Dive Brief:
- Amazon sellers offering Premium Shipping options will have to adjust to new on-time delivery requirements starting next month, according to an announcement May 12.
- Premium Shipping enables sellers to provide one-day and two-day delivery to shoppers using their own shipping methods, rather than Amazon's in-house network. Sellers need to maintain an on-time delivery rate of 97%, evaluated on a 30-day basis, to stay eligible.
- On June 29, the delivery requirement will drop to 93.5% and performance will be reviewed on a weekly basis. Shippers that don't meet a particular Premium Shipping parameter will receive two warnings before being booted from the program on the third infraction for that requirement.
Dive Insight:
Although Amazon softened on-time delivery targets for Premium Shipping, sellers in the program have clear incentive to maintain strong performance.
"Under the new cadence, a single bad week can put you on notice, and three such weeks in a month spells immediate removal from Premium Shipping," Indy Pereria, head of people operations at fulfillment provider Cahoot, said in an analysis of the changes. "You’ll need more consistent performance throughout each month, not just a healthy 30-day aggregate."
Maintaining a high level of performance could entail using reliable carriers for Premium Shipping and collaborating with them effectively. Setting clear expectations, providing volume forecasts and having regular conversations on performance are among the ways shippers and carriers can work together to ensure strong service, experts said during a May 7 Supply Chain Dive and Retail Dive event.
Premium Shipping sellers must use UPS, the U.S. Postal Service, FedEx or OnTrac for the bulk of one-day deliveries and all two-day deliveries, according to Amazon's website.
Amazon also plans to adjust various Seller Fulfilled Prime requirements on June 29. The program allows sellers to independently handle fulfillment and still be able to display Amazon's coveted Prime badge on their products.
One change will be Amazon's implementation of minimum shipment requirements for Seller Fulfilled Prime users. Sellers who have not shipped at least 100 packages through the program per month, or have not shipped consistently through the month, will face a daily limit on maximum Prime order volume. That limit will end once the 100-package threshold is reached and Prime packages are shipped consistently.
"We have observed sellers are best equipped to meet these requirements when they are frequently fulfilling Seller Fulfilled Prime orders, and as such we expect you to consistently demonstrate that you can meet all Seller Fulfilled Prime program requirements regularly," Amazon said on its website.
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