Will Amazon's extended discounts to third-party sellers affect other marketplaces?

JD.com warehouse
Amazon is enticing more third-party sellers to use its fulfillment centers.

Amazon has announced several new warehouse developments over the past year across the U.S. The marketplace giant is hoping to streamline logistics capabilities, enticing more third-party sellers to store and ship their products through Amazon's fulfillment centers. 

Amazon is also beefing up its Multi-Channel Fulfillment (MCF) service through FBA, enabling sellers on channels such as eBay or Shopify to house inventory and ship from these fulfillment centers. Starting this month, Amazon will even reduce one- and two-day shipping fees for partnering MCFs. In fact, all MCF shipping prices will be reduced, but the most significant drops will be seen in Expedited and Priority shipping, which will drop by as much as 15% to 32%.

Ultimately, more third-party sellers are using Amazon logistics allow the giant to control seller inventory and better standardize customer service. 

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According to Victor Rosenman, CEO of Feedvisor, although MCF program is not new, the fee changes are. Using MCF, retailers can use Amazon fulfillment centers for orders, and returns, a system unique to only this marketplace. 

For Amazon, this move puts them "on the top of the e-commerce industry" by knowing and keeping an eye on what other products retailers are successfully or unsuccessfully selling out. 

"This means Amazon can get a lot of data about all other e-commerce channels and brand recognition," Rosenman told FierceRetail. "For sellers, they can benefit through Amazon's fast delivery, instant scalability and simplify their business operations by using just Amazon's logistics service." 

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While teaming with Amazon is good news for the marketplace, it could affect the branding of other retailers, as products shipped by Amazon will have Amazon packaging. 

If other marketplaces want to keep up with Amazon, Rosenman recommends that they create their own fulfillment services and provide a high-class of customer service. And now is the time.

"We expect marketplaces to become the fastest growing channel in the commerce space and keep outperforming all other channels," Rosenman said.