Amazon, a giant marketplace for sellers to sell ample of different categories and style of products keep on changing and updating its guidelines and policies. And, it is essential for sellers to stay updated about the latest changes.
Before the year-end, Amazon gave all of us a Christmas gift by deciding to lower the Amazon referral fees across all categories on Amazon.com which can help sellers to increase their selection of products to sell. The effective date for the new lower referral fees is from the 19th of February 2019, and so all Amazon sellers have less than 2 months to prepare for the fee changes.
Important Amazon Referral fee reductions in the US:
● Reduction of the per-item minimum fee from $1.00 to $0.30 across all applicable categories. The minimum fee for Jewelry and Watches will decrease from $2.00 to $0.30 per item.
● Reduction of the referral fee percentage for Baby (excluding baby apparel), Beauty, and Health & Personal Care (including personal care appliances) from 15% to 8% on products with a total sales price* of $10.00 or less. The referral fee on products with a total sales price above $10.00 will remain at 15%.
● Reduction of the referral fee percentage for Furniture items (except for mattresses) from 15% to 10% on any portion of the total sales price* above $200.00. You will continue to be charged 15% on any portion of the sales price at $200 and below.
● Reduction of the referral fee percentage for Jewelry items from 20% to 5% on any portion of the total sales price* above $250.00. You will continue to be charged 20% on any portion of the sales price at $250 and below.
● Reduction of the referral fee percentage for Grocery and Gourmet products from 15% to 8% on products with a total sales price of $15.00 or less (previously announced on August 16, 2018).
With the referral fee changes, Amazon has also made changes in its Fulfillment by Amazon storage fee (Europe) which will be applicable from August 1, 2019. As referral fees and FBA storage fees update have been shared by Amazon at the same time, some sellers think that referral fees are only applicable to Amazon FBA sellers, but there is no connection between FBA storage fees and referral fees. Any product sold on Amazon whether FBA or FBM – Amazon charges a certain amount of referral fees to the seller as per the category.
Important Long-term storage fee changes in Europe:
● Amazon will eliminate long-term storage fees for units that have been in a fulfillment centre for 181-365 days. The last long-term storage fee charge for inventory we store for 181-365 days will be January 15, 2019. Amazon will continue to charge long-term storage fees for units in a fulfillment center for more than 365 days.
● Amazon will reduce the minimum long-term storage fee on units in a fulfillment center for more than 365 days from $0.50 per unit to $0.15 per unit. The last charge at $0.50 per unit will be January 15, 2019.
● Amazon will introduce a higher monthly storage fee for dangerous goods that contain flammable or pressurized aerosol substances. This change will first be reflected in April 2019 charges for storage that occurs in March 2019. Amazon will not change the monthly inventory storage fees for other products.
As a result of the referral fee changes, sellers have 2 options to go with in 2019:
● Sellers can keep the same pricing of the product which will help them increase their profit margin. OR
● Sellers can reduce the pricing of the product, keeping the profit margin as before which will increase their orders overall with low pricing.
Happy 2019 Selling!