Seller costs have risen again.
At the end of the year, Amazon has also recently updated new policies such as logistics fees and referral fees for 2024, and this updated policy will take effect from January 2024.
At first glance, the policy update is Amazon's concession to sellers, but on the whole, the cost of sellers is still rising. Long-term storage fees will be charged for too much inventory, and low-volume inventory fees will be charged for too low inventory, and a sentence will be attached to the QA part of each surcharge page, "As long as you use AWD, you will not be charged these two surcharges".
It's just on the surface, but for items such as storage utilization surcharge and pretreatment service fee, Amazon has not elaborated on it, but it is also raising prices, but I am afraid that the seller at this moment is already sweating.
In order to cope with the impact of prices on other platforms, Amazon tried to resist stubbornly through policy changes again and again, but the policy changes N times a year did not make most sellers usher in explosive orders, but constantly cleaned sellers out of the table.
This time, Amazon may want to regain the market with the clothing category. Reducing the commission of the clothing category is a good thing for some sellers, but the overall reduction of the commission will inevitably increase the possibility of Amazon sellers fighting the first battle for the order volume. It may be more difficult for sellers who want to complete their performance, and sellers who want to stay at the table will have to increase their stakes.
Amazon's policy has been greatly updated, and these fees are going to rise again
In the early morning of December 6th, Amazon USA updated its logistics fees and sales commission policies, and on the whole, sellers may have to pay two more surcharges in some cases, and at the same time, the storage utilization surcharge that Amazon did not elaborate on is also rising. Although some fees have been reduced, it does not seem to be a big discount, and the degree of reduction is no different from no reduction.
There are 2 new surcharges, and the storage utilization surcharge is also rising
1. Inbound configuration service fee (new).
If the seller is unable to fully comply with the system's recommendations for warehousing, that is, the inventory is not sufficient, and the warehousing location cannot meet Amazon's distribution requirements, Amazon will transfer the seller's inventory and charge relevant fees: an average of 0$27;Large oversize items are charged an average of $1 per item$58. (Effective March 1, 2024 (U.S. time).
This is the first time Amazon has mentioned the expense, and Amazon's launch of this policy can be said to be making money, or it may be an attempt to change the status quo of frequent warehouse explosions and uneven warehouse use in the United States.
As we all know, the West of the United States is close to China, the shipping time is short and the freight is low, many sellers will choose to ship the goods to the West of the United States warehouse, coupled with some bad freight forwarders to seek violence, the goods in remote areas are sent to the West of the United States warehouse nearby, resulting in frequent warehouse explosions in the West of the United States, especially in some peak seasons.
According to the policy, if the seller accepts the warehouse recommended by Amazon, that is, the East American medium warehouse, Amazon will charge less, or even no fees. However, if the seller still wants to send to some popular warehouses, that is, Meixi, they must charge the corresponding surcharge. Of course, sellers can also choose Amazon's distribution network or global logistics to avoid this fee.
2. Low inventory fee (new).
Charged for standard-size products, for products whose inventory levels have been too low for a long time relative to their sales volume. Sellers can avoid paying this fee as long as they maintain inventory for more than four weeks based on product sales. (Effective April 1, 2024, U.S. time).
The product sells well but the inventory is small, and the inventory fee is low;If you have more inventory and can't sell it, you will be charged long-term storage fees, or even redundancy feesSell well but return more to charge, more goods and less "cut", which can not run, but people have to sigh that they will play.
As far as low-volume inventory fees are concerned, the products sell well and are even out of stock, which also means that the expenditure on commissions and advertising links is also less, which is a good thing for sellers, but for Amazon, the income in this area is afraid to decrease, so there is the emergence of the policy of low-volume inventory fees.
Could it be that my products are sold out, and I will also be charged a surcharge," some sellers questioned, whether there will be a out-of-stock charging standard in the future. A toy category store bluntly said that it is afraid of redundancy in the peak season, and there is not much stock in general, and the policy has a great impact on its cash flow as soon as it comes out.
In contrast, the most suffering is the seller of seasonal products, who have to re-launch every year, and there are overdue storage fees waiting for them, which is undoubtedly testing the seller's inventory management level. Some industry insiders have suggested that seasonal product sellers, if the stock is relatively sufficient in the early stage, and the average inventory of the past 30 90 is larger, they can increase the number of historical days.
However, some sellers believe that there is no need to collectively look down, because there are not many SKUs that meet this condition, and the number of product inventory turnover days is less than 28 days (average daily inventory divided by average daily sales), and the past 90 days and the past 30 days have maintained this level.
Of course, Amazon's commotion hasn't stopped. In the QA section at the bottom of these two surcharge pages, there will be a sentence "as long as you use AWD, you will not be charged these two surcharges", which can be described as a blatant publicity, so that sellers can use its a** and a**.
3. Surcharge on storage utilization, etc. (**
Some of the policies mentioned above are only detailed by Amazon in this policy, but items such as storage utilization surcharges, prep fees, and inbound defect service fees have also been updated annually.
