Amazon's new policy takes effect! The countdown to shipping fee increases begins

Two weeks ago, Amazon issued a notice that the Small and Light Program will stop accepting new product registrations after July 17, and will close the Small and Light Program in the United States on August 29. At that time, Amazon's logistics rates for low-priced products will take effect and replace the Small and Light Program. Starting today, the Small and Light Program will stop new product registrations, and low-priced products will enter the countdown to a general increase in shipping costs.

The rate adjustment affects multiple categories such as clothing and accessories. In order to reduce shipping costs, sellers are busy optimizing packaging. If the costs cannot be covered, some sellers will be forced to abandon their original small and light goods, or even stop developing low-priced products. "We will never touch it, or we will be 'killed' by Temu," said a seller.

Countdown to freight rate increase! A group of sellers are abandoning small and light goods

Starting August 29, Amazon will shut down the Small and Light Program in the United States and replace it with a new low-cost logistics rate. This change caused an uproar among sellers. With the Small and Light Program no longer accepting registrations, sellers are one step closer to shipping price increases.

According to Amazon, the logistics fee for products that are currently priced below $10 and are not registered for the Small and Light Program will be $0.77 lower on average after the change. But this is a trick. The actual situation is that most products in this price range have participated in the Small and Light Program. After the change, sellers will have to pay $0.3 or even more for each product. In addition, the unit price of products that can enjoy the low-cost logistics standard has dropped from $12 to $10.

(New logistics rate)

A seller did some calculations: For links under $10, based on the commonly used large standard sizes of 0-16 ounces: for links not exceeding 4 ounces, the rate is 2.66 for light and small, and the new low rate is 3.09, an increase of 0.43; for links of 4-8 ounces, the rate is 2.77 for light and small, and the new rate is 3.31, an increase of 0.54; for links of 8-12 ounces, the rate is 2.94 for light and small, and the new rate is 3.47, an increase of 0.53; for links of 12-16 ounces, the rate is 3.77 for light and small, and the new rate is 3.98, an increase of 0.22. For links of the same size and weight range of $10-12 , the increase is as high as $0.98 to $1.31, which is also the product area most affected by this change.

The industry concluded that after the change, except for small commodities in a few ranges, the delivery fee will increase across the board. Many sellers sell their products for 11.99, and Amazon wants to reduce the price of those products that sell for 11.99 and increase the price of those that sell for 9.99.

Now, sellers of small and light commodities are busy looking for the best solution to deal with the new policy.

Seller @跨跨老张 said that the delivery fees for small and light commodities will generally increase at the end of August, and the company's small and light commodities priced below $10 will also be affected. " There is no better solution at the moment, and some products are changing their packaging. Some product sizes cannot be made, so we may have to increase prices or give up, " he said, "We still have to consider the profit issue."

He introduced that Amazon's freight adjustment this time affects multiple categories, such as accessories, clothing, and beauty products, which already have many small and light commodities and will be affected this time.

It is understood that the beauty and personal care, and maternal and child categories charge an 8% sales commission rate for products with a total selling price of no more than $10, and a 15% commission rate for products with a selling price of more than $10. Some sellers combined this with Amazon's new logistics rates and believed that the beauty and personal care and maternal and child products in the price range of $10-13 on Amazon.com will almost disappear, and those in the price range of $13-15 are also thinking hard about how to optimize the cost to $9.9. " But we are different. We directly gave up the establishment of new products in the price range below $20 from the product development end. " said the seller.

Regarding how small and light commodity sellers will respond, a senior seller said bluntly: " Those who are incompetent should leave immediately. I suggest they stop doing this. We will never touch them, as we will be 'beaten to death' by Temu. Those who can stay are experts. "

It is conceivable that after the new logistics rates for low-priced goods are implemented at the end of August, some sellers will exit the small and light categories due to their inability to cover costs, and the degree of involution among the remaining sellers will rapidly escalate.

This move by Amazon has disrupted the product planning of many sellers, especially for those who specialize in small and light businesses. It can be said that it is a huge blow:

"I was planning to make a small and light product this year, but it seems there is no hope."

"After raising the price to 11.99 to join the Light Small Program, it's now going to drop back to 9.99, and the delivery fee is even higher. "

"We just tried to make it smaller this year, and the 11.99 price hasn't been on the market for a few months, but now we have to go back to the original price. "

“I think a lot of the 10.99 and 11.99 items will be reduced to 9.99.”

One seller complained about the platform's fickleness: " In early January, the price of the Light Small Plan was raised to $12, which seemed to give us more products to sell. But now that the peak season is almost here in the second half of the year, the Light Small Plan has been canceled. So, those who were previously using the Light Small Plan at $12 must lower the price to less than $10 to enjoy the lower rate? "

Delivery fees have risen sharply, and the adjustment of rates is not friendly to sellers participating in the Small and Light Commodity Program. Sellers such as Lao Zhang believe that Amazon's move is mainly to respond to Temu's low unit price strategy.

Amazon's new policy targets Temu, demanding lower prices and faster speeds

Temu has been on the offensive this year , and its ultra-low prices have had a significant impact on the sales of low-priced products on Amazon and other platforms. Therefore, when Amazon announced that it would cancel the small and light plan and replace it with low-priced goods logistics rates, sellers quickly realized that this was Amazon's defense of the low-priced goods market.

Seller @跨跨小汪哥 analyzed that Amazon has two intentions in canceling the Small and Light Plan. The Small and Light Plan is characterized by lower FBA delivery fees, but slower delivery time than regular FBA. Under this delivery time, Amazon is likely to fight with Temu - Temu's delivery time is slow, and the Small and Light Plan is also slow, so Amazon will not be that competitive, and buyers may think "I'll just buy from Temu."

“ First of all, Amazon canceled the Small and Light Plan in order to speed up delivery and make it consistent with the delivery time of ordinary FBA products, which will highlight its advantage when competing with Temu.

The second point is forced involution. Without the Light Small Business Plan, the original participating sellers’ FBA fees have increased, so do you want to lower or raise prices? This forces sellers to compress their own selling space. If they raise prices, they will not be able to sell. Generally speaking, sellers will not raise prices, so sellers are forced to reduce their profit margins. This not only improves the buyer’s experience, but also fights back against Temu’s fierce attack.”

Generally speaking, the logistics time for products participating in the Small and Light Commodity Program is about 3 days, and Temu's delivery from China takes about 10 days. After Amazon's adjustment, it not only has higher price competitiveness when competing with Temu, but also has upgraded its delivery time to FBA speed, which makes it more likely to win. But the sellers will have to pay for this counterattack.

Now, the Small and Light Commodity Program has stopped new product registrations and will be completely closed on August 29. At that time, all products priced below $10 will automatically participate in the newly launched low-price logistics rates, and sellers will have 40 days to adjust. For the injured low-price sellers, the new low-price rates are not affected by the delivery fees during this year's holiday peak season, which is a small consolation.