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Sun Aug 28 2016 12:14:07

What's Behind Amazon's Shocking New Seller Fee?

By: Ina Steiner

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Would you pay $1,000 to Amazon to get approval to sell a particular brand on its marketplace? That's what is now happening, as sellers are discussing in this thread on the Amazon boards.

In some cases sellers must now pay $1,000 (and sometimes more) to get approval to sell branded items on the marketplace - that's $1,000 per brand approval. "They've taken pay2play to the next level," one merchant wrote. 

Amazon confirmed it requires fees for selling certain products and told EcommerceBytes there are fees for selling in certain categories as well. 

The working theory among sellers is that it's designed to cut down on counterfeits on the marketplace, but the inconsistencies sellers are reporting is maddening, especially to longtime sellers.

"This new policy is going to help get rid of a lot of the counterfeiters, retail arbitrage etc. but it is also going to hurt those of us who have legitimate business relationships with companies that do brand registry but allow us to sell their product on Amazon."

Amazon is facing pressure from companies who don't like the fact unauthorized third-party sellers are listing their brands, some of which may be counterfeit items, as well as items they've picked up on clearance from brick-and-mortar stores and selling as new (called retail arbitrage). Likewise, Amazon is facing pressure from customers who complain when they receive such items.

Amazon's response is to force sellers to provide proof they are authorized resellers - but Amazon being Amazon, it doesn't want to incur additional costs - it takes resources to sift through all those applications, reviewing invoices and proof of brand-authorization. 

Lending credence to the theory that the fees are about covering its costs - Amazon is also testing a program where sellers pay $400/month for customer support through a pilot program called Seller Support Plus

In a brilliant move (from a financial standpoint), Amazon is taking traditional cost centers and turning them into profit centers.

While some small sellers are devastated to learn of the new brand and category fees, others are delighted. One seller called a thousand dollars a bargain if it reduces the number of sellers who list items from non-traditional or questionable channels. "You know what I mean, liquidations, returned product, gray market, and the ever popular retail arb," they wrote.

Amazon knows that for many sellers, a thousand dollars is indeed a bargain - how do they know? Consultants are charging thousands of dollars to help Amazon sellers avoid suspensions or get reinstated if they are suspended.

From the seller standpoint, the timing couldn't be worse, coming right before the holiday season.

Some side effects of the new fees - some sellers who have approval say they are raising their prices on Amazon. And other sellers say they will move their business to eBay.




Comments (30) | Permalink

Readers Comments

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: FeelingFroggy This user has validated their user name.

Sun Aug 28 13:40:06 2016

I wouldn't be in any hurry to move anything to Ebay. In a few months one can bet that Ebay will be following Amazon. Ebay isn't about to let a gift horse get away.

Bottom line folks, its the bottom line.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: 27tcle This user has validated their user name.

Sun Aug 28 13:59:53 2016

In a word... GREED.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: Rexford

Sun Aug 28 17:45:32 2016

27tcle took the word right out of my mouth.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: pace306 This user has validated their user name.

Sun Aug 28 20:32:31 2016

Ive heard about this for a few days now, but havent seen any notices (YET) on Seller Central.

What was "confirmed" was that Nike, Lego and Adidas are 3 that started this nonesence.

I dont put it past eBay to do THE SAME EXACT THING - its just when and HOW.

Theres alot of fake LEGO around - but its not the same as real LEGO (look up Decool for example), but being im NOT in the "shmata" business, Ive never seen fake Nike or Adidas.

While we ALL rail against eBay (except tool - he thinks that eBay is the BEST THING SINCE SLICED BREAD) Amazon - is no angel.

This is just a way to get manufacturers off their backs, increase revenue, ease complaints from the big boys who complain that small sellers outsell them (Crutchfield Im looking at you!).

Lets see how far this goes and what brands it will effect.

Truth is - its great for eBay - if they are smart enough to capitalize on it.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: zenbreeze This user has validated their user name.

Mon Aug 29 00:13:32 2016

So they bring in the counterfeit sellers from overseas in the first place (I've been hit hard by fakes of my copyrighted artwork appearing all over the place) and this is their response?  I imagine the big problem sellers (the sweatshop counterfeits) will gladly pay the fee.  They seem to have plenty of money to advertise. And will be allowed to.  

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: donald This user has validated their user name.

Mon Aug 29 00:24:17 2016






This is another reason why we can not depend on just Amazon or eBay. We need to diversify. I'm so glad I did years ago. They simply do not care when they become too big.