Among them, the storage utilization surcharge has been collected from 26 weeks to 22 weeks, and higher fees are charged in different gradesThe overage surcharge is 270-365 from 38/4.2 to 545/5.9, ** amplitude reached 17 or so.
In addition to the particularly good inventory control, most companies have overage inventory, and many sellers have been charged very high fees this year because of overage and high weeks of storage utilization. It can be said that Amazon's wave of operations directly grasps the pain points of sellers.
In addition, including high return rate product return processing fees, excess inventory related fees will also be updated annually, and they are also in the first state, I don't know if the current sellers have sweated.
Some of the fees are reduced, but it is impossible for Amazon to make profits
When the price rises, it rattles, but when it falls, it picks and searches" is a perfect way to describe Amazon at this moment.
1. Logistics and distribution costs.
In its announcement, Amazon mentioned that sellers will enjoy lower fulfillment costs, i.e., FBA fulfillment fees have been reduced, with standard-size products reducing by 0$20;Large oversize items will be reduced by 0 on average61 USD. However, according to previous data, the cost during the peak season was reduced by 0$3.
2. The goods are shipped in their original packaging.
Eligible products can be shipped directly in their own packaging, and Amazon will provide 0$04 to $1$32 discount on fulfillment fees (depending on item size and weight). Some sellers broke the news that some customers complained that they received transparent bags, Amazon did not give the outer packaging, and there was no delivery fee reduction when checking orders, which sellers need to pay attention to.
3. Monthly storage fee.
From January to September, off-peak monthly storage fees for standard-size items average $0 per cubic foot87 drops to an average of $0 per cubic foot78, an average reduction of $0 per cubic foot09。Here, sellers need to pay attention to standard-sized products that are only for non-peak season. When the peak season rises, 0A few have risen, but now the cost of reducing is 00 a few drops, converted to ** minbi a comparison, it seems to have dropped and not dropped.
In addition to the above, there is a not-so-obvious point that products under $10 will automatically receive a low-priced FBA rate with the same delivery speed as a standard FBA. At the same time, ** products under $10 can continue to enjoy 0. per item$77 additional commission discount. It can be seen that Amazon is still competing for the fat of the low customer unit price market.
Overall, while some of Amazon's policies have reduced fees, the reductions are not enough to outweigh the increases, and sellers are expected to see an increase of 0$15. It can be said that the costs saved by the price reduction are attached to other places, and the overall delivery cost of sellers will still increase next year, and they are also facing multiple challenges such as inventory management.
In addition, Amazon also mentioned in the announcement policies such as Amazon fulfillment rates for low-priced goods and new product warehousing discount programs, which seem to support the fact that Amazon is screening and shuffling sellers through a series of adjustments, accelerating the elimination of the weak, and at the same time competing against the platform.
In order to counter platforms such as Temu, Amazon will place its hopes on clothing sellers
Looking at the current U.S. e-commerce market, it has changed from Amazon's dominance to a number of competing positions, including temu, tiktok, and shein's fierce attacks on the field, especially during this year's Black Friday, they ate most of the orders in the U.S. market, and the good news of frequent orders has been reported, while Amazon sellers can only sigh at the declining orders.
In order to break this situation, Amazon may also be pinning its hopes on clothing sellers.
In this adjustment, Amazon has reduced the commission for clothing products, specifically: for clothing products priced below $15, the sales fee will be reduced from 17% to 5%;For apparel products priced between $15 and $20, the referral fee will be reduced from 17% to 10%. Referral fees for other product categories will remain the same. (Effective January 15, 2024, U.S. time).
As soon as the news came out, the first feeling of many clothing sellers was joy
It's a rare sight, and it's better than nothing.
For the low-cost liquidation, it is not so much of a loss.
After so many years of rising, has Amazon finally found its conscience?
Reducing the commission of the clothing category is indeed a good thing for clothing sellers. However, there are also some sellers who hold a different view: "Everyone's commission has dropped, which is equivalent to not dropping, and it is difficult to say whether the order volume will rise or not, and it is true that sales will probably fall." ”
The reduction of the commission ratio means that the seller's profit margin increases, but for the category of clothing, the volume still has to be rolled, or even more rolled. In order to seize more orders, sellers may continue to reduce prices, and the products in this category will be lower next year. The overall decline in clothing within $20 on the Amazon platform will not only impact small and medium-sized sellers, but may also have an impact on the clothing categories of platforms such as temu.
It can be said that Amazon's reduction of commissions for clothing products is not for the sake of sellers, but for the sake of countering the platform.
Especially in the recent period, the stock price of Temu has risen sharply, and the impact on Amazon has been quite drastic. As the main battlefield of temu, shein and other platforms, most of the goods are only one-third of Amazon's, Amazon wants to grab traffic, pry its foundation, only to fight, industry insiders speculate, it is not ruled out that Amazon will later expand the "commission reduction amount" to 25 US dollars, or even 30 US dollars.
