By Christopher Mims | Photographs by Gavin McIntyre for The Wall Street Journal
Things had been looking good for Charleston Gourmet Burger, a
small family business based in South Carolina. Founded by
husband-and-wife team Chevalo and Monique Wilsondebriano in 2012,
it sold its burger sauces and marinades in thousands of stores
across the U.S., on the shopping channel QVC and directly to
customers through its website. Just before the pandemic led to
lockdowns in March, the couple made the fateful decision to stop
selling through stores and to concentrate on online sales.
It proved to be a near-fatal mistake for their small business,
which is the family's sole source of income, and employs all four
of the couple's teenage and adult children, as well as Mrs.
Wilsondebriano's sister and mother.
In the Amazon era, selling online is one thing, but actually
getting products to customers fast enough to make them happy is
something else. It's especially difficult if, like the
Wilsondebrianos, a merchant isn't selling via Amazon, but still
feels obligated to match the e-commerce giant's promises of free
and fast delivery.
Their sales plummeted, from upward of $20,000 a month to as
little as $3,000 a month, Mrs. Wilsondebriano says. The family had
no choice but to pack and ship orders themselves, since they could
no longer afford the third-party shipper they had been using.
Still, many potential buyers complained about shipping charges
-- around $8 on a $40 order -- and that the sauces and marinades
took too long to arrive, says Mrs. Wilsondebriano.
"It is a daily battle trying to keep up with Amazon, and it is
not fun," she says.
In fact, while Charleston Gourmet Burger left Amazon two years
ago because the fees were so high, the family business is
considering a return.
America's small and medium-size online merchants are being
separated into winners and losers according to their ability to
adapt to changes in logistics driven largely by Amazon and other
big retailers. Amazon's continuing hiring binge and warehouse
building spree facilitate ever-faster, free Prime shipping.
As a result, even merchants who don't sell on Amazon are racing
to ship products as fast as they can, either eating the extra cost
or raising prices and watching their sales decline -- while
simultaneously coping with supply-chain bottlenecks.
For the Wilsondebrianos, this means a daily ritual involving the
Every two weeks, pallets of goods -- ranging from 1,500 to 3,000
bottles -- are dropped off from the factory at a workshop attached
to their garage, which serves as a makeshift warehouse. In addition
to running the online ad campaigns they use to drum up sales, Mrs.
Wilsondebriano and her husband must process every incoming order
from the website.
In idle moments between remote classes conducted on Zoom, their
15- and 16-year-old daughters help pack boxes, and write
personalized notes thanking customers. Their 25-year-old son, their
eldest daughter and Mrs. Wilsondebriano's mother all pitch in when
Once they put labels on the boxes, the husband-and-wife team
loads them into an SUV and drives them to the local post
"It's like an assembly line," says Mrs. Wilsondebriano.
But it's not an assembly line -- let alone a warehouse full of
humans and robots, moving in a software-optimized workflow meant to
drive down the cost of every online purchase.
Amazon was among the first e-commerce companies to turn its
supply chain into a competitive advantage, says Matt Crawford,
general manager of shipping at BigCommerce, which helps merchants
build and run shops online. Once Amazon created its Marketplace,
where anyone could sell wares, and Fulfilled by Amazon, its
logistics service for warehousing and shipping the goods those
businesses sold on Amazon, that advantage extended to all sellers
willing to pay for these services.
Amazon has continually ratcheted up the speed with which most
goods sold on its site arrive on the doorsteps of shoppers,
offering first two day, then one day, and now frequently same-day
delivery, as it rolls its Prime Now service into its main site and
This has left sellers who want Amazon's coveted Prime badge --
which indicates fast shipping and yields significantly higher sales
-- with a difficult choice, says Steve Denton, chief executive of
Ware2Go, a subsidiary of United Parcel Service that matches small
and medium-size online merchants with warehouses from which to
distribute their goods.
Sellers can either pay ever-more-expensive fees to Amazon to
warehouse and ship their goods from the company's own facilities,
he says. Or they can ship from non-Amazon warehouses that meet the
stringent demands of Amazon's Seller Fulfilled Prime program,
including nationwide availability and fast shipping. Some sellers,
especially those who deal in large items or ones that don't
typically sell quickly, find this a more affordable option.
