Merchants who sell their products on Amazon.com, Inc.‘s website but manage the fulfillment and delivery of those goods cannot use the U.S. Postal Service’s (USPS) Priority Mail one- to three-day delivery service unless they purchase the postage from Amazon, according to several analysts with merchant clients that are subject to the edict.
According to one consultant, Amazon stands to benefit financially through “postal arbitrage,” in which it leverages the difference between the prices it charges and the low rates it receives through its Negotiated Service Agreement (NSA) that high-volume users strike with USPS. In addition, Amazon’s NSA likely includes “tiered incentives” that promise even deeper discounts for the e-tailer in return for more volumes tendered to USPS, the consultant said.
But there is a larger element at play. According to two consultants, the move is part of Amazon’s effort to force merchants into the e-tailer’s Fulfillment by Amazon (FBA) network, in which Amazon manages customers’ supply chains for a fee. The self-fulfillment service, Seller Fulfilled Prime (SFP), allows merchants to choose their own logistics partners and retain “Prime Merchant” status as long as they hit one- to two-day delivery targets 98.5% of the time