UPS decreased rates for sellers who purchase and pay for UPS shipping labels on Amazon’s Buy Shipping platform. “Avail reduced UPS 2nd Day Air rates to increase your Prime shipping coverage and utilize UPS Ground rates for regional Prime and standard orders,” Amazon advised sellers.
But some sellers link their carrier account (with negotiated rates) in Seller Central, so sellers were perplexed about whether the lower UPS rates were cheaper than their own negotiated rates, and how they would make that determination when buying labels on Amazon Buy Shipping.
One seller asked, “My UPS contract rates are attached to Buy Shipping. If Amazon pricing is less than my contract price, which one do I pay?”
For those who aren’t familiar with Buy Shipping, “Amazon allows approved merchants to ship their Amazon Self-Fulfilled Prime orders by purchasing shipping labels from Amazon,” this help page from ShipWorks explains.
To further explain: Seller Fulfilled Prime – known as SFP – is the Prime program that allows sellers to deliver directly to domestic Prime customers from their own warehouse. In other words, it’s like FBA in that items display the Prime badge on Amazon where applicable, but without the seller having to use Amazon’s fulfillment services. Because Amazon allows the Prime badge on SFP listings, merchants are required to meet the very strict Prime delivery timelines.
After reviewing a discussion generated by the announcement about UPS rates, a seller wrote, “One thing that this thread has made clear to me is that the Buy Shipping cost calculator needs to be set up so that it will list the rates separately when you have a linked account. That way you can pick the cheapest rate regardless of if your account or Amazon’s rate is cheaper.”
One reason to use Seller Fulfilled Prime is to appeal to Prime shoppers and gain that extra visibility on the Amazon marketplace. ShipWorks, which supports Amazon Buy Shipping, shared some pros and cons of using SFP for merchants who use its service:
Advantages:
- You avoid Amazon’s fulfillment, monthly storage, long-term storage, removal, and referral fees.
- More options on your fulfillment.
- You can track packages in ShipWorks.
Disadvantages
- Amazon has very strict requirements.
- Larger profit margins (needed) to meet the two-day requirement.
- There is a lot to figure out because warehousing and fulfillment is all on you. You have to be efficient and have a good quality control system in place because when problems arise, you’re ultimately responsible.
One key takeaway from all this: UPS is continuing to make efforts to appeal to small- and medium-sized businesses and is using ecommerce partners to do so.
