Amazon updates multiple fees, effective as early as next month

It is less than a month away from the arrival of 2025. At the end of the year, Amazon announced the details of many fee adjustments for the new year. In general, the fees have increased and decreased, but the items with price cuts account for the majority. This phenomenon can't help but make people wonder whether the pressure from the Chinese platform is too great, and Amazon is trying to retain sellers with preferential policies?

Amazon will update five fees

Recently, Amazon announced that it will update five fees in 2025, including "Buy with Prime", "Multi-Channel Fulfillment (MCF)", "Amazon Warehousing and Delivery (AWD)", and Amazon Managed Service Supply Chain Fees. The following are the details of the fees:

1. The new AWD smart storage option will provide sellers with a 10% discount on AWD storage fees if they maintain sufficient inventory levels . This discount reduces the fee to $0.43 per cubic foot per month. At the same time, Amazon will also divide the AWD processing fee into inbound processing fees and outbound processing fees, instead of charging both fees together as is currently the case. These changes will take effect on April 1, 2025.

Second, the MCD outbound shipping fee will change from a fixed fee to a distance-based fee. This will reduce the fee for shorter distances and increase the fee for longer distances. Inventory replenished to Amazon is not affected by this change and will continue to be charged a fixed shipping fee that is not calculated by distance. These changes will take effect on April 1, 2025.

3. Sellers who choose Amazon's supply chain hosting service will receive new discounts, including a 20% discount on AWD storage fees and a 10% discount on AWD to FBA shipping fees. These changes will take effect on April 1, 2025. Note: Amazon's supply chain hosting service is a fully managed end-to-end supply chain solution that coordinates logistics to speed up delivery and increase sales conversion rates while reducing complexity. Sellers only need to provide product details and pickup locations, and Amazon will oversee the rest, including carrier pickup, inventory consolidation, strategic replenishment, and delivery to the operations center closest to the buyer.

4. Multi-Channel Fulfillment ( MCF) fees will increase by an average of 3.5%. For goods weighing less than 1 pound, the fees for standard delivery speed will remain unchanged. For goods weighing more than 1 pound, the fee increase will vary depending on the size and weight of the product. These changes will take effect on January 15, 2025 .

5. For "Buy with Prime" orders, Prime service fees will not increase, but the delivery fees for certain large standard-sized items will be reduced. Amazon will continue to provide 1- to 2-day delivery services, and the rates are comparable to the 3- to 5-day standard delivery rates offered by other carriers. These changes will take effect on January 15, 2025.

Chinese platforms are closing in, and Amazon is getting more and more anxious

Judging from the above-mentioned fee changes, three items have seen fee reductions. In the past, Amazon's fees have been rising year after year, and fee reductions are extremely rare. However, since the reduction of clothing commissions in early 2024, subsequent favorable policies have been introduced one after another.

The root cause behind Amazon's series of actions is not difficult to discern: the pressure from Chinese e-commerce platforms is increasing, and preferential policies are needed to retain sellers in order to consolidate its market position.

In the past two years, Chinese cross-border e-commerce platforms represented by the "Four Little Dragons" (Temu, SHEIN, AliExpress and TikTok Shop) have risen rapidly overseas. They have quickly swallowed up a large market share with their cost-effective products, diversified marketing methods and keen grasp of emerging consumer trends.

Taking Temu as an example, SensorTower's data analysis found that in August, the number of users of Temu's application (APP) ranked third among major e-commerce platforms, reaching 91% of Amazon's user base, and is expected to surpass Amazon, which was founded 30 years ago, within the year.

At the same time, according to US media The Information, two people familiar with the matter revealed that Temu has signed contracts with more than 60% of Chinese Amazon sellers, covering categories such as bedding and vacuum cleaners.

This undoubtedly brings a huge challenge to Amazon, which has long dominated the overseas e-commerce market. In fact, as early as the end of last year, Amazon CEO Andy Jassy admitted when talking about the competitive situation between Amazon and Chinese e-commerce that after years of conquering the overseas market, Chinese cross-border e-commerce has become a force that cannot be ignored.

The just-concluded Black Friday and Cyber ​​Monday have made people deeply feel the strong "impact" from Chinese e-commerce platforms. In the past peak seasons, Amazon dominated among many e-commerce platforms, and the sellers' orders always increased significantly. However, this year many sellers said: "I didn't feel anything, and the increase in orders was limited."

But overall, consumer demand has not declined. A large part of the reason why Amazon sellers feel this way is that the traffic is divided up by Chinese platforms.

Earlier, business software company Salesforce predicted that during this year's holiday shopping season from November 1 to December 31, one in five (21%) purchases will be made on Chinese shopping apps such as Temu, SHEIN, AliExpress and TikTok.

Salesforce analysts estimate that these platforms are expected to generate approximately $160 billion in sales in overseas markets outside of China, most of which will go to Temu and SHEIN.

Chinese sellers go overseas, not just Amazon

The rapid rise of China's cross-border e-commerce platforms has shocked many people: "I never thought that China's cross-border e-commerce would develop so fast and could already compete with the giants in the international market."

Driven by the current wave of going overseas, the market-sensitive top sellers quickly and accurately anchored a new direction forward. Not long ago, the semi-annual report released by Savi Times clearly revealed that during the first half of 2024, the company significantly increased its resource investment and strategic layout for emerging platforms such as Temu and TikTok.

At present, Temu and TikTok have successfully entered the top four core platforms that Savitech focuses on planning and building. According to the financial report, in the first six months of this year, these two platforms generated more than 84 million yuan in sales.

According to the "China Cross-border E-commerce Development Report ( 2024)", China's cross-border e-commerce has extended its reach to more than 220 countries and regions around the world, making it one of the countries with the most complete cross-border e-commerce ecosystem in the world.

Compared with Amazon, Chinese cross-border e-commerce platforms are obviously more compatible with Chinese sellers. From a cultural perspective, the two share the same language and cultural background, which greatly reduces communication costs, eliminates the understanding barriers and communication barriers that may arise due to cultural differences, and makes information transmission smoother and more efficient. From a geographical location perspective, the geographical proximity of the two sides provides great convenience for communication and interaction between them.

In the future overseas expansion, sellers may wish to boldly try these emerging cross-border e-commerce platforms. This will not only avoid repeating the mistakes of Amazon's "account suspension wave", but also open up new growth paths.