Capterra – which describes itself as “a free online marketplace vendor serving as an intermediary between buyers and technology vendors” – is out with its 2022 Amazon Seller Survey, which suggests that “while just 31% of surveyed FBA (Fulfillment By Amazon) users currently sell on eCommerce marketplaces other than Amazon, 99% intend to sell on other marketplaces in 2023, including Google Shopping, Facebook Marketplace, and Walmart Marketplace.”
Here’s the rationale:
“Amazon has again raised fees for its third-party sellers, in response to the rising cost of eCommerce logistics. This time, it’s through a new holiday peak fulfillment fee for Fulfillment by Amazon (also known as FBA, Amazon’s sprawling in-house fulfillment service that makes Prime same-to-two-day delivery possible).
“While fee hikes are nothing new for FBA users, especially since the beginning of the pandemic, small retailers may be approaching the end of their rope … Nearly half of small retailers on Amazon say recent fee hikes will make their business less profitable.”
The argument is that “the increasing cost of using Fulfillment by Amazon is a risk to Amazon, given sellers’ reliance on FBA and customers’ expectations for low prices and fast shipping. By making it more expensive for sellers and consumers to participate in its marketplace, Amazon is opening the door to rivals like Walmart, which offers similarly convenient shopping and selling experiences at a lower cost.”
KC’s View:
Are we getting to a tipping point where some of Amazon’s e-commerce dominance may be diminished? It kind of feels that way to me … it is likely to happen slowly, maybe even imperceptibly at first, but I have this sense that there’s something happening.
I suggested in our Innovation Conversation predictions segment this week that Jeff Bezos will return to Amazon as CEO in 2023. The more I think about it, the more it comes back to this – Andy Jassy, the current CEO, is in the unfortunate position where he is battening down the hatches, patching holes, and shoring up defenses as Amazon deals with significant headwinds. The question is whether, under these circumstances, Amazon is able to innovate and grow to the degree it needs to so that its influence and roles in our modern life remains undiminished. If attention is steered away from shopper-centric innovation and toward operations-focused efficiency, the ground will have been prepared for a Bezos return.
That’s my prediction, and I’m sticking to it.
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