Amazon Retools with Unusual Goal: Get Shoppers to Buy Less | Hacker News Reader

Amazon Retools with Unusual Goal: Get Shoppers to Buy Less

wsj.com

44 pointslxm59 comments

To lessen the burden on warehouses, Amazon has been contacting its third-party sellers and encouraging them to ship items themselves rather than through its “Fulfilled By Amazon” program, said people familiar with the matter. Sellers pay a fee to Amazon to be part of the program, and Amazon has spent years trying to expand this service. But with its delivery network taxed, the company is opting to forgo the fee in the interim, one of the people said.

The fee to participate in FBA via Amazon Seller Central is $40 per month. Eliminating that fee is a drop in the bucket to most medium to large volume sellers, who now have to contend with extra shipping costs if they ship FBM (M = Merchant) or the even more expensive "Seller Fulfilled Prime" in which seller is responsible for getting the goods to customers in two days.

What Amazon should be doing to encourage more FBM sales is reducing the per-item fees associated with each order, or adding other incentives.

Another side effect of having sellers ship FBM are millions of orders are going through the US Post Office instead of Amazon's transport network or UPS. The USPS needs that package revenue, with junk mail down sharply and some in Washington calling for the service to be privatized (https://www.vox.com/2020/4/12/21218151/usps-bailout-privatiz...).

Wait, I don't understand. So sellers pay Amazon a fee to use FBA, Amazon wants to discourage FBA right now, so Amazon has removed the fee... thereby eliminating that miniscule barrier to using FBA?

There is a small, nominal fee for FBM, Fulfilment by Merchant. This is distinct to FBA.

So they are dropping the FBM fee, not the FBA fee? That's not what the quoted text indicated. I can't read the article to see if the context changes the meaning.

(i think) when OP says "eliminating that fee is a drop in the bucket", they mean that sellers who switch from FBA to FBM would no longer need to pay (eliminate) the FBA fee... but saving $40/yr isn't much of an incentive when you suddenly have to deal with all your shipping yourself.

I wonder if one of the ways they are trying to lessen demand is by showing over-estimated delays in shipping. I've gotten every recent order delivered much faster than estimated at the time of purchase. (Sample size about n=5)

Still waiting on my desk chair to ship after 10 days with an estimate of May 4-5. It was "out of stock" when I ordered, then immediately "in stock" after. That probably has something to do with the delay.

When that happens just cancel your previous order and start a new one. Have done that a few times

I don't order often enough to justify Prime, so the wait so far isn't much worse than normal. Not being able to sit at my computer has given me some much-needed perspective on how I use it, so it's not all bad.

Likewise, I ordered some stuff with 2 day shipping about 10 days ago and it's still slated to arrive in 3 weeks. Hopefully it's a little sooner than that, because every other thing I needed for this project (including a king size mattress) shipped in under a week, and it's just sitting around unused.

That seems to be the case, as most of my orders have been way ahead of schedule. I did have one random case that was estimated for a couple of weeks and did take nearly the whole amount, though. It wasn't out of stock or anything either.

I think it's probably more just uncertainty on their end. They're upping the delivery estimates to cover their ass for the ones that get delayed. Anecdotally I have had the same experience of items arriving in around normal prime shipping time while having estimates weeks to a month out.

Placed an order 2 days ago. Delivery date was set for May 7th. It's out for delivery today.

Yes, I believe this to be the case. I'm an Amazon seller. We also sell through our own website. We use Amazon to fulfill those orders as well. For those orders, Amazon gives us an estimate of when it will ship and when it will deliver. So far, they have been essentially 100% accurate (and occasionally a day early) with these estimates, without any delivery times being pushed out 2-3 weeks. That being said, some warehouses/regions seems to be experiencing longer delays than others. Sometimes we put in a fulfillment order and it will ship same day and get delivered in 2 days. So, totally normal. Other times we put in a fulfillment order and it won't ship for 4-5 days and/or it'll take 3-4 days to deliver.

So it appears to me that Amazon knows exactly how long it'll take to get products to you, and lead times are nowhere near the 2-3 weeks that they're showing to customers. The conclusion has to be, I think, that they're doing this to reduce demand.

The other way I think they're reducing strain on their warehousing infrastructure is by preferentially showing Fulfilled By Merchant (FBM), as opposed to Fulfilled By Amazon (FBA) listings in search results. We've been seeing this as well.

Just curious, do you fulfill the orders from your website via Amazon automatically?

