Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue June 2 2015 20:48:50

Eight Things to Know about Amazon's New FBA Small and Light

By: Ina Steiner

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Amazon introduced a brand new offering for third-party merchants called Amazon FBA Small and Light, and it breaks some of the traditional "rules" of Fulfillment by Amazon. 

Anyone who's come across "Add-on" items on Amazon understands that the marketplace is just not willing or able to offer free 2-day shipping on all of its low-cost items. The FBA S&L program is designed to increase the selection of cheap goods that are available on the site and offer free shipping.




Through the new program, Amazon is able to offer greater selection; merchants can capitalize on Amazon's economies of scale with regard to shipping and fulfillment costs; and customers can get free shipping on a single-item orders, though it will take Prime members longer to receive them than they're used to getting Amazon orders.

We've got details in Wednesday's Newsflash, in the meantime, here are eight things for merchants to know about the new FBA Small and Light program:

1) Like Standard FBA, merchants send the S&L items to Amazon, which handles customer service and returns.

2) Unlike Standard FBA, there's no free 2-day shipping available to Prime members. 

3) All Small and Light items are shipped "FREE Standard Shipping" (4-8 business days) to all customers, both Prime and non-Prime members.

4) It's cheaper to use the program than to use regular FBA (or to ship the items yourself, according to Amazon). A one-ounce item costs $1.90 plus the marketplace fee (commission), which is a minimum of $1 that all Amazon 3P merchants pay.

5) Even if sellers have elected not to commingle their FBA inventory, Amazon may commingle Small and Light items with other sellers' units, and tracking of inventory provenance may not be available. (Enrolling in the new program does not affect sellers' commingling preferences for units outside of the program.)

6) There are thousands of products available through the program from hundreds of sellers. Products include lipstick, trading cards, stickers, memory sticks, pipe cleaners, ear plugs, and iPhone accessories.

7) While the program is being marketed to merchants, Amazon admitted it's offering some items itself ("retail" as opposed to 3P).

8) Amazon built a brand new FBA warehouse dedicated to Small & Light in Kentucky that became operational in Q4.

Neil Ackerman has led the product management team for FBA Small and Light and told EcommerceBytes they set out to offer a program that would be less expensive for third-party merchants than the cost of fulfilling those items themselves.

Is Amazon using third-party merchants to take the risk of selling these goods? "The risk is extremely low," said Ackerman, because they're limiting the program to fast-moving ASINs. Amazon hasn't seen any slow movers in the 13 weeks since testing the program, but would reach out to a merchant right away if they saw a slow turn.

See more information about the program in Wednesday's EcommerceBytes Newsflash.




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Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: sasikat9 This user has validated their user name.

Wed Jun 3 06:44:25 2015

Oh No Amazon will soon become a Chinese Junk sellers paradise.

Amazon is taking a page from Ebay.

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: Will This user has validated their user name.

Wed Jun 3 09:31:00 2015

Actually, this seems more about hammering the final nail in eBay's coffin.

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: This a joke, right? This user has validated their user name.
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Wed Jun 3 18:56:56 2015

I guess I am just stupid. I sell a lot of small & light items but don't see how this will work for me.
I have reached out to the FBA guy who has been harassing me but haven't heard back from him yet.
I am thinking about deleting all of my small items from Amazon since I am making more on them on Etsy and eBay

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: Moonwishes This user has validated their user name.
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Thu Jun 4 02:20:23 2015

Am I missing something? Where is the charge for storage of all these goods? I don't see that mingled in with the other charges. Also there is the cost to ship all these items to Kentucky and hope you picked your fast movers so you don't get a call from Amazon because your stuff isn't moving fast enough. Their price charts are confusing as they seem to be comparing oranges to bolts to . Will there be a difference in costs for the professional seller (originally called a pro-merchant) and the none professional? If the professional seller signs up and is making most of his sales through the small and light FBA and has to pay the same fees as the non-professional then Amazon is in a sense 'double-dipping'. I know as seller, I don't want to be charged $39.99/month and then also be charged the fees to S&L. In their nice chart of costs, they seem to have also left out the commission costs which would also have a bearing on what it actually costs to use this program.

