Inflation, shrinkflation, rising real estate rental costs, and even the collapse of marketing channels like Twitter: Ecommerce store owners have it tough in 2023. Now, a few recent developments are making it even harder.
First — if a leak is to be believed — Shopify has plans to cut access to its merchant “success managers” from its Plus tier, blocking thousands of Shopify store owners from a big benefit to that particular subscription plan.
On top of that, Amazon has just this week unveiled a new upcharge: Sellers who opt out of “Fulfillment by Amazon” will be charged 2% extra in order to fulfil orders themselves.
Shopify’s Cutting Success Managers
The leaked information comes from Insider, which broke the news about the change coming to Shopify Plus, the service’s highest priced plan at $2,000 per month.
Plus is primarily used by business making less than $10 million in revenue a year — that’s not chump change, but it does mean that this update will impact the relatively small-but-successful retailers.
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Merchant success managers are the in-person consultants that offer one-on-one advice to businesses concerning how to launch and operate an online store. These managers are Shopify employees, so while they’re one of the biggest perks to paying for Shopify Plus, they’re also an expense that only gets larger as Shopify’s customer base grows. In-person meetings can’t be scaled up like a new AI or an ad network.
According to an internal email, the new plan is to cut Plus merchants entirely and replace them with two options, depending on how much a Plus user is earning.
Those making less than $2 million in sales per year will only have Shopify’s help center and its Support staff for aid, while those making between $2 and $10 million will have access to a “merchant success team” for targeted solutions to a set number of specific concerns, such as “monetized product adoption and merchant growth scenarios.”
Following the leak, Shopify has publicly confirmed that this change is indeed their plan for the near future, although it has yet to set a date for the change.
Amazon’s Adding New Seller Fees
Amazon has an upcoming change of its own, and it certainly looks like a similarly seller-unfriendly move: Rolling out in October, Amazon will now start charging users of its Seller Fulfilled Prime program an additional 2% fee on every sale — a fee they could avoid if they instead opted Amazon’s own logistics services rather than shipping themselves.
But a lot of these sellers have paper-thin margins, due in part to a hefty Amazon commission fee that may be around 15% already.
Plus, adding an incentive to make users ship through your own service brings up antitrust concerns — at a time when the FTC is already tinkering with an antitrust suit against the ecommerce giant.
“We’re sitting here waiting for the FTC to take action against Amazon for antitrust issues, and this fee shows Amazon is not scared at all.” – Seller Jason Boyce told Bloomberg
Verdict: Ecommerce Stores Are in for Tough Times
Amazon seems to be heavily focused on boosting profits in 2023, with changes ranging from mass layoffs to shuttering its unprofitable physical locations and even cutting its Amazon Smile charity program.
Shopify is similarly interested in scaling its ecommerce website services, and cutting back on benefits that cost too much to keep its profits from steady growth.
None of these incentives are new to the cutthroat business world, of course. But, as the greater economy and supply chains continue to chug along with more effort than in decades past, you could be forgiven for a little disappointment. After all, this looks like another clear case of massive companies passing all their financial insecurities right along to small operations with even less financial leverage and stability.
