Recently Amazon announced that they will cut off the shipping fees for small envelope packages. The new changes will take effect on July 1. According to Bloomberg, this is a serious indicator that the giant will aim at the Asian market. Merchants would pay $1.61 to ship three, flat, 1-ounce packages, 67% less than the current price, according to the announcement.
The pressure comes from the ePacket program which is an agreement between US Postal Service and China Post. Some people describe that program as an unfair since US business pay more to ship an item to a US customer than a Chinese business pay to ship the same item from overseas.
The new rate changes apply to merchants using the company’s Fulfillment By Amazon Small and Light program. The program offers online shoppers free shipping on a large variety of small items. Those products come from third party merchants which give Amazon a cut of each sale in return Amazon handles the shipping, storage and packing. The rate changes are essential for most of the low-cost items below $10, which are usually not very profitable for those merchants.
Amazon continues to work hard on lowering the shipping and fulfillment costs.