What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: val2525 This user has validated their user name.

Mon Aug 29 00:37:17 2016

If they'd stop allowing the chinese knockoff sellers on the site, they'd end most of the problems.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: Barbbie This user has validated their user name.

Mon Aug 29 01:08:25 2016

Charging a seller 1000 per brand is not going to get rid of knockoffs, the Chinese have plenty of money so they will just pay it. They will not be discouraged by this. Nor will those foreign sellers who are just listing others items. Since the listing will not go through, they will just move on, they usually do not list in the correct category anyway. it won't change the knockoffs being sent to amazon FBA, they are in their buildings and yet they just change the negatives for these sellers.
It is the legit small business that will suffer.
There are plenty of ways to remedy the situation but amazon wants us to throw money at them and some will go for it. Personally, I am imagining that come Christmas, there will be shortages and even higher prices on Amazon. Maybe the Amazon customer will finally shop around. Ebay could have the best Christmas ever, well, only if they let the new customers find the items, otherwise, they will have nothing.
Since the remaining sellers will be raising prices, advertise on amazon and get the customer to your own site.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: Chicago48 This user has validated their user name.

Mon Aug 29 02:10:13 2016

I believe this charge is in the beta test stage.  Just a test to see if it stops counterfeiting and the Asian sellers.  If it works I'm all for it.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: Marie

Mon Aug 29 02:37:48 2016

I'm not so sure this is just pay a fee and then you can sell the brand.  According to the article it  says you pay the $1000 per brand to get approved.  Now does there is a real approval process or anyone can pay the fee and then start selling that brand???!?  The article isn't specific enough.

Barbbie is right.  The simple fact of paying the fee would not clean up the site in respect to counterfeits.  Many of those seller have plenty of money to pay that fee and more so they could sell their stuff.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: pace306 This user has validated their user name.

Mon Aug 29 10:17:17 2016

Marie is %100 right.

Its NOT the $1000-$1500 - although for most thats a BIG barrier.

The issue is the "permission" to sell specific brands on Amazon.

If the brand doesnt want you - your "dead" on Amazon.

None of this is NEW (alot of brands are gated and have been for some time) ... its in conjunction with the fee that makes it sting more.

In electronics and fashion, MANY brands are gated - Sony, Pioneer, Infinity, Denon, Monster and many many more.

Its new (as well) to Toys, where people (like LEGO) want NO competition on Amazon from pesky 3p sellers and basically cut Amazon a deal (instead of going to court with them).

The new policy is win/win/win so Amazon doesnt care.

The question is - how will eBay approach this.

will they:

1) go along with this game and brand restric/gate
2) will they love the idea of a $1000 fee so much that they will try to make it happen there
3) will they demand that sellers get permission

OR

4) they open and embrace the disenfranchised Amazon sellers and make eBay "the place to get these items" ....


only time will tell!

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: ignatz This user has validated their user name.

Mon Aug 29 10:41:16 2016

As Amazon continues to push the small seller off its platform, the opportunity for eBay continues to grow.  Will eBay take advantage of it and do what it should to draw the small sellers back?  Don't know, but I'm not holding my breath!

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: toolguy

Mon Aug 29 11:42:00 2016

Here's what eBay should do.

----->Buy it on eBay get a chance to win a new car!<------

Each week eBay should give away a new car to a lucky eBay customer.

Everyone who buys an item is entered into the contest, each week a random drawing for a winner.

It might just bring back the buyers who left for raging waters. . .

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: iheartjacksparrow

Mon Aug 29 12:23:02 2016

@toolguy - And who do you think is going to pay for this car every week? eBay? Even if they can get the cars at dealer prices I can't see them giving away thousands of dollars every week. How long do you think that publicity will take them? They could be using that money to do a major advertising blitz, or fixing their search so people can actually find what they want to buy.

Since eBay always copies what Amazon is doing, I'm guessing they'll offer the same type of program for less money, maybe $500.
 

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: toolguy

Mon Aug 29 12:46:43 2016

@iheartjacksparrow

A car a week isn't even as much as eBay spends on drinks & snacks for the executive break rooms!

If a little indian casino by my house can give away a car a week so can eBay.

$19,000 x 52 = $1 million


$1 million is peanuts! eBay makes 2000 times that each year, about $2 billion!

