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“Ecommerce Briefs” is my occasional series on news and developments affecting the online market. In this article, I discuss Amazon’s increased holiday pay, new Prime benefits, and the company’s continued competition with Walmart in subscription services and health care.

 

 New FBA fees for holidays

Amazon recently announced that it is increasing fulfillment fees for Amazon sellers during the holiday shopping season as it struggles with rising prices. From October 15 to January 14, sellers using FBA will pay an additional 35 cents for items sold in the United States or Canada. This is the first time Amazon has increased seller fees for the holidays.

The company told investors in an email that it is taking the retrenchment because “…expenses are reaching new highs.” This is the second new fee imposed on consumers this year. In April, Amazon ordered a 5% increase in fuel costs.

 

Perks Competition

In August, Amazon announced new benefits for US Prime members. They can now buy products from select retailers on the Amazon app and Amazon.com and have same-day delivery to select zip codes within 10 cities.

The partnership includes omnichannel clothing retailer Pacsun, health and nutrition retailer GNC, kitchen supplier Sur La Table, global clothing retailer Superdry and omnichannel clothing brand Diesel. Brands and retailers that sell through Prime will be able to access Amazon’s logistics and fulfillment capabilities in addition to faster delivery to consumers.

Amazon values ​​it at $59. Also in August, Amazon partnered with food delivery company Grubhub to offer Prime members a year of Grubhub+. Members usually pay $9.99 per month. Amazon is expanding Prime benefits to preserve membership at a time when the number of new subscribers is dwindling. Subscription revenue growth was 10% in the second quarter of 2022, compared to 30% in the same quarter of 2021. Amazon is trying to offer Prime members more value and keep members away. Amazon first offered its Prime subscription in 2005 at $79 per year and stayed at that level for several years.

In February 2022, Amazon increased the subscription price from $119 to $139. Some members consider whether Prime is worth it. In April of this year, in a letter to shareholders, Amazon said that Prime has more than 200 million people. Consumer Intelligence Research partners put the number at 172 million.

On the other hand, Walmart has set the Walmart+ program at $98 per year. Recently, it announced a partnership with Paramount for a premium streaming service for Walmart+ members: an essential Paramount+ subscription (with ads) at no cost. Amazon and Walmart will continue to compete for subscribers by expanding their respective offerings through 2023.

Walmart+ members now receive a free Paramount+ Essential subscription.

Health care

Two weeks ago, Amazon revealed that it would shut down its much-touted telehealth service, Amazon Care, on December 31. The service — which offers urgent care services, free telehealth consultations and home visits from nurses – started in 2019 as a pilot program for Amazon employees in Seattle.

Last February, the company expanded the free offer nationwide for its employees and businesses. However, in a statement to employees announcing the end of the program, the company said that Amazon Care “… is not a sufficient offer for the large business we are targeting and will not work in the long term.” Still, CEO Andy Jassy said as e-commerce slows, Amazon is looking to health care for more revenue.

After Amazon ended its health care program, Walmart announced on September 7 that it will expand its virtual health services in 2023. Walmart and health care division UnitedHealth Group are joining forces in a 10-year plan to provide preventive care for the elderly 65 years old and more. select Medicare Advantage Plans and virtual health care for all ages – starting at Walmart’s 15 health locations in Florida and Georgia. The program will eventually include other locations.

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