EcommerceBytes-NewsFlash, Number 3005 - February 20, 2013     1 of 5

Amazon Raises Fees in Media Categories

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Amazon.com is raising fees for certain media categories in April, sellers learned on Tuesday, and it is also raising credits for shipping. The Variable Closing fee for Music, Video, and DVD products will increase from $0.80 to $1.35 - the same cost as Books and Software/Video Games - and will take effect for seller-fulfilled orders beginning April 24, 2013. However, the new fee won't take effect on Fulfillment by Amazon (FBA) orders until next year, on April 24, 2014.

Amazon is also increasing seller shipping credits for Music, Video, and DVD products for seller-fulfilled orders from $2.98 to $3.99 for domestic standard, and from $5.19 to $6.19 for domestic expedited. Those fees will also go into effect on April 24, 2013.

Amazon.com Fee Changes, April 24, 2013

Media Categories Current Fee Fees as of April Difference
Variable Closing Fee

$0.80

$1.35

55 cents - 69%
Shipping Credits - Domestic Standard

$2.98

$3.99

$1.01 - 34%
Shipping Credits - Domestic Expedited

$5.19

$6.19

$1.00 - 19%

John Baker, who goes by the handle bestbookshelf on Amazon, called the increase in fees substantial when added to the recent increase in FBA fees and increased postal costs. He expects his sales to drop until the fees increase for all sellers, including sellers using FBA.

"For instance," he said, "I use a scanner when buying (NeatOScan) and I set the scanner to reject any item whose FBA selling price is below my calculated minimum (thus leaving pricing room for a small profit for me). The recent increases to postal fees and to Amazon FBA fees combined to raise that threshold for a used, single-disc music CD in a jewel case by 13.1%. And now this latest increase will raise it an additional 12.9% from the December, 2012, figure. Of course, FBA sellers have a year's leeway. A year from now, when the change is applied to FBA sales, I would suspect that the FBA market prices for most items will go up - a rising tide raises all boats - as sellers adjust their business models. But until all items with unadjusted prices have been flushed out of the system, I reckon my gross sales will drop. The buyers will still want to get the best deal they can."

Baker believes Amazon is hoping the split timing of the fee increase will motivate more sellers to migrate their business to FBA, he said. As for the increase in seller shipping credits for merchant-fulfilled sales, he said it is welcome and "pretty realistic."

Amazon also announced a new policy in which it will adjust seller fees based on actual shipping carrier costs. Amazon explained Shipping Services - Carrier Adjustments, writing, "When you purchase shipping services, the carrier charges are based on the information you provide for the package. Carriers subsequently send Amazon reports with details of the services they have provided to you. If a charge from a carrier is different from the original charge for the shipping services you purchased, a carrier adjustment may be applied to your seller account. Carrier adjustments can be charges or credits, and they appear in the payments reports in your seller account, though not necessarily in the same settlement period as the original purchase."

The marketplace also had some good news for sellers on Monday, announcing it was adding a "Cancel Order" link to buyer-seller messaging emails. "We have launched a new feature that allows buyers to cancel an order without affecting Seller Ratings," according to the announcement. "Seller-to-buyer messages now contain new text in the footer that reads "To cancel your order, please click here." When the buyer clicks the link, they are guided through the order cancellation process. Orders cancelled in this manner will be marked as buyer-requested."

Readers can learn more about the Buyer-Seller Messaging Service here.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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