Anything eBay does is paid for buy the ebay sellers. . .You & Me

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: Marie

Mon Aug 29 13:02:29 2016

Actually a sweepstake with something of real value is a really good idea, however I'm with Jack that a car is probably a bit more than Ebay would ever be willing to do.  And I personally think that a week is too short a period of time.

To really encourage shopping do something per month and/or quarter.  Each purchase automatically enters you in the sweepstake.  And maybe have 3 cash prizes.  

Not a worldwide contest.  The US site has it's own, Canada theirs and so forth.  It would make the odds better for the buyers.

Anyway I could get more detailed, but it probably isn't necessary.  it's not like Ebay is going to listen to us.  But for this I think Toolguy has a good idea, it just needs a little tweaking.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: bitbybit

Mon Aug 29 14:52:10 2016

...it just needs a little tweaking

Yeah I am sure the results would be tweaked as well.

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: mcposty This user has validated their user name.

Mon Aug 29 15:19:04 2016

If I was amazon I would tell brands to shut up about third party sellers, they have a right to sell these things as long as they are not fake.

The first sale doctrine.

Amazon and all these marketplaces allow fake chinese crap but takevaway legitimate sellers rights.

I hate amazon and evay buncha blow hards who dont fight for their sellers

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

This user has validated their user name. by: WdrWmn

Mon Aug 29 15:26:02 2016

I have to laugh, when I read the article no offense to the writer of the article, as I'm sure she is just quoting her sources.  By the way, I LOVE YOUR ARTICLES INA!   But, the comments are funny too.  I'm a long time ebayer (since 1998), but I also sell on Amazon(since 1999, we did auctions back then on amazon).  For a long time, I ran my business on both sites without regret and made alot of money.  But, overtime I noticed changes in the business concepts between ebay and amazon.  Yes, of course the fees.  Yes, of course the rules & policies.  But, more so the traffic and buyers.   For some reason, I sell alot more on ebay lately than I do amazon.  In fact, For every 30 items I sell on ebay, I only sell 1 on amazon.  

I think the amazon system has changed over time.  Yes, there probably is too an abundance of sellers selling similar or same products.  But, I still sell those same products on ebay.  My conclusion is the traffic.  I did alittle research and the traffic is abit more higher on ebay, and the buyers are willing to spend more money on ebay than amazon.  Even though, amazon has FREE shipping with prime, I also provide FREE shipping on ebay and can still make a good profit selling the items at the same prices...

But, one thing is clear nothing ever is same between amazon and ebay.  IN fact, I foresee that ebay might even take advantage of the increase of fees on amazon and start introducing FREE promotions to entice the amazon seller to sell on ebay.  OR its possible alot of people are already moving some of their products onto ebay and maybe not admitting it (for whatever reason?).  As far as my business is concerned, I have recalled all my products from the fulfillment centers and only sell products on amazon, that I can ship myself.  I think this opening of fulfillment centers by amazon, is only going to continue to raise more prices.  Whereas, ebay can remain constant for the time being because they have no fullfillment centers to meet.  Now I'm not being anti-amazon here.  

I'm still selling a few items on amazon here and there.  I'm hoping my sales pickup on amazon, I really do!  And maybe I'm completely wrong?   But, I just don't see how everyone is surprised by this notion of raised fees on amazon?   Amazon was eventually going to raise there fees...  And I'm sure with the opening of fulfillment centers and all of this other expanded categories, and other such services...  I'm very Leary of what future holds in amazon's business for hobbyists or small business owners?   Honestly, I can see us small business owners being forced out completely or maybe even medium-sized business may take a step-down.  Hobbyists may move elsewhere or stop altogether.  

But, my biggest concern and I guarantee you, the fees are not going to stop as described in the article above.  I'm seeing way too many fee changes with amazon within the last 2 years.  I can bet, that the prime membership, is once again going to be raise, or might be required at some point to be part of the amazon community.  I can foresee store seller subscriptions changing again to pay for the fulfillment centers opening up....  But, one thing that you have to remember amazon is a business, and they are going to do what suits there needs not the needs of business owners...  I don't know?  Any thoughts?

What's Behind Amazon's Shocking New Seller Fee?   What's Behind Amazon's Shocking New Seller Fee?

by: Mark4 This user has validated their user name.

Mon Aug 29 17:11:22 2016

Bonanza.com folks. This is the new ebay.   Amazon and Ebay suck anymore, Bonanza is awesome. We left both ebay and amazon and now only sell on here and we get more  sales than when we were on ebay and Amazon.  

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