"You're going to see a continual weeding-out of merchants that
can't solve the supply-chain piece [of online sales]," says Mr.
Crawford. Merchants' shipping costs, through carriers like UPS, the
U.S. Postal Service and FedEx, are going up between 5% and 7% this
year, as demand skyrockets. And since Covid disrupted supply chains
world-wide, merchants have to pay more to warehouse a larger buffer
of goods. Meanwhile, demand for faster shipping means retailers
have to figure out exactly how many items to store in which
warehouses spread out in a network that spans the country, he adds.
(Amazon's fees discourage retailers from keeping items in its
warehouses for long.)
To be in the Seller Fulfilled Prime program, sellers must stock
merchandise in warehouses from which customers can be reached in
one or two days' delivery time, for most views of a product on
Amazon's site and app.
Amazon's success with its marketplace has spawned many
imitators. Things you buy on the websites of Walmart, Target,
Wayfair and dozens of other big merchants may be sold and shipped
not by those companies, but by smaller businesses that give these
retail giants a cut of sales and may pay other fees in exchange for
The proliferation of the marketplace model, and the way Amazon
shapes customers' expectations, means that the growing demands the
company places on Prime sellers ripple across the entire e-commerce
industry, says Mr. Denton. These other marketplaces continually
change their own seller-fulfillment requirements based largely on
Amazon says it has "made changes to Seller Fulfilled Prime so
customers have a consistent Prime delivery experience, regardless
of the fulfillment method. Amazon succeeds when sellers succeed,
and these changes help ensure that SFP sellers continue to delight
Prime customers with the shopping experience they expect."
For small or medium-size online sellers, keeping up with the
latest Prime demands requires what were until recently considered
extraordinary measures. It means operating warehouses at least six
days a week, and sometimes resorting to pricey second-day or
Some sellers are thriving in this new world. In the early 2000s,
Lee Siegel founded ECR4Kids, a manufacturer of flat-pack,
ready-to-assemble furniture and play equipment for children. The
company sold to traditional buyers, like dealers to school
districts, as well as directly to big-box stores and even Amazon --
but only as a wholesaler and vendor. In late 2018, to increase
sales, Mr. Siegel listed some of his merchandise directly on
When the pandemic hit, Mr. Siegel thought his sales would
crater, but instead they boomed, as parents of children learning at
home rushed to buy things like child-size desks, chairs and
Around the same time he began selling on Amazon's marketplace,
ECR4Kids shifted from running its own warehouses to outsourcing its
fulfillment to third-party logistics providers, including
Previously, says Mr. Siegel, fulfillment services could be
provided by anyone with "a forklift, a loading dock and a big empty
warehouse with shelving. But to survive versus Walmart, Costco,
Amazon and Wayfair requires a completely different approach to
customer satisfaction and speed of shipping."
Some turn to companies such as Productiv, which operates six
distribution warehouses. While Amazon relies on its own bestiary of
shelf-moving and package-sorting robots, companies like Productiv
are testing systems with "follow-behind" robots that trail
warehouse employees as they walk through rows of shelving, and then
ferry to conveyors any items their humans pick from those
As in many other industries, this automation is in part a
reaction to rising wages and a scarcity of labor. Demand for
warehousing and fulfillment is setting and breaking records by the
month, leading to both more competition for these services and a
greater variety of them to choose from.
At Charleston Gourmet Burger, things have improved a great deal.
The weather has grown warmer and millions of vaccinated Americans
are once again gathering with friends and family -- and firing up
the grill. Monthly sales rebounded to nearly $14,000 in May, and
Mrs. Wilsondebriano anticipates June will be even better.
In addition, the family is going to start experimenting with
using Amazon to both sell and fulfill orders. Amazon is launching a
pilot program aimed at providing additional assistance to Black
business owners like the Wilsondebrianos, including free
advertising, free storage and returns processing, the waiver of
some fees, free advisory services and more. Some time within the
next two weeks, about 90% of orders from the family's website will
be fulfilled by Amazon, and their products will appear on Amazon's
"To have so many fees waived sounds like a win-win," says Mrs.
Wilsondebriano. "But I don't know how this is going to go."
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Write to Christopher Mims at email@example.com
(END) Dow Jones Newswires
June 12, 2021 00:14 ET (04:14 GMT)
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