Another wave! Amazon multi-site new charges

Another wave! Amazon multi-site new charges

In early May, Amazon announced the return rate thresholds and return processing fee standards for various categories on its US site. Returned items exceeding the thresholds face a processing fee of at least approximately US$2 per item. The larger the product, the higher the fee, causing an uproar.

The only thing that the sellers were thankful for at the time was that this fee was only charged on the US site, and other sites did not have to bear it. But the reality is that starting from October 1, Amazon will also charge return processing fees on European sites. Currently, the rates for each site have been announced, but the thresholds for each category have not yet been released.

Many of Amazon's policies are first introduced in the US, and other sites will follow up later. Europe faces return processing fees, and Japan also started charging low inventory level fees this month, and sellers' operating costs for multiple sites are rising at the same time.

New return processing fee added to European site

Amazon's backend information shows that starting from October 1, 2024, a return processing fee will be charged for high-return rate products in all categories except clothing and shoes in Europe. The first charge will be initiated between January 7 and 15, 2025.

The return rate algorithm is the same as that of the US site. For example, for products shipped in October 2024, the return rate is the percentage of returned products during October, November, and December 2024. For products shipped in a given month, Amazon will charge a fee for each returned product that exceeds the product category return rate threshold. For example, for products shipped in October 2024 but returned and charged, the fee will be charged between January 7 and 15, 2025.

For example, if a seller ships 1,000 items in October and 120 items are returned in October, November, and December, the actual return rate is 12%. If the return rate threshold for this category is 10%, the seller will have to pay a processing fee for the 20 returned items that exceed the threshold.

The EU returns processing fee applies to the UK, Germany, France, Italy and Spain. It does not apply to orders shipped in the Netherlands, Sweden, Poland and Belgium.

According to the rate standards given by Amazon, for small envelopes of 80 grams to oversized envelopes of 960 grams, the charges for returned goods exceeding the threshold are £1.71 to £2.34, while the charges at the German, French, Italian and Western stations are between €2.16 and €4.13 ; from small packages to standard packages, small oversized items, standard oversized items, and large oversized items, the charges at the UK station are between £2.35 and £11.43 , while the charges at the German, French, Spanish and Italian stations are between €3.38 and €15.69, and the charges for special oversized items are higher.

( European five-stop return processing fee rate )

For example, a mobile device case measures 20 x 9 x 3.5 cm , weighs 50 grams , belongs to the large envelope segment, and is delivered by FBA in the UK . Starting from October 1, if the product return rate is higher than the threshold, the return processing fee for each product is £2.28.

The return rate threshold for each category will be released on August 1, and sellers with high return rates can pay special attention to it. The threshold standards for the US site can be used as a reference: the thresholds for backpacks, handbags and luggage, small appliances, computers, consumer electronics, glasses, full-size appliances, jewelry, pet supplies, video game consoles, watches, and Amazon device accessories are all higher than 10%; office supplies, toys and games, beauty and personal care, media products, food, art, and all other categories are all lower than 6%, with a lower safety line.

In the apparel and footwear categories , Amazon does not set a return rate threshold and continues to charge a return processing fee for each item returned .

Starting October 1, sellers can view the return rate of their products on the Amazon Logistics Customer Returns Dashboard , which is updated weekly. After Amazon charges, the return fee will be displayed in the seller's fee tools (such as   SKU Economy ) and monthly payment reports .

There is also a certain exemption range for the European return processing fee. If the seller's monthly shipment quantity is less than 25 pieces, then the returns of all products shipped that month are exempted; if the seller registers for the FBA new product warehouse preferential plan, for each standard size parent ASIN that meets the requirements, the return processing fee for up to 20 items will also be waived.

In addition to the European site, the Japanese site also began to implement new charging items this month.

Japan site opens low inventory level fee

The trend of low inventory level fees has still reached the Japanese site.

Starting May 1, Amazon Japan will impose a low inventory level fee on a per-item basis for small and standard-size products whose inventory levels are consistently lower than buyer demand.

Amazon states that the Low Inventory Level Fee will only be charged for small and standard-sized items when the inventory level of the item is less than 14 days relative to historical demand (Historical Supply Days) . This fee will only be charged if both the long-term historical supply days (past 90 days) and the short-term historical supply days (past 30 days) are less than 14 days. For example, if the short-term historical supply days of an item are more than 14 days, but the long-term historical supply days are less than 14 days, no fee will be charged.

On the Japan site, low inventory level fees do not apply in the following situations: large or oversized products; newly registered professional sellers, within 365 days from the date of first inventory receipt; newly added Amazon Logistics parent products, within 180 days from the date of first inventory receipt.

In terms of charging standards, for products with a historical supply period of 0 to 6 days, the charge for small-sized products is 9 yen, and the charge for standard-sized products is 9 yen to 30 yen; for products with a historical supply period of 7 to 13 days, the charge for small-sized products is 5 yen, and the charge for standard-sized products is 5 yen to 8 yen.

( Price list for low inventory level fees on Japan site )

The platform calculates the historical supply days index for the parent product and adds the low inventory level fee to the FBA delivery fee. For example, a small product with a shipping weight of no more than 250 grams has a long-term historical supply days of 5 days and a short-term supply days of 13 days. The historical supply days take the larger value of the two, which is 13 days. Its FBA delivery fee is 288 yen, and the low inventory level fee is 5 yen per piece. The new delivery fee is the sum of the two, 293 yen. The delivery fee that sellers have to pay has increased.

Previously, the US site introduced a low inventory level fee, which caused great controversy. On April 1, the US site FBA low inventory level fee took effect, and Amazon announced that it would refund the fee collected in April and extend the transition period to May 14. By May 31, sellers will receive all low inventory level fees incurred between April 1 and May 14.

Amazon said that this transition period is to help sellers become familiar with fees and fee management tools, while listening to industry feedback and making three changes to the low inventory level fee:

1. Due to the greater unpredictability of managing inventory levels for seasonal products, obsolete products, and other low-volume products with varying demand, starting May 15, low inventory level fees will not apply to products with sales of less than 20 units in the past 7 days.

2. Low inventory level fees incurred due to long inbound and handling times caused by Amazon or Amazon-managed services will be refunded to the seller by the 15th of the following month. For example, fees incurred in May due to long warehouse delays will be refunded to the seller by June 15th.

3. For Prime Day 2024, the platform will provide a limited-time exception to the low inventory level fee for products included in Prime-exclusive Lightning Deals and Best Deals. The fee exception will apply to the four weeks after Prime Day, as inventory levels during this period may be more difficult to predict due to Prime Day sales.

Amazon's adjustments have eased the pressure of inventory changes caused by seasonal products and big promotions, but overall, sellers' operating costs have increased.