Beginning on July 1 Amazon.com, Inc will drastically reduce the fees it charges merchants to sell items such as screen protectors, USB cables, and other small flat products that can easily fit into an envelope. This move is a direct competitive threat to giant companies it competes with like eBay, Alibaba Group Holding Ltd, and Wish.com that bring Chinese sellers together with US buyers.
Prices to ship three, flat, 1-ounce packages will be cut by 67 percent, costing only $1.61. Shipping fees for wider items more than half an inch thick will cost more.
Amazon is worried about losing marketplace volume to Alibaba and others since merchants can just sell on there and ship to customers through ePacket,” said Jarrett Streebin, chief executive officer of EasyPost, a San Francisco-based company which assists retailers with shipping labels and tracking for delivery companies.
The ePacket program is an agreement between the US Postal Service and The Chinese post which allows Chinese merchants to ship their products cheaply across the US for small packages weighing under 4.4 pounds. Chinese sellers on Amazon can also ship their own orders using the ePacket program, which translates to less money for Amazon on each sale, since it is no longer handling the packing and delivery.
“China-based merchants sell the most small and light packages,” said Neil Ackerman, a former Amazon executive who started the small and light program and now heads e-commerce initiatives at Mondelez International. “Amazon will continue to invest in this space to increase inventory and lower costs for its customers. There will be no reason for shoppers to go to other marketplaces.”
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