The Unfair Burden Amazon FBA Puts on Online Sellers
by Lina Khan (Finally) Sues AmazonOctober 11th, 2023
Too Long; Didn't Read
Amazon's Fulfillment by Amazon (FBA) service simplifies order fulfillment but comes at a significant cost to online sellers. This report unveils the intricacies of FBA, including storage fees and surging costs, with a 30% increase in fulfillment fees from 2020 to 2022. With Amazon's unmatched control over fulfillment and delivery, online sellers often have little choice but to utilize FBA. In 2020, undisclosed% of sellers handled undisclosed% of U.S. orders through this service.
FTC v. Amazon Court Filing, retrieved on Sep 26, 2023, is part of HackerNoon’s Legal PDF Series. You can jump to any part in this filing here. This is part 9 of 80.
E. Fulfillment By Amazon
108. Amazon sells fulfillment services and facilitates delivery under the name “Fulfillment by Amazon,“ which is commonly abbreviated to “FBA.“ Sellers can use the FBA to fulfill orders made on Amazon.
109. "Fulfillment" refers to the process of preparing items for shipping to "fulfill" online orders. Fulfillment involves storing, picking (retrieving from storage), packaging, and preparing items purchased from online retail stores for delivery. Fulfillment operations generally occur within a specialized warehouse called a "fulfillment center."
110. For most online sellers, fulfillment is a significant business cost.
111. Delivery is a related but distinct service. "Delivery" refers to the specific process of transporting a package from a fulfillment center to a customer's chosen address. One company may fulfill an order, and then transfer the package to a different company for delivery. For example, a fulfillment provider may hand a package off to a parcel carrier like the U.S. Postal Service, FedEx, or UPS, to complete delivery.
112. Amazon both fulfills and delivers products purchased on its online superstore. In 2021, Amazon fulfilled nearly (redacted)% of all orders made on Amazon across both its Marketplace and Retail business units. Amazon delivers products itself or contracts with third-party delivery company todo so. Amazon has estimated that it now makes more deliveries in the United State than any other company.
113. When online shoppers buy an item, they also expect fulfillment and delivery of that item.
114. When a seller uses FBA, Amazon charges the seller for storing their items and charges the seller a fee based on the dimensions and weight of the product when it is purchased.
115. Amazon has increased the fulfillment fees it charges to sellers by approximately 30% in just two years, from 2020 to 2022.
116. As explained in Part VI.B, below, sellers have little choice but to use FBA. In 2020, more than (redacted) sellers used FBA to fulfill more than (redacted) orders in the United States.
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This court case 2:23-cv-01495 retrieved on October 2, 2023, from ftc.gov is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.
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