I’ll second that, wholeheartedly. 
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Dude I can’t make heads of tails of this - guess this is a wait and see.
What is the effective rate increase if:
Inbound placement fee = + $0.27
Fullfillment fee rate discount = - $0.20
Fullfillment fee discount for packaging = - $.04
Low Inventory Fee = Grab the Lube
Monthly Storage Fee Discount (Offpeak) = - $.09
Apparel = Who cares unless you sell it
Vine = Give people your Schitt away whatever
New to FBA = Launch More Products
Returns Processing Fee = Grab the Lube if your product sucks or a BH actor fuqs with your listing
Looking at the recurring Fees isn’t the effective rate a savings of +$.06 per unit? Using standard size as an example?
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Now that I’ve taken the time to dig into everything, here’s the bottom line:
If you are a successful seller, and can manage your inventory, and Amazon provides you with inbound splits for every shipment, that are actually possible to execute, you will save $ under this new policy.
Everyone else - too bad so sad and watch out. Like I mentioned upthread, Amazon does have a plan to shape Amazon and FBA in a way that is best for Amazon and all these little changes they have made over the last couple years are part of executing on that plan. Big biz looks way into the future. They know what’s wrong with Amazon.
We can all call Amazon dumb, yada yada yada. They aren’t as dumb as they appear.
Before, they wanted as many sellers as they could get, selling as much crap as they could get their hands on.
Now they want a more refined group of sellers, that know what they are doing and are serious about success. This will ultimately increase Amazon’s credibility and profitability and I also think it’s going to weed out some of the sellers from far away places and RA folks.
When I apply all the changes, I see some benefits for us if the stars align like Amazon says they will. I don’t trust Amazon and never will. I’m just doing some analysis and forward thinking on what the top brass is thinking based on what has been presented to us.
I’m not going to pretend like we are God’s gift to the world. I’ve got 26 years of experience but I would be nothing on Amazon without my partners operation. I don’t know how so many people supposedly make millions every year on Amazon.
These changes, and some of the other recent ones tell me one thing - Amazon wants sellers at FBA that know how to plan and know how to sell. They are going to make it a lot more expensive to make a mistake and they will use this to start the natural selection process. Throwing sellers out, to clean up shop, would make them look like the jerks that they already are to the general population. That wouldn’t be good for business. Sellers leaving because they just can’t cut it is way different.
Just my thoughts. The numbers are facts though. They do work if you work with them.
Our 5 year plan doesn’t include Amazon, regardless of how much $ we can make.
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There’s a lot of people who make millions in revenue, with astoundingly low profit.
I was speaking of profit actually. It’s easy to make $1M in sales on Amazon a year.
There’s a lot of people who lie too.
Making a million+ in profit a year isn’t easy.
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And the companies that do make $1M+ in profits on Amazon are only paying their Amazon account manager (the forum user) a tenth of that, maybe. So while they might make the big numbers for the business, and claim the big numbers, that doesn’t mean those are their take-home numbers.
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Yes, more clarification is needed but probably won’t happen until we start getting charged for it…
I’m wondering if this will take into account “in transit” shipments? That’s huge for LCL shipments as it can take 3 weeks just to be delivered to the FC and another 2 weeks to get checked in. If they consider that sellers are trying to keep up by counting “in transit” as part of your inventory, I don’t think it’ll be a huge issue. If not, we are going to by paying fees for the inadequate receiving processes at the FC’s even though we did what we were supposed to do.
YES! This is exactly correct!
Amazon creates “incentives”, as they attempt to drive behavior with their fee structures. Costs are likely impossible for Amazon to actually figure out, so they try to create a fee structure that maximizes their profit per item, based upon multiple assumptions about their operations. The things they ask a seller to do here, “make sense”, but ignore special cases, like handmade and highly seasonal products.
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I stand corrected. Apparently, Amazon will show you the cost options for premium service and regular, split shipping first and allow you to make a choice before proceeding. Here is a link to their policy
https://sellercentral.amazon.com/help/hub/reference/GC3Q44PBK8BXQW3Z
If this actually works like they are saying, I would consider that to be a very nice option giving you more control over your inbound costs. If you are willing to do a little more work splitting out your shipments, you would know before hand what you’re going to get for that extra work.
Good Luck,
TJB
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There’s obviously concern about how the fee structure change will be implemented, but overall it’s pretty fair. Lower volume items or sellers who stock inconsistently do actually cause FBA to spend more money to process their inventory, so passing the cost onto them makes more sense than just a general fulfillment fee hike.
There might be situations that feel unfair, like occasionally not being offered a split and having to pay the full inbound fee, but that doesn’t change the calculus of using FBA overall much. Emotion has no place when making a business decision.
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The Low-inventory-level fee is a big problem. We like to run a lean operation, and rarely send more than 1-1.5 months of inventory for most of our ASINs. Send much higher quantities to avoid those fees and you could be stuck with a lot more stock than you need for multiple reasons: Amazon suddenly hiding the Buy Box, a stupid customer dropping that paperweight they bought from you on their foot and reporting it as unsafe, incorrect Hazmat classification, dramatic drop in sales because of seasonality, etc. etc.
As @ASV_Vites pointed out, we’ll just have to pass these fees on to our customers.
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Yep
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Having 3 months of inventory at FBA (which seems to be what they want) is absolutely a big risk. More so because FBA has a habit of seizing/destroying inventory when something goes wrong
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I think we all know that listings getting yanked are nothing like they used to be and I see your point as much less of a concern than it used to be based on experience, and having every one of our listings yanked more than once over the years and then getting restored.
I think someone at Amazon took a look at those numbers and said why are we yanking listings / sales when the ultimate outcome is reactivation anyway, 95% of the time or more.
Remember, there are no more immediate yanks. If you work with Amazon, Amazon will work with you to figure it out while the listing stays up. There are extreme cases (and rightfully so), where Amazon will yank a listing without warning / chance to fix it but those are the exception now, not the rule.
I don’t care for Amazon but this is an improvement and has been in place for a year now or more, reducing the risks you have here.
This is true, they’ve gotten better about yanking listings/suspending seller accounts.
There’s still the occasional unresolvable issue but for the most part the problem is more easily resolved nowadays
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And Amazon will make up for those reduced fees by increasing them elsewhere…
Shein… My daughter has crap coming from them all the time. That clothing is basically disposable. Looks / fits nice until you wash it for the first time.
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Which is perfect for women’s clothing. A lot of times it gets worn once and stashed in a closet forever. Might as well just toss it.