The Member Carnival Day in July has just passed and now it is August; just when sellers thought that the Amazon platform was no longer causing trouble and they could get through the peak season relatively easily!

Amazon has come up with a new trick and quietly launched two new charging items - "advertising management fee" and "taxation for European local accounts". Many Amazon sellers have complained about this change and have mixed feelings. 😓

Amazon adds advertising management fees

According to the notice, starting from August 15, 2024, any advertisements placed on the Canadian site will be subject to a 3% advertising management fee.

This move actually caused heated discussions in the industry as early as July 2021, but Amazon did not actually implement it at the time, so the topic gradually faded from view.

However, some sellers recently received an official notification email from Amazon, confirming the official implementation of this charging policy: starting from August 15, 2024, Amazon will charge advertising management fees for advertisements placed on Canadian sites.

It is reported that regional advertising management fee rates vary, ranging from 2% in the UK to 7.5% in Turkey, and these rates may be adjusted according to factors such as seasons and market trends.

It is important to note that the advertising management fee is not calculated based on the site where the ad is placed, but is determined based on the clicks of the buyer's account. This means that even if the seller places an ad on the US site, as long as the ad is clicked by buyers in other countries such as Canada and France, the seller still needs to pay the corresponding advertising management fee. This cross-site billing method also increases the complexity and uncertainty of sellers when placing ads.

It is understood that the advertising management fee is also known as the Regulatory Advertising Fee. According to local Digital Services Taxes (DST) or other regulations, when advertising is placed in certain countries or regions, or when advertisers purchase advertising in certain countries or regions, the Regulatory Advertising Fee may be charged.

Judging from the content of the email, in order to comply with the regulations of these countries, Amazon has transferred this part of the cost to the sellers to ensure the continued operation of the advertising service. For sellers, this is undoubtedly adding to the already tight profit margins.

According to Amazon's official notice, from August 1, 2024, the "I want to open a store", consultation on off-site promotion, celebrity video and other services originally provided by Amazon Services Europe s.àrl (ASE for short), please contact customer service: FLA66668888 Amazon logistics and other services will be fully transferred to Amazon EU s.àr.l. (AEU for short).

This change means that all ASE-related agreements, policies, terms and conditions, including the Amazon Payments Agreement, will be updated to the AEU version.

Specifically, if the seller's company is established in the UK, Germany, France, Italy, Spain, the Netherlands, Poland, Belgium or Sweden, the local AEU branch will issue invoices to the seller from August 1, 2024.

In other words, local VAT rules will apply to fees charged by Amazon, Amazon will deduct VAT when charging the fees, and the cashout amount for sellers will change.

Judging from the content of the policy, this policy has little impact on European sellers with non-local accounts. But for cross-border sellers using European local accounts, the cost seems to have increased again!

However, in fact, some sellers further pointed out that the Amazon charging items in this policy refer to store fees, category commissions, and advertising fees. Unlike the value-added tax for non-European local accounts, this VAT is aimed at these charging items rather than withholding the seller's entire order sales.

According to feedback from sellers on European local accounts, Amazon has started to charge commissions and 20% tax on FBA shipping fees from relevant sellers since August 1, but commissions and taxes on FBM orders have not been collected yet. Therefore, some sellers speculate that this new policy is still in the process of being perfected, but the specific details still need to wait for further actions from Amazon.

In general, there are many promotional activities during the peak season in the second half of the year. Sellers should pay close attention to the latest developments in platform policies to ensure that their business strategies can adapt to these changes in a timely manner. At the same time, they should have an in-depth understanding of policy details and reasonably plan tax strategies to ensure that they maintain their leading position in the fierce market competition.