- In September 2018, Amazon hiked its long-term storage fees. The good news is that they’re set to lower it again! Starting February 15th, 2019, the new storage fees will come into effect.
- Referral fees for certain categories of products, provided they’re under a certain cost, is also set to come down. It will come into effect from February 19th, 2019.
For anyone who been signed up as an Amazon Seller for at least a year, that is from the beginning of 2018, you would clearly remember that Amazon increased their long-term storage fees in the September of 2018 just to shake things up. The move wasn’t appreciated by the Sellers and everyone panicked and ran promotions like crazy to get rid of any access stock they were storing at the Amazon warehouses, just to save some extra amount.
However, 2019 brings with it some much-required good news. According to Amazon, “over 40% of FBA units shipped to experience no change—or even a decrease”. That’s certainly good! In a mail sent to all Amazon Sellers in December, these changes were detailed and how they would affect them was also spelled out. Let’s see it for ourselves:
How will Fulfillment fees be affected:
Amazon’s Fulfillment Fees are, in fact, very good at the moment. But there’s even better news on the horizon. They will continue to remain so as Amazon is not making any change to its Fulfillment Fees! This is especially great considering all that is included in the fee. Amazon picks, packs and ships your products for you for a simple nominal amount.
In fact, it would come as an absolute surprise if Amazon raised its FBA Fees anytime soon. After all, this helps makes them get the most number of sellers and ensure perfect delivery time for all products, thus keeping their consumers happy.
However, those Sellers storing and selling an oversized product will have to shell out a little more compared to earlier prices. You can check these out on the Amazon website.
A change in fees has also been implemented to what Amazon considers ‘dangerous products/goods’. These include products that contain lithium batteries. This is also another step that is being taken positively by many, especially considering that not only these products can be potentially dangerous while storing and shipping and also because there are potential dangers associated with the handling of such products, leading to them having their own fees.
Storage Fees
Let us say this upfront, it is an excellent initiative by Amazon to lower their storage fees. This will make it even easier and attractive for potential sellers to consider choosing Amazon over any other third-party service simply because of all the extra services making their lives easy. Who wants to worry about the ever-rising costs of warehouses, transportation and logistics and deal with all the maintenance issues related to these three! When Amazon is ready to take it all off your shoulders at a nominal fee, it would be stupid to not take advantage of their service, especially because they’ve been in the business far longer and know exactly what they’re doing.
In September 2018, sellers took a hit when Amazon increased its long-term storage fees. Quite a lot of inventory was either moved around, sold for less than cost price or even sent back to the sellers’ personal warehouses to avoid shelling extra costs for inventory that is just sitting there. Overall, Sellers did not appreciate this move by Amazon.
It seems like Amazon heard their grievances and is willing to mend broken fences by eliminating long-term storage fees for units that have been in a fulfillment center for 181-365 days. Not only does this save money on third-party warehousing services for Sellers, it also helps cut down inventory removal fees for those Sellers who sent in more stock than required to Amazon warehouse.
Referral Fees
There’s good news on this front as well. Amazon is lowering the referral fees for some categories under a certain amount. This could be a move on the part of Amazon to increase sales of what it considers ‘impulse buys’, for example, items under $15 or less. This is a great news for those selling products that fall under following categories: Grocery and Gourmet Products, Jewellery and Watches, Certain Furniture items, Beauty, Health and Personal Care, Baby Products, etc. According to statistics, most impulse buys are from these categories. So, if you’re not already selling under these categories, it is well worth a look at some products that you could sell under $15 to save referral fees and sell impulse products at the same time!
What is the key take-away from all this?
If you are one of the sellers who received the email from Amazon notifying you of these changes, you would’ve realized one thing: Amazon is trying really hard to make their Fulfillment by Amazon program even more effective and efficient than it already is. One central way of doing this is by making it the cheapest possible such service. This is a great opportunity for sellers to become a part of it as soon as possible before we see any other policy changes.
We know for the fact that Amazon is perfectly legal and all its dealings are transparent, so Sellers are not being taken for a ride. But through this latest initiative, we also understand that Amazon is truly committed to making its marketplace as inviting as possible for existing and potential sellers.
The fee change is not just a good news for all the sellers using the services of Amazon, but for just about anyone who is trying to do business with Amazon as it depicts how Amazon is committed to making online selling a profitable and safe space for consumers, sellers, workers and executives. Amazon’s initiatives will make the process easier with other websites too. After all, Amazon is a pioneer in this space and is paving the way for an overhaul of online shopping.
