Fulfillment by Amazon hooks more marketplace sellers

October 12, 2016 09:42 AM

More of Inc.’s marketplace sellers are using Amazon’s fulfillment services, in part because of Amazon Prime’s popularity.

In September, 40.6% of the value of goods sold on Amazon’s marketplace by ChannelAdvisor Corp. clients was handled through Fulfillment by Amazon, up from 33.7% in September 2015. ChannelAdvisor produces monthly reports that compare merchant clients’ sales through online marketplaces and marketing channels, including Amazon, eBay Inc. and Google Shopping.

Amazon Prime, the $99 annual subscription service that provides customers with free two-day shipping and such perks as streaming video and music, is pushing more sellers on Amazon’s marketplace to use Fulfillment by Amazon. With Fulfillment by Amazon, merchants ship their goods to one or more Amazon warehouse and pay Amazon to store them. Amazon then picks, packs and ships those goods when consumers purchase them from the sellers. When marketplace merchants use Fulfillment by Amazon, their products become eligible for Prime shipping.

“Our data indicates that more retailers are adopting Fulfillment by Amazon for shipping and handling and to stay in front of the Prime consumer,” executive chairman Scot Wingo said in March. “If you’re not using FBA, you’re likely losing share.”

Separately, Amazon this week began restricting shipments from new-to-FBA sellers, saying if a new FBA seller had not completed its first shipment before Oct. 10, it would have to wait until Dec. 19 to do so. The e-retailer said it wanted to "have the capacity necessary to receive and store inventory and to ship products to customers quickly." The service suspension period covers the busiest parts of the holiday shopping season. Learn more here.

Amazon, No. 1 in the Internet Retailer 2016 Top 500 Guide, allows marketplace sellers to use its fulfillment services for sales through other channels, such as a retailer’s own website and other marketplaces like those operated by eBay. ChannelAdvisor tracks whether the products fulfilled by Amazon were Amazon sales or sales on other sites, which the vendor calls “non-Amazon.” Of the gross merchandise value fulfilled by Amazon, 2.2% was not fulfilled for Amazon sales in September 2016, according to the report. That’s down from 3.0% in the same period a year ago.

“We are hearing from some customers that Amazon is discussing sun-setting this option,” Wingo wrote in a blog post. Amazon has not announced plans to discontinue fulfillment services for sales on other websites.

Same-store sales for ChannelAdvisor’s clients through increased 11.6% year over year in September, up from August’s 10.5% and July’s 6.4% growth rates.

Sales through eBay were up 4.0% in September compared with the same period a year ago. Auction sales declined 30.1% year over year and sales of fixed-price goods increased 2.0% in September. EBay Motors, which includes purchases of auto parts and accessories, increased 12.6% from the year-ago period.

Sales on marketplaces that aren’t Amazon or eBay, such as marketplaces operated by Wal-Mart and Sears Holdings Corp., increased 28.7% in September compared with the same month a year ago. The growth of Wal-Mart’s marketplace and is likely contributing to the big jump.

Sales though Google Shopping and Product Listing Ads increased 51.7% year over year in September. Conversion rates on Product Listing Ads declined to 2.02% in September 2016 from 2.49% in September 2015. Average order value increased 2.7% to $119.27 in September 2016 from $116.18 a year ago.




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