Interestingly enough, here in Germany (for least the products I looked at) they still show the estimates as usual, with a note that it might take longer due to the current situation.

I've made my contribution by not ordering anything from Amazon. Though pretty much every ecommerce site of any significance is stressed to the max right now. And B&H is, as usual, closed for Passover. Still trying to support local businesses as much as I practically can.

> Still trying to support local businesses as much as I practically can.

how are supply chains for local businesses. My neighborhood corner grocery story is almost empty. Not sure what is going on.

My independent, neighborhood grocer (am almost unheard of type of business these days!) has been better stocked on the very few occasions I have gotten out. I don't have a ton of comparison points, unfortunately. For example, when it comes to dry goods like beans or flour, the small local grocer could repackage and rewrite the vast industrial size containers I'd these products, and continue selling product where the larger chain grocers must rely on their suppliers to repackage to smaller amounts.

I'm crossing my fingers that the two SSDs I ordered in B&H's last order window ship today because their stores are closed and the warehouses are on reduced hours.

Always buy from good small businesses first (vote with your wallet). Megacorps are unfortunately a practical, but depressing, evil last resort.

Btw, Instacart (YC S12) works here in Paradise, CA with a smaller chain discount grocery store! :) (Local CVS ((still listed on IC)) closed due to loss of customers, there is a Walgreens franchise in-town ((not on IC)) and CVS delivers medications by mail for free right now.) And our most recent shopper was lightning fast and a good shopper too.

> Always buy from good small businesses first (vote with your wallet). Megacorps are unfortunately a practical, but depressing, evil last resort.

Not to be a downer, but if you're looking for _good_ businesses, B&H is likely to score no higher than Amazon by most criteria. They:

- Don't pay appropriate sales tax: https://www.theverge.com/2019/11/14/20964980/b-h-photo-taxes...

- Discriminate against Hispanic workers: https://www.cnn.com/2016/02/29/us/bh-photo-lawsuit/index.htm...

- Discriminate against non-Jewish employees: https://www.jpost.com/diaspora/new-lawsuit-claims-b-and-h-di...

I noticed that all of your supporting evidence is articles talking about allegations made in lawsuits. What were the results of these suits? Were any of the claims substantiated?

I believe the tax lawsuit is still pending, the most recent documentation I can find from the NY AG is a summons from mid-November of last year: https://ag.ny.gov/sites/default/files/2019.11.14_nyag_v._bh_.... There is a corresponding press release from the NY AG office: https://ag.ny.gov/press-release/2019/attorney-general-sues-b...

The 2017 case was settled (https://www.dol.gov/newsroom/releases/ofccp/ofccp20170814), with B&H agreeing to pay $3.2mm in back wages and "hire a workplace consultant to correct its employment practices and conduct"

They settled a similar 2007 case by distributing $4.3m in monetary relief: https://compensation.blr.com/Compensation-news/Performance-T...

My point is not that B&H is bad, but that "support small business" doesn't mean that you're supporting an ethical business.

B&H didn't collect sales tax in the past in NY where they are based, which is what the lawsuit is about.

They started collecting sales tax in NY after that lawsuit was filed, and they started collecting sales tax in more states after the Wayfair SCOTUS case in 2018 authorized states to charge sales tax on internet sales.

> Though pretty much every ecommerce site of any significance is stressed to the max right now

This is certainly not the case for clothing retailers.

Yeah, I suppose no one is really worrying about dressing up right now.

It's also difficult to return items.

My new power tool arrived in just its own original mfg box. Instead of being reboxed by Amazon.

Maybe because of FBA? (Reviewing the order details, I can't figure it out.)

Whatever the reason, woot! Less is more.

We had something back-ordered on Amazon (from before all this crazyness happened) and it eventually arrived in a Sam's Club box

That's happened in the past with items I've ordered, as what appears to have been part of an arbitrage scheme - list items on Amazon that Walmart.com sells for less, and when you get an order, reorder it from Walmart.com with the Amazon buyer's shipping info. Every time it's happened and I've checked prices on Walmart.com, they've been ~20% lower than what I actually ended up paying. Seems like a cute little grift, all in all.

> Whatever the reason, woot! Less is more.

Agreed, I'm sick of the russian nesting dolls game with amazon boxes

I have noticed a higher frequency of this happening in the past year. I'm happy about it, there's no need to put an additional box around most items that already come in a cardboard box.

From what I read Amazon has been actively pushing manufacturers in this direction. Saves on packaging material and labor costs. They can automate even more of it.