But Amazon also has a disadvantage, that is, the freight cost of FBA is higher than that of China's centralized air freight to the United States, and the timeliness is longer. Especially for new products, the goods sent out by Temu may have been received by American consumers, but Amazon's warehouse may still be bursting, or internal transit, so that sellers can not start selling for a long time.
This also makes Amazon's launch time slower than that of platforms such as TMEU, and Amazon may seem a little outdated in the clothing category with a short window period.
Sellers do not agree with Amazon's low-price strategy, but believe that Amazon simply cannot pry the foundation of platforms such as temu. Assuming that in the next few years, Temu continues to implement a strategic subsidy loss policy, Amazon's further compression** and improved logistics may not help.
However, Amazon's wave of commission-reducing operations may be good for some sellers, that is, the product ** in 14$99 and $19$99 seller. Previously, many sellers who were stuck at a low-cost delivery fee of $12 were not, but after Amazon changed the low-cost delivery fee, many merchants either chose 9$99, or the price increase, which is currently $9$99 is in full bloom, and it can only be said that in the end, sellers will still choose to reduce prices, and it is Amazon that makes a profit.
Now the refund of a piece of goods costs $3 more than before," said a clothing seller helplessly. It is understood that the return of this category was charged 20% of the sales commission before, but now it is charged according to the size, which is a lot more than before.
On the other hand, Amazon may also be using this move to accelerate the pace of screening sellers. In this war, a wave of sellers will be eliminated, and the platform will match more resources to the powerful sellers who remain.
In the Q3 quarter of this year, Amazon released a net profit of $9.9 billion, which can be described as explosive, but who is the biggest contributor to this profit?It is nothing more than the seller's advertising fees, shipping fees and storage fees, and Amazon is only profitable if the seller's expenses are overwhelmed.
Amazon's profits are not as good as other platforms now," a seller said bluntly, considering whether to shut it down. In fact, the seller's remarks also reflect the current situation of sellers on the Amazon platform, most of the big sales profits are still the same as in previous years, or even a lot, and the profits of small and medium-sized sellers can be imagined.
Although the commission of the clothing category is reduced, other expenses are in the **, especially under the high advertising fee and refund rate, it is undoubtedly a backstab seller, and in the long run, the seller is likely to enter the era of meager profits, or even make ends meet.
Competition intensifies, profits disappear, how can sellers break the situation in 2024?
With less than a month to go until the end of 2023, have you achieved the performance goals you set at the beginning of the year?I believe that most Amazon sellers will give a negative answer. Indeed, relevant data show that in the first half of this year, more than 6 percent of sellers' revenue and profits fell short of expectations.
Since the beginning of this year, there have been more voices in the industry than the decline in profits and the decline in orders, even in the peak season when orders must explode every year, many sellers have a more intuitive feeling that orders have plummeted, so that many sellers sigh that this year is the most difficult year since the industry.
In the past, a single order could earn at least about 50 yuan, but now it can only earn about 20 yuan, "This is the status quo of many sellers." Profits are declining, and sellers are the most direct feelers, and the performance may have increased, but the profits have not increased;The performance has declined, and the profit is a cliff**.
Multiple categories are rolling **, which seems to have become an uncommon consensus in the circle. Not only are the head links slashing in price and rushing sales, but many small sellers have to go to the stage of half-price clearance in order to survive. It is undeniable that low-priced products have great advantages, but this advantage is not absolute, and the consequence of low-price liquidation is the loss of profits.
The sluggish overseas demand, the front and back attacks of competitors, and the continuous logistics costs, sales commissions and advertising costs have made it difficult for many sellers, and there is little profit left throughout the year.
In such a harsh ecological environment, sellers can not change the status quo, only adapt themselves, as the so-called "natural selection, survival of the fittest", this wise saying is not only applicable to nature, but also applicable to Amazon sellers.
Don't blindly open products and optimize your product portfolio. If you want to permanently consolidate your fortress in the cross-border e-commerce track, the product will always be the core, and a good product can reduce a lot of unnecessary troubles for sellers. Of course, in 2024, when the general environment is not clear, sellers should not blindly open products, set product research and development on products with profit guarantee and added value, and can also focus on the layout of categories with reduced commissions.
Maintain reasonable inventory levels and flexibly adjust logistics strategies. Amazon's new low-volume inventory fee is undoubtedly studying the seller's inventory management ability, and controlling it well can naturally reduce a lot of expenses. Dynamically adjust inventory based on sales volume to avoid additional costs, while reducing logistics costs with the flexibility of inbound configuration service fees.
Operate flexibly and take advantage of existing new policies. Familiarity with ever-changing platform policies and flexibility to adapt to changes is one of the essential skills for operations. Amazon's new warehousing discount program and Vine program can also be actively participated in in combination with the actual situation to improve brand ** and product evaluation.
Policies are constantly changing, and sellers must be flexible if they want to survive.