Most of the FBA sellers that I see in my travels around Amazon all have the rock bottom prices that if they sell somethings they are barely going to make it worth their while. I haven't heard of any of FBA sellers making good money at what they do. It is like they take the easiest route and then wait for the money to roll in. I prefer to handle all the aspects of my business and make more money that way.

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: littlem1 This user has validated their user name.

Thu Jun 4 08:39:14 2015

Moonwishes, A lot of people make great money on FBA. Not trying to sound snobby but your whole comment seems to be bashing Amazon. I make more money on Amazon than I ever made on ebay, but hey it all depends on your business model. Its great that you are successful without Amazon, but for many people it is the most successful platform they sell on  

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

This user has validated their user name. by: Tula

Thu Jun 4 13:07:17 2015

@Moonwishes: I agree. Worse, is that they also want items priced under $10. By the time you add up all the fees, storage, and shipping costs, there's not much left for profit. FBA works best for higher-priced commodity goods with lots of demand. Most of what I sell is either vintage or unique and tends to be more long-tail, so FBA won't work for me. I do just fine on Amazon doing self-fulfillment.

Smaller goods are also easier and faster to pack and ship yourself, so the FBA advantage isn't as great unless you're selling thousands of the same SKU and making your money on volume (like Amazon does with its own offerings).

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

This user has validated their user name. by: IDKwhoIare

Thu Jun 4 16:04:03 2015

Let's say I make earrings to sell in this fashion.  Each pair taking 1/2 hour to make including individual packaging. They sell them for $10/pr.  I am paying them 19% S/H, 15% fee/commission, material cost at approx 33%.  Subtract $0.02 per unit for shipping them to Amazon.  Assuming there are no other costs, [ie: storage fees, $39.99 Pro status for selling jewelry, etc] that gets me a $6.58 an hour wage.   Once I factor in the time to purchase & manage supplies, keep on top of Amazon and the paperwork for income taxes,  my wage would be $3.29 an hour.  I smell a loss leader for Amazon and nothing but starvation and boring, repetitive work for me.

Sounds like a great way for cheap Chinese junk to be sold.  If a person could come up with some widget people would be willing to pay $10 for that cost the Seller under $1 and no time investment AND they sold millions of units (no guarantee)...then it might be feasible.

Maybe I am missing something...but I don't think so.

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

This user has validated their user name. by: askalice59

Sat Jun 6 14:02:27 2015

To quote Amazon in the Terms section of Small & Light, ''Amazon reserves the right to suppress offers that are not competitive.'' That always gives me confidence.

Them saying an item can list for up to $10 only doesn't leave much wiggle room and since we would not be reimbursed for shipping but actually charged for it, there will or should be no one cent sellers, or will there?

I think it might help me in terms of the buyer seeing free shipping instead of shipping that costs as much as the item. The fees aren't much less than regular FBA, for me anyway. What I don't understand is would I have to sign on as a pro seller? No?

My Fisrt Class PKG shipments from home take usually 2-5 days to anywhere in the US. Amazon predicts up to 8 days.

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: AlexParker This user has validated their user name.
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Sun Jun 7 08:45:21 2015

It´s not only Amazon vs. eBay, time has come to pay attention to Alibaba! "Operating income at China’s biggest e-commerce operator rose to $1.1 billion in the three months ended June, or 42 percent more than the combined profit of Amazon and EBay for the period. After including one-time gains, Alibaba’s net income was more than double those of its competitors."

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: drewmark This user has validated their user name.

Sun Jun 14 00:18:00 2015

Well team I don't know about you but its time to let go of ebay and amazon and all these other selling sites and time to build our own to suit our needs and thus saving the buyer in shipping by including all fed ex, USPS, UPS, DHL services.  All these other seller sites just don't met my expectations at 100%!

Perminate Link for Eight Things to Know about Amazon's New FBA Small and Light   Eight Things to Know about Amazon's New FBA Small and Light

by: ETRUTH This user has validated their user name.

Tue Jun 30 13:02:14 2015

Not sure but what happens to the merchandise when a seller goes out of business does Amazon gain possession and then sell it at extremely low prices disrupting the market



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