Outlook: Amazon Management Gets More Ambitious

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Amazon Fresh

Amazon.com (NASDAQ:AMZN) will increase the monthly fee and transaction fee its charges for webstores on February 4. Fees are charged to third parties for the privilege of maintaining a store front that can be accessed via the Amazon.com website or for listing products on the Amazon.com website; many national and international brands maintain store fronts on the site, and countless private businesses sell goods listed on the site under “Selling on Amazon.”

Amazon currently charges a $39.99 monthly subscription fee for webstores, referral fees for Selling on Amazon, and transaction fees for each item sold. The monthly subscription fee will increase to $79 from $39.99 for webstore only and to $79 from $0 for webstore plus Selling on Amazon. The fees for Selling on Amazon are as follows: a referral fee for each item sold, a variable closing fee for each media item sold, and a $0.99 fee per item sold for individual selling plans (as opposed to professional selling plans). In addition to the subscription fee increase, the transaction fee for webstore plus Selling on Amazon will increase to 2 percent of sales proceeds from 1 percenr, with webstore only remaining at 2 percent.

An Amazon webstore benefits retailers by driving traffic, integrating with Checkout by Amazon, and allowing fulfillment by Amazon. Webstores facilitate easier and quicker sales to Amazon’s large customer base, including its “tens of millions” of Amazon Prime members worldwide who agreed to pay $79 per year for expedited shipping, among other perks. This expedited shipping, in addition to signing-in using Amazon credentials, becomes available to the consumer who purchases from an Amazon webstore, a key differentiator as online purchases from non-Amazon websites can take a week or more for shipping alone.

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