Amazon is trying out a "new policy" to reduce sellers' costs!

In recent years, Amazon has been making adjustments to FBA fees, which has led to a rise in sellers’ logistics costs. Many sellers are complaining about this. Perhaps to alleviate this situation, there have been recent media reports that Amazon has launched two FBA pilot programs in the US to reduce sellers’ logistics costs.

Amazon invites some sellers to participate in pilot program

It is reported that these two pilot programs are invitation-based and are named Athena and Apollo. Sellers will be considered to have successfully participated only after receiving an invitation email from Amazon and performing corresponding operations.

Sellers who are invited to participate in the Athena pilot program and agree to it can be exempted from the low inventory level fee between September 9, 2024 and November 15, 2024. Of course, there are certain conditions.

According to the information currently circulating, the Athena pilot program requires that for products that are subject to low inventory level fees, Amazon will change its delivery strategy and prohibit them from delivering products outside the (inventory) area, thereby reducing the demand for costly long-distance delivery and exempting sellers from low inventory level fees for these orders ; when product replenishment returns to normal, the platform will cancel the product's out-of-region delivery restrictions.

All products that successfully participate in the pilot program can enjoy this policy; sellers who receive invitation emails can choose the products they want to test based on the eligible list provided by the platform. Amazon said that this ( Athena pilot program) will help sellers save costs. During the pilot program, Amazon will share a report on regional sales data and recommended data with sellers every week so that sellers can observe the impact of the program on their sales.

The Apollo pilot program is mainly aimed at sellers selling low-priced goods, providing FBA fee discounts for goods priced below $25. It is reported that sellers who receive invitations and agree to participate in the pilot program will only use available inventory in the same region to deliver orders to buyers between September 15, 2024 and November 15, 2024 .

This means that the inventory of products in a certain region where sellers participate in the pilot program will only be available to buyers in that region. For example, buyers in New York will not be able to purchase products stored in a fulfillment center in California.

Amazon said that the Apollo pilot program aims to explore various opportunities to reduce costly long-distance transportation to help sellers reduce costs and increase sales profits for low-price sellers. For products participating in the program, sellers still need to choose according to the list provided by Amazon; all products participating in the program will receive a delivery fee discount.

Sellers can view the specific discounts on delivery fees in Amazon's invitation email; at the same time, during the pilot period, sellers will share the regional sales, page views and net delivery fee discounts of the products participating in the pilot program every week.

It is worth noting that both pilot programs mention that no matter which warehousing configuration service fee is chosen, the inventory sent by sellers to Amazon will still be expanded in the distribution network in 9 regions in the United States; except for the low inventory level fee ( Athena program ) and delivery fee ( Apollo pilot program ), other fees will be charged normally (if any); at the same time, if the seller has no remaining inventory in the area, it will not be able to sell in that area.

Amazon specifically mentioned in the supplementary terms that these programs are only applicable to sellers who receive direct email invitations from Amazon; at the same time, the discount amounts, fee exemptions or other benefits (incentives) related to the pilot program are only applicable to the mall and selected products specified in the "invitation". If sellers want to receive incentives (participate in the pilot program), they must complete all the steps mentioned in the "invitation" within the time specified by the platform.

From the two plans, we can see that Amazon is trying to focus on "regional" delivery and reduce long-distance delivery, hoping to reduce the logistics costs of both the platform and sellers. However, due to the "region" restrictions, the service objects of sellers will be relatively reduced, so whether the policy will have a positive impact on most sellers remains to be seen. Amazon will control the trial in a small area, which should also be due to the same considerations.

Some European sites reduce FBA fees for large items

If the FBA "reduction" plan in the United States is a trial, then in the UK and some European sites, Amazon has already begun to reduce FBA fees for small-sized oversized items. According to Amazon's definition, FBA's small-sized oversized items refer to items that are larger and heavier than standard e-commerce items, but still relatively compact.

According to a notice released by Amazon, as part of improving FBA services, starting from September 16, 2024, the platform will reduce domestic and pan-EU FBA fulfillment rates for small and large items in the UK, Germany, France, Italy and Spain , with fees reduced by up to £1.60/€1.87. Amazon said that this move can increase the diversity of sellers' product supply and help sellers include more heavier and smaller products.

Specifically, in the UK, France, Italy and Spain, the FBA fulfillment fees for four specifications of small-sized oversized products (product size ≤61 x 46 x 46 cm and weight not exceeding 1.76 kg) are reduced by 12-30%; in the German site, two specifications of small-sized oversized products (applicable to volume ≤61 x 46 x 46 cm and not exceeding 1.26 kg) can enjoy a discount of 22-28%.

(Photo source: Amazon)

For example, in the UK, the charges for goods weighing ≤760g and ≤1.26kg are 1.6 pounds less than before, and the charges for goods weighing ≤1.76kg are reduced by 1.59 pounds; in France, the logistics costs for goods weighing ≤760g are reduced by 1.87 euros, the costs for goods weighing ≤1.26kg are reduced by 1.17 euros, and the costs for goods weighing ≤1.76kg are reduced by 1.77 euros. The costs of other sites have also been reduced by 0.94 euros to 1.87 euros.

It is worth mentioning that Amazon also announced last month that it would reduce the pan-EU FBA super surcharge rate for sites in France, Italy and Spain starting this month, with a reduction of 30-50%.

For sellers who sell oversized items, these policies are undoubtedly good news: on the one hand, they can save operating costs to a certain extent, and on the other hand, they can increase certain profit margins. In addition, as Amazon mentioned, "now is the best time to optimize inventory and provide more value to buyers."

At the same time, Amazon recently announced the cancellation of FBA excess storage fees in the United States, Europe, and Canada. This means that sellers no longer need to pay additional fees because their inventory exceeds the prescribed limit. This move also effectively helps sellers reduce operating costs.

Judging from the above-mentioned "burden-reducing" actions, Amazon is not indifferent to the sellers' "complaints" about "FBA fees". After all, facing challenges such as "intensified competition", "reduced orders" and "increased costs", many sellers have chosen to deploy on multiple platforms at the same time in order to spread risks. If Amazon wants to win back the "hearts" of sellers, it naturally needs to make adjustments and changes to the "pain points" of sellers, so that it can continue to occupy an advantageous position in the competition with other e-commerce platforms.

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