Small and light is no more. Replaced with Low Priced FBA

On the surface this news seems positive.

Hello,
For a number of years, the Fulfillment by Amazon (FBA) Small and Light program has provided sellers with an option to enroll low-price, small, and light products into this program to receive lower FBA rates because the program provided slower shipping speeds than standard FBA. We have learned a great deal over the last few years, including how these lower fees have helped enable sellers to offer far more low-price selection to customers and how much customers value the continued improvements we have made in speed. As a result, we have decided to end the US FBA Small and Light program and instead lower the standard FBA rates for all low-price products.

Starting August 29, 2023, US FBA will introduce these lower FBA rates for all items priced below $10. The new rates make it simpler for every seller to take advantage of lower fees on their low-priced selection, while providing the same, fast FBA delivery speeds that customers love. Any eligible items will automatically receive the low-price rates and will not be subject to 2023 holiday peak fulfillment fees that will apply from October 15, 2023, through January 14, 2024.

With this change, we will close the Small and Light program in the US effective August 29, when the new low-price FBA rates go into effect. Until then, items enrolled in Small and Light will continue to have Small and Light rates applied. Enrollment of new products into the program will end after July 17.

The new FBA rates for low-price products will be an average of $0.77 lower per item than the current FBA rates for these products. If your products were enrolled in Small and Light and are priced below $10, this change will mean that you will pay about $0.30 more per item than with Small and Light, but your items will now ship with the faster FBA fulfillment speeds. If your products were not enrolled in Small and Light and are priced below $10, this change will mean that you will pay about $0.77 less per item while continuing to enjoy the fast FBA fulfillment speeds you have been receiving. For items priced above $10, they will automatically have the standard FBA rates and shipping speeds applied.

We understand that changes to programs and fees can affect your business. To help prepare for this change, you’ll have approximately two months until the new lower FBA rates for low-price products take effect and the Small and Light program closes. We recommend that you review your product offerings, check your inventory status, and review the FBA rates to assess any changes.

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I honestly appreciate this kind of transparent concrete info from Amazon. $0.30/item is a lot, if your items tended to arrive in about the same time frame as nonSNL, but if you usually see a delay, it’s probably worth it…but wise Sellers will just start incrementally raising prices now, to be $0.30 more by August but not to exceed $9.99, obvi).

Bargain.

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This is a straightforward, well spelled out email, and the decision is correct.

This had to come from an outside consultant, it’s too smart for Amazon.

I think this is a good move!

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Or an employee about to be fired for unacceptable displays of competence in the workplace.

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Ohhhhh, I like this line, Bookmarked!

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We did small and light years ago with Amazon. The delay on shipping, forget about the transportation time. Just getting the item out the door took them days.

They appeared to have one center that did S&L, I almost felt like it was a contractor but have no proof.

When SFP S&L came out we did that. We were shipping faster and arriving in 3 days. We dumped Amazon S&L.

Then they dumped SFP S&L, so be it. Have not done it since.

We were just creating some products, that would fit, and were going to start up again. Thanks for the G2 @ASV_Vites this should work for us.

Plus, since it is normal FBA, I expect now we will get the prime badge. That was not available with the old S&L. Plus, items will be distributed throughout the country, giving us the opportunity for 1 day shipping.

For 30 cents more per item, prime badge and real FBA service, works for me. Plus we save 77 cents on what is real FBA now. We just sent a test flight up with 12 units and three variations to see how it works. This as real FBA, to get started. Our margins support it and we want to compare to FBM (using no tracking) to see if we get a lift and the final costs.

We can pay the extra until August 29th, but can plan for the reduced rate.

So in an unusual move, Amazon did something good for us. And they communicated it well.

Fact is sometimes stranger than fiction.

There’s gotta be a catch right??? lol

It tells you how bad Amazon is to work with when something like this provides such joy / hope / promise…

Not sure if you ever used MCF but that service used to be dirt cheap. It’s barely cheaper than doing it yourself now and sometimes more.