I’ve started looking to ebay and Newegg a bit more.

However these days Newegg seems to be more a marketplace for Chinese sources and proxies of Chinese sources.

Ebay has been okay, though sometimes they don’t even get the goods into the transport network until after it was promised to be delivered.

Why not just raise prices on non-essential products? That will decrease sales and increase profits. Everyone wins that way: the folks who need essential products win, because the bandwidth available for their needs is increased; the sellers win; Amazon wins; and people who want non-essential products and are willing to pay for them win because they can still get them.

The people who want non-essential products but cannot or do not want to pay the current price do not win, but they are no worse off than being unable to buy at all.

While that would probably work, it may not be legal: https://en.wikipedia.org/wiki/Price_gouging

Is Uber surge pricing price gouging?

I'm not certain, but I think it would only be considered price gouging if it were in response to an emergency.

It might also be price gouging in response to a shortage but I think that "shortage" in that case would more mean something like "the NYC subway is completely shutdown" rather than just rush hour or after a concert ends.

Some people think so!

But price gouging is usually defined as being in response to emergencies, which a pandemic is and a sharp spike in Uber demand may (a tsunami) or may not (bars closing at 2am) be.

Unfortunately, some people tend to think so.

uber surge pricing might actually be a good thing in an emergency. unlike buying all the hand sanitizer at your local CVS to resell, it can actually increase the "supply" of drivers. of course, if this saturates the road capacity, it might be a net negative.

>> Price-gouging is often defined in terms of the three criteria listed below: A) Period of emergency...B) Necessary items..., C) Price ceilings

I would think "Non-essential" is the negation of "Necessary".

From the first line in your link.

"Common examples include price increases of basic necessities after natural disasters."

The parent post specifically said non-essential products.

The law is tricky, varies by state, and I think people are worried about falling on the wrong side of it. For example, here's what NJ uses to describe which goods are covered: "which is consumed or used to preserve, protect, or sustain the life, health, safety or comfort of persons or their property". This could include many things we consider "non-essential".

Additionally, they're probably worried about public perception, even if it might be strictly legal.

So if you sold at an auction like eBay would that be illegal?

eBay thinks so: https://www.ebayinc.com/stories/news/we-are-actively-removin...

> non-essential

Amazon already has a classification for this. correct?

It seems like they are out of most essential products, though?

Why do you assume that profits would increase if purchases went down and price went up?

They are trying to reduce sales of non-essential products by X% without raising prices; my suggestion is to raise prices until sales naturally reduce by X%. Since in both instances sales are reduced to the same number but in my scenario prices are higher, my scenario leads to increased profits versus their current approach.

Granted I didn't phrase it particularly well.

Raising prices in response to natural disasters is a really bad move for a company's reputation, regardless of how logical it may seem. And Amazon is already under a lot of scrutiny by the public and politicians. The last thing they need to do is affix a very large target to their back.

https://archive.md/hbzHu

IIRC paywalled sites without workaround are not allowed on HN. The link should be changed to an alternative source. Here is one:

https://nypost.com/2020/04/16/amazon-wants-customers-to-buy-...

Regarding the content: Wouldn't it make more sense for Amazon to simply show products that are fulfilled by the seller directly? This way they could still make their cut but do not have to do the delivery.

And with more detail, including the closure of five Amazon distribution centres in France: https://arstechnica.com/tech-policy/2020/04/amazon-closes-wa...

Here’s the workaround for WSJ: https://news.ycombinator.com/item?id=16906571

Fyi... the above workaround with Google/Facebook acting as referrer/redirect for the url hasn't worked in years. And especially if the browser has already visited WSJ a few times and hasn't been restarted with a fresh session. Notice in the following video that browser status bar says "Incognito" and yet the Facebook redirect still doesn't work:

https://imgur.com/a/LKHW9OB

The "?mod=rsswn" also doesn't work anymore. Disabling javascript doesn't work either. Popular sites like NYTimes and WSJ do more sophisticated things than just checking cookies. My memory fails but I think the last time I looked at this, the sites sniffed HTML5 local storage or something not obvious.

[I didn't downvote your comment.]

This adtech arms race is ridiculous.

The link shouldn't even resolve if they require paying customers, unless signed in.

Huh. It worked for me just now, with this very article. The one catch is I need to go into private mode.

Workaround: http://archive.is/hbzHu (archived copy)

Reply on news.ycombinator.com