New rules: Amazon is charging again, and sellers’ costs are soaring again!

Advertising management fees are here!

The cross-border e-commerce market this year is too magical. Fines , account suspensions , tax inspections , tax reforms, etc. have tortured sellers one after another . The old logistics problems such as price increases, warehouse explosions , container shortages , congestion, etc. have also made a large number of sellers miserable . Now a new round of freight price increases is about to come, and the advertising costs of Amazon sellers may also increase significantly. The sellers' operating costs will soar again, and their profits will shrink significantly.

Even though sellers’ advertising costs have soared, a large number of sellers on European and American sites have recently reported a sharp decline in orders.

What is the reason behind the decline in orders? US inflation is an important reason.

Attention: Amazon will charge advertising management fees

Recently, many sellers reported that they received the latest "collect money" email notification from Amazon ↓↓↓

From the content of the email, it can be seen that new advertising management fees may be added to the bill of the seller's Amazon advertising account from September 1, 2021. Advertising management fees may be included in the bill when advertising in certain countries or regions , or when advertisers purchase advertising in certain countries or regions.

This advertising fee is calculated based on the ads placed in a specific country /region or the ads purchased by the advertiser from a specific country/region during the billing cycle. It is understood that sellers can view their advertising management fees in the bill (PDF) and the web version of the bill (which can be found on the "Bill" page). The countries where charges are charged include: France, Italy, Spain, the United Kingdom, Austria and Turkey. The specific DST rates are as follows:

United Kingdom 2%

Italy 3%

France 3%

Spain 3%

Austria 5%

Turkey 7.5%

For advertisers with a business address in the UK or Turkey, the regulatory advertising fee calculated from the total invoice amount will be charged in addition to the regulatory advertising fee for ads served in countries where DST applies . For example, if you are an advertiser in the UK and a customer in Austria (a country where DST applies) clicks on your ad, you will be charged the regulatory advertising fee for both the UK and Austria.

After the advertising management fee was announced, a large number of Amazon sellers questioned the new policy:

A: Amazon only knows how to ask sellers for money every day. The old buffalo in the field cannot be exploited in this way.

B: I'm speechless. The costs are going to increase again. I've already suffered huge losses in the first half of the year and am now barely maintaining the business, waiting to make a profit in the second half of the year. But now my scalp tingles when I see Amazon's new policy and I'm no longer in the mood to make money.

C: Our brothers and sisters on the European site are really miserable. There is already a serious internal competition, and the prices of products are lower and lower. Even after the European site started to collect full taxes, the prices have not increased. Now Amazon is going to charge an additional 3% advertising fee. The sellers, who already have little profit, have been dubbed Amazon's philanthropists.

The editor summarized the sellers' feedback and found that many sellers said that after the advertising management fees came out, the operating costs would increase again. This is undoubtedly adding salt to the wound, and it will become even more difficult for families that are not wealthy to begin with.

It is worth noting that although only sellers on the European site have received emails about advertising management fees at present, based on past experience, it has been Amazon’s practice over the years to trial a new policy on a single site and then promote it on the entire site, so it is likely that other sites such as the US site will also charge advertising management fees in the future.

Seller orders fell sharply, and inflation in the United States was severe

Recently, the advertising costs of a large number of sellers have soared. Although sellers have reported that the returns on Amazon advertising are getting higher and higher, the conversion rate has not increased at the same time. Instead, the number of orders has dropped, and sales have been getting worse day by day.

An Amazon operator in Europe said that although there is no change in the product rankings at present, the number of orders has been hovering at a low level since July. Compared with the usual level, the number of orders has dropped by more than half. After the goods are unsold, he is now very worried that he will lose his job.

Another seller on the European site also said that advertising has no effect at all, and the UK site has not seen an increase in orders for half a year since the decline. In addition, the European tax reform has also dealt a heavy blow to the order volume, and the sales volume on the German site is declining at a visible rate.

In fact, in addition to the sellers on European sites, a large number of sellers on American sites are also suffering from a decline in orders.

A: The traffic is really bad, the advertising costs are skyrocketing every day, and there are not many orders after clicking.

B: I used to think that the few orders last week were the lowest sales volume in history, but after looking at today's orders, I realized that I was wrong. The saying "there is no worst, only worse" applies to me.

C: The orders have been very stable. There are so many sports stars, but only Lin Dan and I are good friends...

The decline in seller orders is not an isolated case, reflecting the decline in consumers' desire to shop.

Data shows that in June, U.S. prices continued to rise, and the impact of soaring prices on American society is further exacerbated. According to foreign media reports, inflation has brought great pressure to the lives of middle- and low-income families, while for high-income families, inflation has led to a large number of discretionary purchases being postponed.

In other words, inflation is affecting the lives of the American people in all aspects.

Data from the U.S. Department of Labor showed that the U.S. CPI index continued to soar in June, with a year-on-year increase of 5.4%, a record high since the 2008 financial crisis. The core CPI increased by 4.5% year-on-year, the highest since November 1991. Data released on the 14th showed that the U.S. producer price index (PPI) in June increased by 7.3% year-on-year, which also greatly exceeded market expectations and hit a record high since 1982.

The report pointed out that the supply chain has not yet fully recovered, coupled with the rapid increase in market demand, which has exacerbated inflation pressure in the United States in June .

In fact, in addition to the decline in US consumer confidence, US inflation continues to soar, and the US epidemic has made a comeback.

According to news reports, the COVID-19 epidemic has rebounded rapidly in many parts of the United States recently, and many regions have announced the resumption of epidemic prevention measures such as wearing masks in indoor places.

Health officials in Los Angeles County, California , said at a press conference on the 15th that more than 1,000 confirmed cases of COVID-19 were reported in the area every day. Los Angeles County will resume mandatory wearing of masks in public indoor places, and the restrictions will take effect before midnight local time on the 17th. San Francisco and seven other regions in California urged local residents to wear masks in indoor public places on the 16th. Several areas in Nevada, including Las Vegas, also recommend that tourists and local residents wear masks in indoor public places.

It is understood that the more contagious Delta variant virus is spreading rapidly in the United States, and there has been a rebound in new COVID-19 cases in many places across the country. At the same time, the vaccination rate in the United States is still lagging behind expectations ... In order to prevent this wave of epidemic from worsening and lasting longer, the majority of cross-border sellers have to make preparations for stocking in advance and think about countermeasures to avoid having their sales rhythm disrupted by the epidemic.

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