How Will Increasing Fulfillment Fees Impact Your Business This Year?

By December 3, 2018Blog

As more marketplace sellers become dependent on fulfillment services to provide easy and seamless shopping experiences for their customers, the impact of ever-increasing storage, shipping, and other fulfillment fees is creating ripple effects across on the e-commerce industry. Though these changes to fulfillment fees reflect the growing industry trends for “free” and faster deliveries, we wanted to compile these changes that sellers can expect in 2019 and hopefully aid them in their business planning. Before addressing these updates, know that sellers who utilize Newegg fulfillment services can rest assured that their costs will remain consistent, be reliably lower than the competition, and stay focused on the best interests of our sellers. 

What rising fulfillment fees can sellers expect in 2019?

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USPS:

USPS will be raising Priority Mail rates by 9.3% beginning January 2019. Other fulfillment fee increases that affect e-commerce sellers is the Traditional Parcel Select (9.3%) and Lightweight Parcel Select (12.3%). For sellers who also cover return shipping, this can be especially impactful. As if these changes weren’t enough, the price of a first-class stamp is planned to increase by 10%, bringing the price to $0.55.

FedEx:

Also beginning in January, FedEx will be raising their shipping rates by an average of 4.9% for its Ground and Home Delivery categories – the primary class for e-commerce shipping. Be mindful that while we are listing the average, depending on the shipping category, sellers can see as much as an 8% fulfillment fee increase.

Amazon:

The above-mentioned upticks in fees through USPS is expected to have a serious impact on one of their top customers – Amazon. This change in rates is predicted to cost Amazon an additional $400 million to $1.1 billion. Sellers using Fulfillment by Amazon (FBA) already experienced sizable increases in fees for inventory, long-term storage, and minimum long-term storage in 2018, so these sellers should be cautious of potential fee increases to adjust for these new costs.

What does this mean for your business?

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Because shoppers are incredibly savvy and sensitive to even minor pricing increases, it presents serious challenges to e-commerce sellers who are already squeezed to maintain market share and margin. As more sellers scale their business to adjust with market trends and to expand cross-border, the need for fulfillment services is unavoidable. While these services offer increased business opportunities, fulfillment providers that frequently change costs and implement new fees create an unstable business relationship for sellers who are reliant upon them. Some changes cannot be controlled or foreseen within the logistics industry, but it is necessary that sellers partner with reputable fulfillment providers who share the same business goals and offer solutions to mitigate these changes.

What fulfillment solutions does Newegg offer?

At Newegg, you’ll find that our fulfillment rates are up to 18% lower than the competition. Further savings come from Newegg’s commitment to not raising our fulfillment fees for 2019, which encourages a better, more predictable bottom line for our sellers.
It is Newegg’s goal to create programs that fit the diverse needs of marketplace sellers. Whether it be for sellers who choose to ship on their own, or for those who strive to sell internationally, Newegg offers services that can positively impact almost any of our sellers’ businesses.

Shipped by Newegg (SBN)

Shipped by Newegg (SBN) was created to address the 360-degree fulfillment needs of marketplace sellers. With a focus on cost-effective fulfillment that picks, packs, and ships on a seller’s behalf, SBN allows merchants to focus on the more important aspects of their business. SBN was designed for sellers who want to free up resources and warehouse space by having Newegg handle all the warehousing, shipping, and customer service duties. Our 24/7 multilingual customer service teams are adept in handling and resolving the diverse inquiries and issues of customers – all on sellers’ behalf. Sellers enrolled in SBN see average savings of 18% on shipping, 5% lower inbound rate fees, and a pick and pack fees of at least 5% less when compared to leading competitors.

Shipping Label Service

Another example of a Newegg fulfillment tool is Shipping Label Service. Created for sellers who prefer to ship and handle inventory themselves, this service provides an alternative, cost-effective shipping service compared to other 3rd party shipping services. Shipping Label Service passes along Newegg’s discounted — and locked in— partner rates onto its sellers. Once an order is placed, Newegg will provide the seller a print-ready shipping label. From there, sellers simply attach the label to the package and ship out.
shipped by newegg, sbn, newegg return service, shipping label service, newegg international shipping program, fulfillment, services There are more Newegg fulfillment services available to fit the diverse needs of our sellers. If you would like to learn more about the trends facing marketplace sellers as well as the fulfillment options to address them, be sure to check out the eBook: Essential Fulfillment Solutions for E-commerce Growth in 2019

Make sure to check back often as this page will update to reflect the latest in fulfillment fees and updates from the world of logistics and warehousing. And as always, if you have any other questions about our fulfillment fees or seller services, be sure to reach out to us.

marketplacemarketing@newegg.com