Amazon is already preparing for the holiday rush
Amazon is restricting access to its warehouses for merchants new to Fulfillment By Amazon (FBA) ahead of the holiday season, reports Bloomberg.
Merchants that sign up for FBA in the coming months cannot send inventory to Amazon warehouses until December 19. Amazon is likely trying to ease pressure on its fulfillment centers in the runup to the busy shopping season in order to avoid any potential delivery pitfalls and subsequent consumer frustrations.
Retailers are at a much higher risk when it comes to fulfillment over the holidays. Consumer deadlines for holiday gift-giving and inclement winter weather make fulfillment difficult, which can lead to shopper dissatisfaction. Amazon's decision to mitigate the flow of incoming inventory can help its merchants maintain customer satisfaction and loyalty by minimizing the risk that a delivery will be late. However, it also has potentially negative implications for Amazon as the restriction could deter merchants from using FBA.
Online merchants need to meet consumer demands this holiday season. E-commerce holiday sales are expected to grow 25% year-over-year (YoY), according to a report from PwC.
Meanwhile, consumer standards are rapidly rising as to what constitutes "fast shipping," and fulfillment experiences have the potential to impact whether or not shoppers will return in the future.
Although Amazon's restriction can boost consumer confidence for its existing FBA members, new and potential ones are at a disadvantage. Restricting access to this service at such a high volume period for retailers could encourage some online merchants to look elsewhere.
The parcel delivery industry — a segment of the shipping sector that deals with the transportation of packages to consumers — is booming thanks to e-commerce growth, and players outside the industry want a piece of the pie.