Amazon hike Kindle accessory fees to 40.25%
Amazon is a great place to sell for merchants but perhaps not so if you’re in the business of selling Kindle accessories. They’ve just increased the selling fees from 8.05% (7% plus 15% VAT) to a whopping 40.25% (35% plus 15% VAT). This means Kindle accessories will from the 15th of October attract the highest selling fees on Amazon, previously it was Jewellery with 28.75% selling fees.
This is in anyone’s book a massive price hike, I don’t know too many sellers who can handle a 32% increase in selling fees without it severely impacting their profit margins, if indeed it leaves any profit to be made at all. Sellers will already have ordered stock for Christmas and to impose this sort of cost hike is likely to leave some sellers with unsaleable stock.
I have to say this is a reflection on the disadvantage of selling on Amazon. Amazon are a retailer in their own right and this price hike won’t affect them – they’ll still be able to sell their own Kindle accessories at the same margins as prior to the merchant selling fee increase. The price rise may be a ploy to decrease the attractiveness of third party Kindle accessories in comparison to genuine Amazon accessories, or it may be simply because Amazon perceive the products are high margin and so the market can stand the cost. I don’t know the answer to this, but I do sympathise with the affected sellers who are now faced with limited choices.
The best advice to those sellers with large inventories of Kindle accessories is bizarrely to sell them on eBay. Whilst there have been many legitimate complaints about eBay’s last fee rises you can be confident that at least eBay don’t compete with you as they’re not a retailer. eBay may shaft you with a fee increase but at least they shaft all sellers equally leaving a level playing field.
If you’re selling Kindle accessories you need to reassess your selling strategy immediately. There’s just 43 days left until the new Amazon selling fees come into effect, and if your inventory is sitting in FBA stock you will also need to factor in FBA fees on top of Amazon’s selling fees.
The full Amazon announcement
We are writing to let you know about the launch of the Kindle Accessories category on the Amazon.co.uk, Amazon.de, Amazon.es, Amazon.fr, and Amazon.it Marketplaces. Accessory products with “Kindle” in the product title or product description, or that are listed for use with or compatible with Kindle, should be categorised as Kindle Accessories. Listings will be automatically moved to the correct product category beginning 15 October, 2012. The referral fee will be 35% and will be effective beginning 15 October, 2012