Does Amazon want sellers to “quickly enter and exit”? This article discusses some thoughts on this policy adjustment from the seller’s perspective.

Preface

Amazon changes its policies several times a year, which shows that times and the market are changing.

Based on the situation this time, I would like to first talk about my thoughts from the seller's perspective.

The background path is as follows:

The main contents of the policy update are as follows:

••   We charge an inbound placement service fee for standard-size and large-size oversized items to reflect our costs of allocating inventory to fulfillment centers closer to customers. The average fee is $0.27 per unit for standard-size items and $1.58 per unit for large-size oversized items.

We will let you choose whether to ship to a single location or multiple locations, and this fee may be reduced or eliminated depending on your choice. These fees will take effect on March 1, 2024, and will be charged 45 days after the items are received. Please refer to the Inbound Placement Service Fees page for more details.

 
Thinking: Warehouse configuration service fee. This is the first time this fee has been mentioned in history. This is Amazon forcing you to ship to some remote warehouses or even to separate warehouses.

Because everyone wants the West Coast warehouse, this has led to a warehouse explosion. If you accept the warehouse recommended by Amazon, there will be a corresponding discount fee. This is also Amazon's intention to ensure that all warehouses can be used evenly and to increase the utilization rate of some remote warehouses.

For sellers, if they still want to send goods to some popular warehouses, they can only pay some fees. If they send goods to warehouses recommended by Amazon, the delivery time may be longer!

••   We are reducing FBA fulfillment fees by an average of $0.20 per unit for standard-size items and $0.61 per unit for large-size oversized items. These fees will begin to apply on April 15, 2024, when the first placement fee is charged. Items priced under $10 will continue to receive an additional $0.77 per unit discount. Please refer to the FBA fulfillment fees page for more details.

 
Thinking: The above charges a storage configuration service fee, but here is a little sweetness for you. This is the first time in history that Amazon's logistics and delivery costs have been reduced.

It can be seen that the reduction of delivery fees and the collection of warehousing configuration fees start at the same time, but please note:

Items priced below $10 can continue to enjoy an additional commission discount of $0.77 per item. I think the market below $10 is worth a closer look.

•• In addition, when products meet the requirements to ship directly in your own packaging, we will reflect the savings by offering a $0.04 to $1.32 discount on shipping fees (depending on the size and weight of the product) through the Ship In Product Packaging (SIPP) program. These discounts will begin on February 5, 2024. Go to the Ship In Product Packaging (SIPP) program page for more details.
 
Think about it: As long as your product packaging can be used for direct delivery, you can offer a $0.04 to $1.32 shipping fee discount.

Here Amazon requires that your packaging cannot be so casual. Basically, it is only possible if the outer box is strong. This depends on the seller’s own packaging!

•• We charge a low inventory fee on standard-sized items. This fee applies if your inventory levels are consistently too low relative to your product sales. This prevents us from spreading your products across our fulfillment network, which can slow down and increase your shipping costs.

Sellers can avoid this fee as long as they maintain more than four weeks of inventory based on product sales. This fee will begin to be charged on April 1, 2024. Please refer to the Low Inventory Fee page for more details.
 
Thinking: Charging low inventory fees for standard-sized items, for the first time in history, yes, that’s right, you sell well, but there is no stock, so I will charge you money

As for the reason, Amazon explained that this would hinder us from distributing goods across the distribution network, which would reduce delivery speed and increase delivery costs.

In fact, to put it bluntly, it's all bullshit. Because you are selling well but there is no stock, Amazon will lose a lot of delivery fees + commissions + advertising fees from you. You are hindering Amazon from making money, which is your fault, and I want you to pay for it!

This may be very unfriendly to seasonal products. You have to pay attention to whether Amazon will mess things up, because the platform doesn’t care whether you are seasonal or not. It only calculates that if you sell well, it will ask you to replenish stock and make some random calculations!

••   To help you maintain adequate inventory levels, we are reducing the off-peak monthly storage fee for standard-sized items (January through September) from an average of $0.87 per cubic foot to an average of $0.78 per cubic foot, a reduction of $0.09 per cubic foot. The monthly storage fee for non-standard-sized items will remain the same. This change will take effect on April 1, 2024. Please refer to the monthly storage fee page for more details.
 
Thinking: Reduce the monthly storage fee for standard-sized products during the off-peak period (January to September). This only applies to standard-sized products, and it is not the peak season.

The average price per cubic foot has dropped by $0.09. Based on the exchange rate of 7, it has dropped by 0.63 yuan. Do you feel that it has dropped but it doesn't seem to have dropped at the same time? This Amazon is really amazing.

•• We are reducing referral fees on apparel items priced under $20. For items priced under $15, the referral fee will be reduced from 17% to 5%. For items 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. These fee reductions will take effect on January 15, 2024.

Thinking: This is the most significant and beneficial policy update today. It directly reduces sales commissions, and the lowest can be 5%.

This is a major benefit for the clothing category. Friends who sell clothing can sell them at low prices. Perhaps this is also a way for Amazon sellers to better compete with TEMU. After all, clothing is a super large category. I wish all my friends who sell clothing have big sales!

•• We are introducing a new pricing structure for Amazon Vine, with lower prices. The program is designed to help brands earn insightful reviews and help customers make informed purchasing decisions. The new fee tier applies to products enrolled in the program on or after October 19, 2023. See the Amazon Vine page for more details.
 
Thinking: This is a policy that was updated before. In short, sellers can get 2 green label reviews for free.

Of course, your product still has to be good, otherwise it will be difficult to deal with bad reviews.

••   We will provide more benefits for the US Amazon Logistics New Product Warehouse Promotion Program. For new parent products that join Amazon Logistics and meet the requirements, we will provide an average rebate of 10%, and now non-branded products can also enjoy this benefit.

Additionally, we will expand eligibility for the program for larger items and begin offering Amazon Vine benefits to eligible sellers and items. These changes will take effect on March 1, 2024. Please refer to the FBA New Product Inclusion Program page for more details.
 
Thinking: The US Amazon Logistics New Product Warehouse Discount Program has existed before, but now non-brand players can also enjoy it, and also provide relevant Amazon Vine benefits

This will allow more sellers to enter the market and get everyone to launch new products. After all, Amazon needs fresh blood.

•• We will introduce new rates and new benefits for Amazon Supply Chain Services.

It is a fully automated supply chain service that provides an end-to-end solution to quickly and reliably deliver your products from manufacturers to buyers around the world.

We are updating fees for Amazon Cross-Border Fulfillment Services, the Partnered Carrier Program, and Amazon Fulfillment and Distribution Services. We are also introducing new discounts for items that are automatically replenished by Amazon. Please refer to the Amazon Supply Chain page for more details.

 
Thinking: Friends who use Amazon's cross-border logistics services can enjoy new rates and new benefits

But basically, few people use Amazon logistics. After all, it is full of scams and people dare not try it. Or maybe Amazon wants to attract more people to use Amazon logistics services. This old man Amazon wants to make more money!
 

Summarize :

Amazon has changed its policies over the past year. In fact, Amazon wants sellers to "quickly enter and exit" and "improve warehouse utilization"

With the rise of other platforms, Amazon will definitely make some adjustments. The platform will definitely favor those fast-moving consumer goods. As a seller, operating multiple stores may share some risks, but you should also pay attention to the success rate of product development.

With the rise of multiple platforms, perhaps everyone has to think about whether you have profitable products and product barriers, so that you can survive on Amazon! Everyone, do you have any different thoughts on the policy update?