Pressure on Amazon Sellers Not Using FBA Will Only Increase

Pressure on Amazon Sellers Not Using FBA Will Only Increase

Amazon News

Effective later in the year Amazon sellers fulfilling their own shipments will be forced to accept all returns - items they sell will be "automatically authorized" for return. Previously customers needed to contact the seller, which had a chance to review the request, and in some cases refuse it or offer problem-solving advice.

This mimics the experience customers get when buying from Amazon itself, or from one of the sellers using Fulfillment by Amazon (FBA). In an attempt to put the customer first, Amazon is rethinking the rules of the marketplace, and reducing the customer-to-seller interactions.

Despite looking like a rushed changed by some, this program was being tested by a handful sellers in a beta program for more than 6 months. Some of them found it great, as it reduced administration overhead to manage return requests, allowed to track returns in Seller Central, and overall did not impact the return rate.

This change is a fix for the buying experience duality - a customer shouldn't have to do things differently when buying from different sellers. Walmart is having to deal with a similar issue too, as customers are confused about the difference of buying from Walmart itself or from one of the marketplace sellers:

"The issue for most sellers is managing expectations - many customers shopping on Walmart.com expect to be buying from Walmart itself. The marketplace is still a new concept and is creating confusion. The confusion for customers is that marketplace sellers and Walmart.com itself delivers different quality of service, something no doubt Walmart is working on."

A marketplace works best when there is a common level of buying experience. It doesn't need to hide that marketplace sellers exist, but it needs to make sure that a customer gets the same experience from all the sellers. This is why recently Etsy forced all sellers to enable Etsy Payments, and eBay is launching guaranteed 3-day shipping. These sort of programs allow to deliver a consistent experience.

Fulfillment by Amazon (FBA) has been key for both Amazon's and the marketplace growth. From the customer point of view everything about buying from Amazon itself, or from one of the sellers using FBA, is the same. Shipping price, shipping time, returns, etc. is all a shared experience.

"Many Prime customers are used to two-day shipping. When products are coming from Amazon warehouses, Amazon can be fairly confident that shipping time will meet those expectations. Thus Prime customers are very likely to be shown not the cheapest price, but instead the price which offers Prime shipping. For marketplace sellers this means that unless you are using Fulfillment by Amazon (FBA) for inventory, many customers won't see your offer."

We wrote this when talking about why the buy box is not always the lowest offer. The buy box is quantifiably preferring Amazon first, FBA sellers second, and then seller-fulfilled sellers. This can be seen as unfair by some, but it builds on the idea that most customers want consistent and reliable experience, instead of chasing best possible deal.

As much as this change has caused an outburst of anger in seller forums there is going to be more of these in the future. Amazon sellers not using FBA will only face greater pressure from Amazon - assuming their are not stopped from doing this by regulators - to offer the same experience as FBA sellers. Amazon has always put customer experience first, and in this case they do that too.

Below is the original message sent to sellers:

Dear Seller,

Amazon is simplifying the returns process on items fulfilled by sellers. Starting October 2, 2017, returns of items that you fulfill and that fall within the Amazon returns policy will be automatically authorized. Customers will be able to print a prepaid return shipping label via the Online Return Center instantly.

We are also introducing 'returnless refunds,' a feature that is highly requested by sellers. If you so choose, you will now be able to set rules and automatically issue a refund without requiring an item to be shipped back to you. Sellers have requested this because, in many cases, it allows you to save on both return shipping and processing costs.

We hope these changes will reduce the effort required to manage your returns and decrease your customer Return Dissatisfaction Rate (RDR), thereby improving your ratings. Additionally, you will have full visibility into the end-to-end return process through shipment tracking information located on the Manage Returns page in Seller Central.

Below are a few key details:
1. You are required to have a return address on file. If you want to specify a separate return address, please update your information in Seller Central (https://sellercentral.amazon.com/gp/on-board/configuration/global-return-address/index.html). If you have not specified a return address by October 2, your business address will be used as the return address.
2. You are required to issue a refund within two business days of receipt of a return. If you do not take action regarding the refund request, Amazon may refund the customer on your behalf and charge the amount to your seller account.
3. You might be responsible for the cost of return shipping in accordance with Amazon's policies.
4. Certain items are not eligible for prepaid return shipping. You can request exemptions for specific items in your inventory after August 31.
5. You can appeal return disputes directly to Amazon.

To learn more, visit the Prepaid returns for seller fulfilled orders help page: https://sellercentral.amazon.com/gp/help/202072200

Early participants have seen RDR go down by an average of three times after offering prepaid return shipping. If you would like to begin offering automatically authorized prepaid returns to customers before October 2, please respond to the survey below by August 11 to on-board by August 25.

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