BREAKING: Amazon Seller Central 2024 Fee Changes
Let’s face it. Fee change announcements scare all of us. This one was no different when it hit our inboxes this afternoon. After scrutinizing all the changes, I can honestly say there are a few positives. However, it is clear that Amazon is focused on rewarding sellers with minimal packaging/returns, high turn SKUs and low priced apparel items to combat Shein (fast fashion etailer) and Temu (top shopping app):
Positive: Apparel sellers will see a DECREASE in referral fees for items <$20 retail. Those items <$15 will see referral fees lowered from 17% to 5% and those items $15-$20 will see referral fees lowered from 17% to 10%. This clearly indicates Amazon’s FEAR of Shein and Temu taking market share on lower priced apparel.
Positive: Non-peak standard inventory charges will decrease to drive higher inventory levels for top selling items. Additionally most items will see a decrease in fulfillment rates.
Negative: Items with excessive returns relative to the classification will be penalized excluding shoes and clothing.
Negative: Inbound for standard/oversize will increase when shipping to single location along with increased fees for removal and disposal.
How can we as sellers combat the changes?
Cut the catalog to only top performers - FBA should be held for top items. FBM should be a part of every sellers arsenal.
Increase prices - Amazon continues to command the best conversion of any eCommerce site in history. Prices can be increased on items with strong performance.
Ship direct - As noted in previous letters, Amazon wants to own the supply chain. The value of shipping direct from factory for select SKUs is significant.
All in all, Amazon notes that fee changes in 2024 will increase the the average seller’s fees $0.15 in fees per unit sold. However, Amazon reports a number of sellers will see a significant decrease and Amazon self reports that fees will continue to remain an average of 70% less expensive than two-day shipping methods offered by other major third-party logistics providers. The full text can be found here.
Our team will be in-touch to specify the impact to each of you. We will continue to advise where we believe change will be to your benefit and how we can mitigate where it isn’t.
Thank you for your continued business,
Ryan Craver
Learn about the new changes for Vendor Central 1P clients here.
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