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{"id":2211,"date":"2022-04-17T15:57:17","date_gmt":"2022-04-17T14:57:17","guid":{"rendered":"https:\/\/www.ecommerceaggregators.com\/?p=2211"},"modified":"2022-04-22T11:00:37","modified_gmt":"2022-04-22T10:00:37","slug":"amazon-usa-hikes-fba-fees-sellers-not-happy","status":"publish","type":"post","link":"https:\/\/www.ecommerceaggregators.com\/amazon-usa-hikes-fba-fees-sellers-not-happy\/","title":{"rendered":"Amazon USA Hikes FBA Fees (And Sellers Are Not Happy)"},"content":{"rendered":"

It’s getting a little heated in the Amazon FBA Seller Forums<\/a> this morning.<\/p>\n

In fact, a quick glance at the US Announcements section makes for a rather unpleasant reading.<\/p>\n

Bottom line:<\/p>\n

Starting April 28th, Amazon will add a five per cent ‘fuel and inflation surcharge’ to its existing FBA (per unit) fees, and it’s safe to say that sellers are not<\/em> happy.<\/p>\n

Why?<\/p>\n

Several objections have been raised. Let’s take a closer look at each one.<\/p>\n

Lack of notice<\/h4>\n

First up, is the notice period, or lack of it.<\/p>\n

In total, sellers have just fifteen days from the initial announcement to the implementation of the surcharge.<\/p>\n

This, in the words of one seller, is simply “not enough time” to adequately prepare for the rising costs.<\/p>\n

Certain ASINs, for example, will no longer turn a profit. If these have recently been sent into FBA, you’re in dire straits.<\/p>\n

This leads us to the second objection.<\/p>\n

Amazon’s record earnings<\/h4>\n

Numerous sellers have commented that Amazon (and other US blue-chip companies) use global inflation to\u00a0justify price increases, yet continue to deliver record earnings.<\/p>\n

This, indeed, is a bitter pill to swallow.<\/p>\n

Particularly given that cost prices are not, in theory, ever going to drop. A surcharge, in some sellers’ eyes, is nothing more than a stealth price increase that directly adds to Amazon’s bottom line.<\/p>\n

Unable to increase retail prices<\/h4>\n

This is a long-term bugbear of many sellers.<\/p>\n

Here’s the deal:<\/p>\n

Amazon uses an automatic ‘Pricing Error’ algorithm that essentially prevents sellers from raising their retail prices beyond a certain limit.<\/p>\n

How?<\/p>\n

By either temporarily delisting the ASIN until the ‘error’ has been fixed or by removing the buy box entirely.<\/p>\n

Upon receiving said notification, a seller has no option but to reduce the price back down to below the minimum threshold.<\/p>\n

Very frustrating.<\/p>\n

And as discussed above, if costs continue to increase, this pricing threshold could well mean that the numbers no longer stack up.<\/p>\n

Or to put that another way, you lose money.<\/p>\n

Summary<\/h4>\n

Regardless of what you think of Amazon, it is still an incredibly lucrative channel for your private label brand<\/a>.<\/p>\n

The way I look at it is simple:<\/p>\n

Inflation is here, period.<\/p>\n

In fact, it was here 12 or even 18 months ago, and all sellers are in the same boat<\/a>.<\/p>\n

Yes, a 5% increase in FBA fees is unwelcome. But if you’re running a tight ship, financially, this can easily be absorbed into your P&L without too much pain.<\/p>\n

Remember, Amazon aggregators<\/a> will only look at businesses with a profit margin of 20%+.<\/p>\n

Some aggregators even insist on a minimum of 30%<\/a>.<\/p>\n

In short:<\/p>\n

If an ASIN is no longer wiping its face, post-April 28th, perhaps it’s time to take a good long look at your brand and decided if a purge of products is required.<\/p>\n

Amazon FBA may be more expensive than it was last year, but it’s still infinitely cheaper than Shopify with FBM.<\/p>\n

And that, my friend, is a fact.<\/p>\n


\n

Further reading:<\/h3>\n

This website was created by ex-Amazon sellers, Martin Smith and Richard Turnbull.<\/p>\n

To learn about our story, our private label FBA brands, and our first-hand experience selling to Amazon aggregators, click here<\/a>.<\/p>\n

You may also wish to check out our 2022 Definitive Guide to Amazon Aggregators<\/a>.<\/p>\n

Written for FBA sellers, this simple, easy to follow document takes less than 5 minutes to read and represents the culmination of over 100 hours of research into the Amazon aggregator space. To access the guide today,\u00a0click this link<\/a>.<\/p>\n\n

\n\n\t\t\n