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Amazon is dropping local third-party vendors from its Fresh grocery service

15 May 2018
  • Amazon Fresh has informed local third-party vendors that they will no longer be able to sell their goods on the platform, according to an email obtained by Business Insider.
  • Amazon Fresh formerly allowed local third-party vendors to sell their merchandise to be delivered to members alongside their typical Fresh orders in its Local Market Seller program.
  • The program is evolving as Amazon further expands its cheaper Prime Now grocery platform, where it is working on a Whole Foods integration.

Amazon Fresh will no longer let local third-party vendors sell on its platform, Business Insider has confirmed.

Vendors were previously allowed to enroll in Amazon Fresh’s Local Market Seller initiative, which supplemented Fresh’s offerings with locally sourced items. Fresh is Amazon’s answer to home-and-business grocery-delivery services like FreshDirect and Peapod.

Fresh’s third-party model acted as a platform for local merchants who could sell products to be delivered to members alongside their typical Fresh orders. The program will wrap up on May 30, when all vendors will be kicked off the platform.

The change was disclosed in an email to vendor partners on May 11, as told to Business Insider by Freddy, a cofounder of Amazon vendor consultancy, who asked that he be identified only by his first name.

An Amazon spokesman declined to comment on the changes.

The email informs vendors that the local program is transitioning to be more retail-based, with Amazon buying product wholesale and selling it to consumers, much like a typical store.

“While this specific program is transitioning, there are many other ways for local merchants to sell on Amazon,” the email reads, encouraging vendors to stay tuned for updates on the new options, one of which is likely to be selling through the new retail program.

In November, Amazon stopped its Fresh delivery service in parts of New York, New Jersey, Pennsylvania, Delaware, Maryland, and California, and it has yet to explain why.

At the same time, Amazon has turbocharged its fresh-grocery efforts with its two-hour-delivery service, Prime Now, and is working on integrating Whole Foods delivery into the service.

The Amazon executive in charge of Prime Now, Stephenie Landry, has also been tapped to lead Amazon Fresh, which has led some to speculate that the services might be merging.

“If you look around this facility, you’re going to see a lot of everyday items — food and consumables,” Landry told Recode last year. “AmazonFresh sells the same types of products but a much greater variety. And so both of them have a lot of synergies and it makes sense to think about them jointly.”

Landry said that a merger of the two brands is not in the cards — but the teams behind them may come together.

“I actually think that we’re going to have lots of different ways to get food to customers. But behind the scenes it makes sense to develop as many efficiencies as possible,” she said.

Source: Business Insider UK