Amazon is telling tens of thousands of marketplace sellers in the U.S. that it will buy their inventory at full retail price with the aim of trying to boost its catalog.
A new program is being rolled out where Amazon will buy products at full price from third-party merchants, then sell them to consumers across the globe, said the Fulfillment by Amazon (FBA) team in an email sent to sellers and one which had been reportedly obtained and viewed by the news company CNBC.
“For a limited time, there will be no additional fees, and we will purchase inventory from you at your local marketplace offer price,” the email said, reported CNBC.
Even if Amazon can’t make much money on the products in question, the latest move by Jeff Bezos to build up a complete catalog is this new program which follows a similar rollout in Europe. After the manufacturer has declined to distribute the products through Amazon, Amazon is approaching these third-party merchants in some cases.
Under the FBA program, merchants make use of the company’s supply chain and shipping operations and have their inventory stored in Amazon’s fulfillment centers by paying a fee to Amazon. The number of FBA sellers worldwide grew more than 70 percent, and they delivered more than 2 billion items in 2016 and therefore this has turned out to be a very significant part of Amazon’s e-commerce business.
Amazon wants to be able to deliver right away, anywhere in the world for items that are in high demand.
An Amazon spokesperson said that merchants can opt out of the new program at any time after confirming the authenticity of the email.
“When items are unavailable in a particular geography, we provide customers with selection from another marketplace,” the spokesperson said. “This offers customers a wider selection of great brands and helps sellers increase sales.”
But for sellers of particular brands, the program presents potential problems.
For example, its authorized retailers are not allowed to sell the company’s sandals to other resellers — including Amazon, by Birkenstock.
Due to the inability to weed out unauthorized distributors. Birkenstock does allow certain partners to sell on the Amazon marketplace and because of frequent counterfeits, Birkenstock announced that it would stop selling directly to Amazon last year.
The email was also sent to some merchants that sell only Birkenstock products. Such merchants reportedly forwarded the mail to the news outlet. Any Birkenstock sellers that participate in the program would be breaking their agreement with the company, Birkenstock USA CEO David Kahan said in a statement.
“If Amazon is in fact soliciting our accounts in order to acquire our products so that they may resell those goods, that causes a serious breach in our agreement with our existing retail partners,” Kahan wrote. “If indeed this is the case, we will take immediate action with any account that violates our agreement.”
Enabling merchants to have inventory stored in any of the region’s fulfillment centers at no extra cost and to sell their products across Europe, Amazon introduced Pan-European FBA last year.
(Adapted from CNBC)