Amazon announced fee changes on Wednesday that will make it cheaper to sell in certain categories (via referral fee reductions), and will generally make it more expensive to use Amazon's FBA fulfillment services. However, sellers were very pleased to learn Amazon was lowering FBA long term storage fees.
While some sellers seemed unclear upon hearing the news, the referral fee changes impact all sellers, whether or not they use FBA.
Why the lower referral fees? To increase product selection on Amazon.
While Amazon noted increased costs to ship and deliver orders, it also said it has improved efficiency across its fulfillment network.
As a result of both the referral and FBA fee changes, Amazon said 60% of FBA units shipped would see higher costs for sellers, while it expects over 40% of FBA units shipped to experience no change, or even a decrease.
In addition, Amazon is introducing separate fulfillment fees for dangerous goods that contain flammable or pressurized aerosol substances and items containing lithium ion batteries. For example, a small standard item with a shipping weight of 10 ounces or less and a packaging weight of 4 ounces will incur an additional $3.27 dangerous-good fulfillment fee as of February 19, 2019 - and the fees go up from there as the size increases.
Amazon is also introducing separate monthly storage fees for dangerous goods that contain flammable or pressurized aerosol substances.
It's easy to see why - earlier this month, news outlets reported that some Amazon warehouse workers in New Jersey were sent to the hospital after a robot punctured a can of bear repellent.
Amazon is giving sellers 2 months to prepare for the fee changes, most of which go into effect in mid-February.
EcommerceBytes obtained the notification Amazon sent to sellers on the changes to referral fees effective February 19, 2019.
Referral fee reductions:
- 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).
Explaining the move, Amazon wrote in its letter to sellers, "This year, we are lowering our referral and minimum referral fees across categories to help you increase your selection of products."
Let us know what you think of the new fee structure and how they impact you. And as always, thanks to readers for sharing the info.