Mhlnews 10981 Amazon 1

Amazon Making Retailers Offer They Can’t Refuse

July 24, 2017
To build up global inventory Amazon told retailers that "we will purchase inventory from you at your local marketplace offer price."

In a bid to make sure that no order, no matter where the location, goes unfilled, online retail giant Amazon has created a program which the company will buy products at full price from third-party merchants, according to a report from CNBC.

"For a limited time, there will be no additional fees, and we will purchase inventory from you at your local marketplace offer price," according to an email that CNBC obtained.

This move in not unprecedented as Amazon created a similar program in Europe called the Pan-European FBA which allows merchants to sell their products across Europe and have inventory stored in any of the region's fulfillment centers at no extra cost.

The program has been successful as the number of FBA sellers worldwide grew more than 70%, according to CNBC, and they delivered more than 2 billion items.

While the offer sounds too good to be true, some retailers are taking issue with this program. One for example is Birkenstock, which does not allow certain partners to sell on Amazon. Upon hearing of this new program, David Kahan, CEO of the Birkenstock USA, says that any sellers that participate in this program are breaking an agreement with the company.

"If Amazon is, in fact, soliciting our accounts in order to acquire our products so that they may resell those goods, that causes a serious breach of our agreement with our existing retail partners," Kahan says. "If indeed this is the case, we will take immediate action with any account that violates our agreement."

To learn what effect this program will have on the global supply chain, read the full article. 

Latest from Global Supply Chain