeared on Inc.)

“Free shipping for purchases of $25 or more!”

Are you doing this right now on Amazon? If so, then you better be aware: last week the company implemented a new rule that stops you from offering certain “free shipping” promotions for your products. In other words, you can’t offer a promotion that advertises free shipping once a customer reaches a threshold on purchases. It’s either all or nothing.

In a blog post, the company warned that any reseller doing this will find their incentives terminated. The move appears to only affect those resellers that use free shipping as an advertising promotion, at least for now.  The company has given no official reason for the change, but many of its smaller resellers have their suspicions.

“Amazon wants only Prime products to have free shipping since they make more money when they fulfill orders themselves,” one reseller complained in the announcement’s comments section.

Another reseller believes that the move hurts merchants that have large inventories. “Not only do they have to potentially change settings for their inventory (which might be a lot of work depending on the setup on Amazon’s end and/or the seller’s end),” the seller wrote. “but it ruins a seller culture that shouldn’t be touched.”

Others believe that the move will hurt their sales. “This new policy makes NO SENSE!” complained a reseller.  “Amazon has been pushing free shipping for YEARS, and everyone knows if you don’t offer free shipping on this site, your sales will tank!” Many online merchants use the promotion as a way to drive higher sales through larger orders. “It is, well was, a great way to get customers to buy MORE items, making more money for us and Amazon,” one wrote.

So why is Amazon doing away with the free shipping incentive? I think the answer is obvious: it’s about speed.  The company wants to make the buying process as quick and seamless for its customers as possible.

When you’re a Prime Member you can buy products in many instances with just one click without considering shipping. Once shipping is introduced into the buying process, it adds another step into that process, a hurdle between the desire to buy and actually buying. The company has already seen enormous success with its Prime subscription program mainly because it takes the cost of shipping out of the equation and quickens the transaction. I believe that Amazon ultimately wants all products sold on its site to follow the same route.

But isn’t this just an illusion? Of course it is.  We all know that “free” shipping isn’t really free. Merchants who offer “free” shipping are either eating those costs or finding some way to bake it into their products’ prices while still remaining competitive. This will not be easy for many, particularly those that ship overseas or have bulkier products.

Some merchants say that breaking out the cost of shipping does hurt their sales because it gives them a psychological dis-advantage. “Strangely I can sell something at $24.99 with “free shipping” easier than I can sell $15.58 + Shipping cost of $5.12,” one commented in the company’s blog. Others say that breaking out the cost of shipping is being more transparent because, as one reseller wrote, “if (a merchant) is trying to con me by telling me I’m getting free shipping, what other shady information is included in the item description?”

The debate will continue and Amazon merchants on both sides have good points. But it’s no matter. Whether transparent or just an illusion, more and more customers have been conditioned to expect that the costs of shipping are included in the price of the product. Online sellers who break it out as a separate line item will more often find themselves losing sales. If you sell on Amazon and you want to take advantage of all their features, tools and – most importantly – worldwide market offered by its platform, then this is a reality that you’re going to have to accept.

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