Amazon is super-sizing, as the company’s Chinese arm entered into the freight forwarding business.
What does it all mean for FBA marketers and sellers?
Maybe nothing, maybe something; let’s take a snapshot of the situation and discuss.
Amazon Registered As A Freight Forwarder (Which Isn’t What You May Assume)
When news broke, some folks assumed Amazon bought a fleet of cargo ships to better facilitate overseas shipments. But that’s not quite accurate because Amazon registered as a freight forwarder, not an ocean liner.
Is the difference between ocean liners and freight forwarders significant? Sure is. In the simplest terms, ocean liners can operate fleets of ships. Freight forwarders, however, are considered “non-vessel operating common carriers” – meaning they can buy space on cargo boats at wholesale costs, but not run boats.
Will Amazon’s Move Into Freight Forwarding Hurt Stateside FBA Marketers? (Some People Think So)
Why did Amazon make the move? We can only speculate; but, it seems like a long-term, cost-cutting maneuver. The change will likely accelerate the buy-to-delivery pipeline, which is ideal for both Amazon and third-party sellers.
Some people worry, however, that an insular, Amazon-run, Sino-U.S. supply chain has the potential to pummel stateside FBA marketers and sellers. How? Since foreign shipping times would decrease, the number of Chinese manufacturers marketing directly to U.S. buyers would probably increase, competition would stiffen, margins would narrow – and profits would be harder fought.
Are the concerns justified? It’s too early to tell. Right now, the freight forwarding registration is just another indicator that the private label selling and online marketing industries are on the rise.
Get An FBA Lawyer On Your Side
The FBA business can be lucrative; many FBA marketers make an excellent living; but beware: pitfalls abound. To avoid costly setbacks, consult with an Amazon private label lawyer. Attorney Aaron Kelly has been in the space for nearly a decade and understands the legal opportunities that may help your business flourish.
Rey, J. D. (2016, January 14). Amazon Can Now Ship Packages From China to the U.S. by Sea. Retrieved February 28, 2016, from http://recode.net/2016/01/14/amazon-receives-ocean-freight-license-to-ship-packages-from-china-by-sea/