For online retailers selling across multiple channels, including eBay, Amazon, BigCommerce, and Shopify, the opportunity to use a single third-party logistics (3PL) partner like Amazon’s Multi-Channel Fulfilment (MCF) makes perfect sense.
At Frooition, we always remind sellers that they don’t make money stuffing envelopes. Because the cost of running a warehouse can be prohibitive, it’s nearly always better to entrust your fulfilment to a third-party operator who can take advantage of economies of scale. 3PL companies, including FBA, Orange Connex, and Huboo, can also help smooth out the challenges of selling across borders and managing returns.
Amazon Multi-Channel Fulfilment (MCF)
With its massive network of fulfilment centres and the opportunity to ship goods in unbranded packaging, Amazon’s MCF service is a popular choice for retailers that already manage their stock using Amazon’s fulfilment services. However, following a recent announcement that Amazon will increase its MCF fees by upwards of 50%, many retailers will potentially have to re-exam how they fulfil goods sold on channels other than Amazon.
New MCF Fee Structure
From January 19, 2023, Amazon’s MCF fee structure for standard (5-day) delivery will be as follows:
- 2oz, single unit: $7.15: An increase of $2.40 (50.5%) on the current rate of $4.75
- 6oz, single unit: $7.15: An increase of $1.80 (33.6%) on the current rate of $5.35
- 1-2 lbs, single unit order: $9.50: An increase of $1.85 (24.2%) on the current rate of $7.65
Amazon’s MCF fee increases will be particularly hard to swallow compared to the shipping rate adjustments of 5.5% by USPS and 6.9% by UPS and FedEx, which will also come into effect in the coming weeks.
The End of Super Lightweight Pricing
The new fee structure will remove the option of super lightweight pricing, meaning that packages under 2oz will be brought into the 6oz weight category. This change will negatively impact sellers of low-cost items, with some sellers suggesting the move will prevent any item under $20 from being sold outside Amazon.