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How Will Amazon’s Split-Shipment Policy Affect Sellers

January 18th, 2012 by Skip McGrath

A couple of days ago, amazon announced a new policy that will force sellers to split their shipments between warehouses.  The idea is to get merchandise closer to customers to lower Amazon’s shipping costs (while raising ours).  I have had a ton of email from upset sellers –but this is just one of those things we can’t do anything about.  Large companies like Amazon and eBay always look at their bottom line before they look at your bottom line and I don’t see that changing anytime soon.

The Amazon Prime program has been hugely successful for Amazon, but the free 2-Day shipping is very distance sensitive.  Placing inventory at multiple warehouses is a big cost saver for Amazon.  So yes this is a pain for sellers and will cut into our profits, but for now, my profits are so high on Amazon that I am not about to leave over something like this.

Here are the details of the Amazon announcement:

Dear FBA Seller,
Effective February 25, 2012, inventory may be assigned to multiple fulfillment centers at the ASIN level during the shipment creation process to help better position it to reach customers at the delivery speeds they choose. We anticipate that both you and customers who purchase your products will benefit from this change, including for the following reasons.

  • Products located in multiple fulfillment centers can gain a competitive advantage over products located in a single fulfillment center. Order cut-off times for Prime and expedited shipping can be extended by as much as three hours with inventory in multiple fulfillment centers, so your offers will more likely be available for last-minute orders in more locations.
  • Products can be available for fulfillment to customers sooner than if you shipped them to one fulfillment center, and we then transported them to other fulfillment centers.
  • The impact of regional and local events on your products will be reduced. Events such as snowstorms, flooding, and earthquakes can disrupt transportation in a region or local fulfillment center. Having your inventory in multiple locations during these events increases our ability to ship orders to customers on time.

Please visit Inventory Placement for more information. If you still have questions, please contact Seller Support (sign in required).
Thank you,
Fulfillment by Amazon Operations

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