Amazon has announced the revival of its shipping service, Amazon Shipping, which had been put on hold at the onset of the COVID-19 pandemic. With this move, Amazon aims to compete with established logistics giants FedEx and UPS. The service allows sellers, including those on external platforms, to utilize Amazon’s delivery services for domestic shipments without needing to store their products in Amazon’s warehouses.
Confirming the resumption of the service, an Amazon spokesperson clarified that businesses must be selling on the company to be eligible for Amazon Shipping. The company is already known for providing shipping to merchants who utilize its storage and delivery service, Fulfillment by Amazon. However, Amazon Shipping caters to sellers who wish to leverage Amazon’s delivery capabilities while managing their own inventory.
Amazon Shipping, which was previously tested but paused in 2020 due to the surge in pandemic-related orders on the platform, has now been reinstated to support sellers’ order fulfillment needs. Amazon spokesperson Olivia Connors emphasized that the service provides sellers with an additional option for shipping packages quickly and cost-effectively, contributing to enhanced customer service.
Amazon had expanded its logistics operations during the pandemic to accommodate the rising online orders. This expansion led to increased warehouse capacity, but as the pandemic situation eased, Amazon was faced with excess warehouse space. The company responded with strategies such as subleasing, lease terminations, and delaying new construction to optimize its warehousing resources.
Notably, Amazon’s efforts to improve shipping speeds have borne fruit, with over 50% of Prime orders in major US metropolitan areas being delivered within a single day during the second quarter of this year. This highlights Amazon’s commitment to offering faster Prime delivery services to its customers.
In addition to reinstating the company’s Shipping, the company is making changes to its fee structure for third-party merchants. Merchants participating in Amazon’s Seller Fulfilled Prime program will soon be subject to a 2% fee on each sale starting in October, in addition to the existing commission fees they pay to sell products on Amazon’s platform. This fee adjustment has drawn attention, especially as it coincides with looming antitrust concerns surrounding Amazon’s market dominance.
As Amazon resumes its shipping service and introduces fee adjustments for sellers, the e-commerce giant continues to make strategic moves to enhance its logistics operations and maintain its position as a leader in the online retail space.