Amazon Says Less Than 16 percent of SFP’s U.S. Orders Met The Two-Day Shipping Guarantee

Amazon, the e-commerce giant that has become an inseparable part of our lives, has once again managed to disappoint us.

You know, the company that boasts about the efficiency of its Prime service and the magical two-day shipping? Well, turns out, it's not as magical as they want us to believe.

Let's start with the tale of the ill-fated Seller Fulfilled Prime (SFP) program. Introduced in 2015 with promises to bring new Prime-eligible inventory to our doorstep, it sounded like a dream.

But alas, like all good things, it had to come to an end. Four years later, Amazon decided to pull the plug on it, claiming it was no longer necessary. However, the Federal Trade Commission (FTC) thinks otherwise.

According to the FTC, Amazon executives didn't discontinue SFP because it was obsolete; they killed it because it was fostering healthy competition. Well, isn't that just the corporate equivalent of taking your ball and going home when the game isn't going your way?

But wait, it gets better. Amazon, in its oh-so-transparent manner, declared that less than 16 percent of SFP's U.S. orders managed to meet the holy grail of e-commerce – the two-day shipping guarantee.

They blamed it on the limited operational hours of some sellers, especially on weekends. Oh, the audacity! The nerve to blame it on the little guys who were trying to keep up with the Amazon behemoth.

The FTC, however, wasn't buying it. In a plot twist that should surprise precisely no one, they uncovered a different story.

An updated complaint unveiled last Thursday, the FTC asserts that sellers enrolled in SFP consistently met their promised delivery estimates set by Amazon. In fact, they claim that these sellers exceeded a whopping 95 percent in 2018.

Hold on to your outrage because there's more. The FTC alleges that these SFP sellers, on occasion, outperformed the golden children of Amazon – the Fulfilled by Amazon (FBA) orders.

Yes, you read that right. The very orders that Amazon itself handles, supposedly with the utmost efficiency, were sometimes outdone by these sellers who were supposedly struggling with their limited operational hours.

So, what does this all mean? It means that Amazon, the same company that prides itself on customer satisfaction and Prime's lightning-fast delivery, might have been pulling the wool over our eyes.

The SFP program, which could have been a haven for competition and diversity in the marketplace, was allegedly crushed because it was a little too successful for Amazon's liking.

In the grand scheme of things, this might just be another chapter in the book of Amazon controversies. But it's a reminder that behind the smiling boxes and convenient delivery, there's a corporate giant making decisions that might not always be in the best interest of the consumers or the smaller players in the market.

Oh, but the plot thickens! In the labyrinth of Amazon's internal communications, we stumble upon an email gem from none other than Jeff Wilke, the then-CEO of worldwide operations.

In this electronic missive, a frustrated Wilke admits to "losing [his] mind" upon discovering that UPS dared to advertise its online retail fulfillment service for Prime-eligible orders. Well, well, isn't that a delightful revelation?

Not content with Wilke's exasperation, two other high-ranking Amazon executives, dancing in harmony with the anti-competition tune, chimed in on the same email thread. Their collective brilliance led them to a unanimous conclusion – shutting down Seller Fulfilled Prime (SFP) in the U.S. should be seriously considered.

Because, of course, how dare other players in the market try to offer services that might rival Amazon's own?

But the drama doesn't stop there. Despite Amazon halting new enrollments in SFP later that year, the waitlist for the program turned into a monster, growing to include over 8,000 sellers within a mere six weeks. It's almost as if sellers were desperately trying to find an alternative to the Amazon-controlled marketplace.

The lawsuit, with the precision of a well-executed thriller, drops the bombshell that "Amazon caught a glimpse of this alternative universe when it temporarily relaxed its coercive conduct."

Oh, the sweet taste of a brief respite from Amazon's monopolistic grasp. During this momentary lapse in dominance, the company recognized something alarming – the decision to ease up on the coercion was immensely popular with both shoppers and sellers.

Hold on to your hats because the labyrinthine web of Amazon's questionable practices continues to unravel! According to the Federal Trade Commission (FTC) lawsuit, an Amazon executive, in a rare moment of transparency, expressed concern that the Seller Fulfilled Prime (SFP) program was chipping away at Amazon's competitive edge in the U.S. Oh, the horror of competition!

The executive went on to highlight a startling revelation – sellers in the SFP program were now motivated to manage their own warehouses, making inventory accessible to other marketplaces.

This newfound capability, previously exclusive to Amazon's Fulfilled by Amazon (FBA) customers, was apparently causing ripples in the carefully orchestrated pond of Amazon's dominance.

The complaint spills the beans on discussions with sellers, where additional Amazon executives admitted that if FBA were not mandatory for Prime eligibility, many sellers would happily opt for independent fulfillment providers based on the platform with the incoming order. Well, well, well, it seems like Amazon's stranglehold on sellers might be loosening.

In response to this revelation, Amazon's former head of global fulfillment services couldn't hide his discomfort at the potential rise in competition from independent fulfillment providers. It's almost as if Amazon prefers a playing field where it's the only big player.

The lawsuit contends that while the operations of independent fulfillment providers are currently significantly smaller than FBA, handling orders for only a few hundred to a few thousand sellers, they could potentially secure substantial business from third-party sellers on Amazon if given the opportunity to compete for Amazon's order volumes. The monopoly might not be as iron-clad as Amazon would like us to believe.

Now, enter the reintroduction of SFP, which appears to be Amazon's olive branch to the FTC following the notable antitrust lawsuit. In a twist of fate, Amazon, just before the commission filed the groundbreaking case, reversed its decision to impose a 2 percent fee on third-party sellers utilizing SFP. Learning their lesson, or simply saving face? You decide.

An Amazon spokesperson, with a tone of self-righteousness, claimed, "We have learned a lot, and over the last several years, we updated the program requirements." Conveniently forgetting the past, they declared, "We’ve now reopened enrollment to an improved Seller Fulfilled Prime program that can meet our customers’ expectations."

However, the stringent criteria for participation in the SFP trial program, demanding sellers fulfill 100 packages within the 90 days preceding their application, maintain a valid tracking rate exceeding 95 percent, a cancellation rate below 2.5 percent, and a late shipment rate under 4 percent, raise eyebrows.

Are these criteria genuinely about meeting customer expectations, or are they another tactic in Amazon's arsenal to shape sellers' choices within its ecosystem?

In the ongoing saga of Amazon's dance with antitrust concerns, it seems the company's efforts to maintain its dominance are not going unnoticed.

As the battle between the e-commerce giant and regulators unfolds, it leaves us questioning the true nature of competition and choice within the ever-expanding Amazonian landscape.

So the next time you're eagerly awaiting that two-day delivery, remember that the reality behind the scenes might not be as picture-perfect as the Amazon logo suggests.