So let’s take this cheap rate with a grain of salt. It could change

Be Well
Steve

I actually think this sucks, for several reasons:

  1. Products priced between $10-$12 are no longer eligible for the reduced fees. With the increase in the COGS experience across the board in the last couple of years, many of the products that were profitable sold at $10 or less are no longer. In fact, after raising the prices for those products to the $10-$12 price range, margins are still razon-thin in many cases.

  2. No more labeling at $0.10 per unit, which was a great perk of the program.

  3. This is an additional defacto fee increase, in addition to the one from earlier this year.

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…or so we thought:

  1. Sucks big
  2. Huge suck
  3. Ongoing suck

I used Small and Light for a good percent of my line.
In my case my product is 4 oz or less, so it seems at first glance my pick/pack will go down 2 cents.
From $2.47 to $2.45.

But most others in the program surely are going to pay more!! Which means there are MILLIONS of losers !!

Here are the “winners/Losers” who are currently enrolled
Screen Shot 2023-06-29 at 2.08.17 PM

As to the savings of 70 cents for those NOT enrolled, I would imagine that is also an estimate.

Lastly, I just want to point out the pure corporate idiocy of the fees table for the now “Low-Price FBA rates”. Look at it. What in $#%$# do they think? On the fees table they list OVERSIZED catagoires !!!

So for example a SMALL OVERSIZE is rated at $8.96 to pick/pack. Add 15% for a $9.99 priced item and a 1 lb item has fees of $10.46 . Yea, right. Any business man will salivate for those margins

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Also…

YES in the first 5 years of the SNL program, the delivery times were slower, and the Prime Badge was not there. But since 18 months ago, when they jacked up the rate, and increased the disposal rate 1000%, they also gave us PRIME and treated SL as FBA in regards to shipping times.

So in effect, this announcement does NOT give the benefits they are touting, as they already have “given” SNL these benefits. Slight of hand, and BS as usual.

And as @Gandalf said, those currently in SNL with items $10 - $12 are royally screwed. Especially since the $10 to $12 increase occurred in Feb of this year. Bait and Switch.

With inflation, labor cost, rents, etc. A product selling Under $10 on Amazon is a rare breed. Really the only businesses that can do it, do VOLUME. It is simply not worth it to make a few bucks per sale.

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Funny, I was thinking about just this ($10-$12) while I was just washing my car…

We only have one listing that would qualify for new or old ($9.99) so it does benefit us a little but does apparently screw a lot more than it helps.

Seems to help Amazon. What a surprise.

What we need to look at is the CoGS and packaging costs, then the maximum sell price. For us it would be $9.95, possibly lower.

We just analyzed an item today. The CoGS was 40 cents, the packaging and tradedress was 25 cents. A total of 65 cents.

From this we will find our sales fee and FBA fee. We look for 3x to 7x our total CoGS and packaging for our list price.

If we shipped this FBM without tracking as allowed that would be $1.18 added up a total of $1.83 for CoGS, TradeDress, envelope and USPS postage. That is over 5X nearly 5.5K our CoGS and Packaging.

Next step sharp pencil find out the Amazon Fee for closing, and the FBA costs to see if we can go that direction.

Now we have to add into that, or rather subtract from it INR refunds, and returns for any reason a Amazon customer can think of.

As always, it is about the margin, not the sell price. I think not one new seller on the NSFE, understands that issue. “I made $10K in my first month!” No you sold $10K now we need to know what your expenses are. All in, from CoGS to Fees, to Packaging to Shipping to Overhead, etc…

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I haven’t sat down to do the math, but I am glad for the headache of having to switch back and forth between S&L and normal is now something that saves me time and time is money.

I dropped the prices of a lot of my inventory if it’s been in the warehouse over x amount of time. Then I would have to go and add those all to S&L, but then if the item sold out and I relisted it back at the normal price then I need to remove the S&L option because the normal price is $15

So at least for me that headache is gone. I can just drop and raise prices as needed.

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I agree… 22% of our small and light products will lose their lower rates because they are between $10-$12.

Also, with this change, the sellers that went through the time and effort to actually list their products in small and light will lose the price advantage over the sellers that chose not to use it, were not aware of the program or couldn’t figure out how to do it.