The world’s largest retailer will end free shipping for online orders under $50 Canadian starting April 2.
The Newegg Canada Marketplace offers general merchandise from only Canadian sellers with local distribution, the retailer says.
Newegg Inc. has opened an e-marketplace specifically for Canadian merchants and shoppers, the retailer announced today. The Newegg Canada Marketplace offers products across various categories including apparel, home décor, appliances, jewelry, baby, health and beauty, consumer electronics and sporting goods, Newegg says. Only Canada-based e-retailers with local distribution are eligible to become sellers.
“Our goal is to connect Canadian sellers with Canadian shoppers in an intuitive, easy-to-use online shopping environment,” says Soren Mills, chief marketing officer for Newegg North America. “No matter where someone lives in Canada, Newegg Canada Marketplace offers numerous boutique shops and brand name products, all in one place.”
Newegg did not say what it charges sellers to list items on the new marketplace, except to say it offers “competitive commission rates without many of the surcharges imposed by other marketplaces.” Merchants selling on the U.S. Newegg Marketplace pay commissions from 8% to 15%, depending on the product category, which includes credit card processing fees, according to the Newegg web site.
In comparison, Amazon.com Inc. charges roughly the same commissions, which it calls referral fees, on items in its marketplace. But it also charges either a $39.99 monthly fee for merchants selling more than 40 items monthly or $0.99 per item for merchants selling less than 40 items monthly, plus “variable closing fees” on media products like books and DVDs, which are a fixed price of $1.35 per item, Amazon says. EBay Inc., meanwhile, takes 10% of the sale price of each item, up to a maximum of $250, and it charges a listing fee for each item after 50 free listings per month, it says. The listing fee is $0.05 for fixed-price books, DVDs, movies, music and video games, and $0.30 for both auction-style and fixed-price listings in other categories, eBay says. The e-marketplace charges additional fees for listing upgrades, such as bold fonts or adding subtitles.
Beyond marketplace sales, Newegg last year began the Shipped by Newegg fulfillment service for its U.S. marketplace sellers. In that, Newegg holds a merchant’s inventory and charges fees for storage, picking, packing and shipping. It says it can ship 99% of orders within 24 hours of validating payments for those purchases. Newegg will begin offering the same service to Canadian marketplace sellers by Q3 this year, a spokesman for the company says.
The web-only retailer continues to add new sales categories and programs to entice consumers. In 2013 it also launched a flash-sales site in the United States. This month it announced both a membership-based, free-shipping program similar to Amazon.com Inc.’s Prime, Newegg Premier, and a forthcoming section of its site to highlight gaming products, GameBase.
Newegg is No. 14 in the Internet Retailer 2013 Top 500 Guide, with roughly $2.8 billion in 2012 web sales. The retailer does not break out publicly the percentage of those sales that come from its e-marketplaces. However, the spokesman says Newegg's markeplaces have had triple-digit growth for the past three years “and we are confident the Canada marketplace will enjoy similar success.”