HD - Selling Profitably on Amazon Becomes Even Harder | Benzinga
For anyone involved with selling through Amazon (NASDAQ: AMZN), I recommend going through the latest newsletter published by Cartograph, a company that helps brands sell profitably on Amazon. I interviewed Chris Moe, Cartograph's CEO, on past The Stockout shows. Those discussions impressed upon me that brands must understand, and play by, Amazon's numerous and frequently changing rules in order to sell profitably through the online giant. Now, Amazon is changing its policies for inventory placement within its fulfillment centers while also adding low-inventory fees. Both of these changes to fees seem to more heavily penalize smaller brands that are more likely to use smaller shipments and those that sell lower-value items, including CPG items.
Inventory-placement fees potentially punitive to LTL shipments:
What stood out to me in Cartograph's writeup is the dramatic changes to potential fees associated with LTL shipments, which, in some cases, could rise from the low to mid-$100s to $2,000 or more per shipment. That could encourage some brands to consolidate LTL shipments into larger truckload shipments, but, according to Cartograph, that's not necessarily better because Amazon will still rebalance inventory between warehouses at brands' expense.
Low-inventory fees to impose explicit cost on de-prioritizing Amazon as an inventory channel:
New fees will be imposed for having less than 28 days of inventory, calculated weekly as average days of supply over 30- and 90-day periods. When ...