Amazon is testing FBA Onsite to bring software to third-party sellers

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Workers pack and ship customer orders at the 750,000-square-foot Amazon fulfillment center in Romeoville, Illinois.

Amazon is testing a new invitation-only program that would provide sellers with more efficient storage and shipping options and allow merchants to add Amazon’s software and logistics into their own warehouses.

Amazon described the new service, called FBA Onsite, as a “groundbreaking” program that combines the best parts of its existing fulfillment programs and brings down shipping rates, according to an invitation that was sent to sellers and viewed by CNBC.

The invitation also notes that the program should be considered a “work in progress” as Amazon will continue to refine the process based on user feedback. Bloomberg first reported the program on Monday.

The trial program started about three months ago and invited less than 50 sellers, according people familiar with the matter, who asked not to be named because they weren’t authorized to speak about it.

It’s Amazon’s latest effort to solve its warehouse congestion problem by using storage space owned by third-party sellers on the platform rather than just building out more fulfillment centers.

FBA Onsite could also draw more sellers to the Prime two-day shipping program with significantly lower shipping rates.