Sellers who list items on Amazon that can be shipped in small envelopes are struggling with a policy change that could impact their profitability in a big way. The policy change will impact sellers of low-price ephemera and collectibles such as stamps and trading cards and is somewhat similar to an eBay change in 2012
that impacted sellers' ability to retain Top Rated Seller status.
Effective October 12, 2016, Amazon's package tracking requirement will extend to small and light items that are priced over $10 USD (including shipping).
Previously Amazon exempted small items from its Valid Tracking Rate - the policy states:
"You are required to provide valid tracking numbers for 95% of your U.S. shipments, not including items shipped by freight with a carrier not integrated with Amazon or small items (such as screen protectors, greeting cards, etc.) that are shipped in Standard Mail envelopes or First Class Mail envelopes."
But next month, Amazon will require tracking for small and light items over $10. Here's why: "Amazon displays package tracking information buyers because we find that being able to check an order's shipment status and not worry about its whereabouts creates a better experience for buyers. This peace of mind is especially important for higher-priced orders."
Amazon has a suggestion for sellers, but it will still result in higher shipping costs:
"If you choose to fulfill the tracking requirement by shipping your item as a parcel, there may be a $1-2 increase in base shipping cost but you will receive complimentary tracking on the parcel. You can access parcel rates while using the same packaging that you typically use by wrapping your item lightly in bubble wrap before putting it in the packaging, such that the thickness is more than 3/4" thick."
What are the consequences of not complying with the new policy? You risk losing your ability to sell non-FBA items within that category.
A seller on the Amazon boards described the dilemma - it costs the seller $2.60 for a tracked package, and it costs 50 cents for an envelope. "We will be adding tracking to what we need to in order to meet policy, we are just going to have to change a lot of costs to make up for the extra two dollars of shipping costs. We work on very low margins, so its way more of a problem than one may expect."