Amazon launched two new programs last week that it predicts will keep 300 million products in service each year, furthering its circular economy goals. Small businesses will be able to resell returned merchandise as used on Amazon, and they will be able to offload the management of returns and surplus merchandise to Amazon and its partners, thanks to new Fulfillment by Amazon Liquidations and Grade and Resell options.
As e-commerce has exploded during the COVID-19 pandemic, the retail colossus has come under fire for destroying mountains of new products, including laptops, iPads, televisions and face masks at instead of reselling, recycling or keeping them in circulation. Exposures last year by iTV News in the UK and later by the Canadian Broadcasting Corporation outraged consumers and sustainability advocates, prompting Amazon to pledge to work for âzero product disposalâ.
Meanwhile, as Amazon advances its ambitions of achieving zero net carbon by 2040 and 100% renewable energy by 2025, the company has expanded its sustainability team. In January, he recruited George Bandy, former CSO of the Mohawk Group, as global head of circular economy efforts.
Customer returns are a reality for all retailers, and what to do with these products is an industry-wide challenge.
âCustomer returns are a reality for all retailers, and making these products is an industry-wide challenge,â said Libby Johnson McKee, director of global returns, recommerce and sustainability at Amazon, in a press release. “These new programs are examples of the steps we are taking to ensure that products sold on Amazon, whether by us or our small business partners, are used well and do not become waste.”
ROI for SMEs
Small businesses have been selling products through Amazon for 21 years. Since 2006, the Fulfillment by Amazon (FBA) program has given them the ability to let Amazon handle the storage, packaging and shipping of products to customers.
Now, with FBA Liquidations, sellers can also rely on “wholesale liquidation partners and Amazon technology to recoup potential losses on returned and excess inventory.” Amazon did not provide details on these partners or technologies.
The other new offering, FBA Grade and Resell, allows merchants to list items returned for sale as used, graded from “as new” to “acceptable”, at a price they choose.
Without these new programs, small businesses on Amazon would either have to ask customers to return the items to them or ask Amazon to donate the items. With Fulfillment by Amazon donation, launched over the past two years, sellers can donate returns or surplus items without having to manage or deliver them. This led to 67 million items, including school supplies, being donated to charitable partners, according to Amazon.
As much as I sincerely believe that Amazon has a millennial view on the environment and wants to change the world for the better in that regard, this is just another way to clear the shelves.
FBA Liquidations is available in the United States, Germany, France, Italy and Spain, and is coming to the United Kingdom, where FBA Grade and Resell is already available. The latter will arrive in the United States later this year, then arrive in early 2022 in Germany, France, Italy and Spain.
Among Amazon’s flyer deals for consumers, its little-known Amazon Second Chance hub shares details about products and packaging that can be passed on, traded or given a second life, as well as online discount stores for used goods. , overstocked and refurbished.
For small businesses, managing excess inventory or returns can be a daunting task. For Amazon, this takes up valuable warehouse space.
âAs much as I sincerely believe that Amazon has a millennial view on the environment and wants to change the world for the better in that regard, this is just another way to clear the shelves of slow moving inventory,â says Andrew Tjernlund, who runs a thriving business selling ventilation equipment on Amazon and another company distributing electric vehicle chargers.
He doesn’t think Amazon’s new FBA programs will be needed for his Tjernlund products. âWe’ve understood for years that Amazon is a tech company – not a warehouse developer or a shipper … It really helps new sellers who don’t know any better and is motivated by Amazon who doesn’t want to build buildings. additional to enable irresponsible producers. “
Stuff has a second life
Amazon’s new reverse logistics offerings, activated by third parties, come as many independent companies find gold in circular economy games. B-Stock, for its part, calls itself “the world’s largest online retail marketplace for customer returns and surplus merchandise.”
âThe secondary market is booming and shows no signs of slowing down,â says Marcus Shen, COO of B-Stock, which he says matches hundreds of companies selling excess inventory to hundreds. thousands of global commercial buyers who resell them themselves. “From like-new inventory to salvage, regardless of category or condition, B-Stock has professional buyers looking for that exact inventory, fueling the circular economy.”
All major retailers have an urgent opportunity and a responsibility to accelerate the circular economy and reduce waste.
Last year, the number of first-time buyers at the company increased by 34%, and some 120,000 items worth some 400 million pounds were traded there. B-Stock, which lists Amazon as a partner, also says its number of sellers increased by 26% in the first quarter of 2021, compared to the same period last year.
Asked about the potential environmental effects of Amazon’s new initiatives, Boma Brown-West, director of consumer health at EDF, noted the outsized role e-commerce companies can play in driving a circular economy.
âConsumer products are the greatest source of environmental impact in our modern world, and their disposal contributes significantly to the billion tonnes of municipal waste generated globally each year,â she said by email. âAll major retailers have an urgent opportunity and a responsibility to accelerate the circular economy and reduce waste. While any announcement of retailer efforts to do just that is important, it is not yet a cause for celebration. The real winners will come out based on their ability to successfully implement circularity programs. “
Brown-West added that “doing more” to improve efficiency and reduce material waste can start with following the leaders, and she called product take-back programs like Apple, Samsung and Patagonia.
In addition, being a leader in waste means raising the ambitions of distributors and promoting an economy that eliminates toxic ingredients. “Otherwise, we risk reusing or recycling materials containing toxic chemicals, thereby perpetuating our exposure,” said Brown-West.