Amazon started as online book store and has grown to be the worlds largest online retailer.
National Press reaction to Amazon fee hikes
There’s a huge amount of press in this weekends papers regarding next week’s Selling on Amazon Referral Fee increases across Europe. Some of the headlines are:
The reaction appears to be exactly the reverse of the situation we’ve seen in the past when it was eBay hiking selling fees, previously we’ve seen sellers threatening to leave eBay in favour of Amazon. Now it’s Amazon traders who are looking at their selling costs and for once eBay fees are not only looking attractive, but are looking cheap and value for money!
The big difference of course is that eBay doesn’t compete with their sellers, whilst on eBay it’s supposed to be a level playing field and if fees increase for one seller they increase for all, on Amazon retailers also have to compete with Amazon themselves. You can’t simply increase your sell price on Amazon to balance out the fee increase if Amazon also stock the same merchandise as you.
Amazon also have a price parity policy which means if you offer a product on Amazon it can’t be more expensive than on your own website and must match the lowest price you offer the product for on other marketplaces. If Amazon fees rise and you wish to increase your sell price on Amazon to offset the fee rise then you have to increase your prices on other marketplaces too.
Many of the press articles include retailers (who have asked to remain anonymous) saying that they’ll scale back their operations on Amazon in favour of eBay, Play.com and their own websites. Whether this is all talk or if retailers really will take action remains to be seen but monitor your competition on Amazon closely next week to take advantage of any changes in price strategy or gaps in your competitors inventory on the platform.
One thing is for sure, despite the referral fee hikes Amazon can’t take up all the slack if retailers vote with their feet and if you’re not listing on Amazon the chances are that some of your competitors will be.
Daily Mail quote “Any business selling more than 35 items a month now faces fees of £28.75. On rival website eBay, however, sellers can list up to 50 items a month free and pay a flat 10 per cent when an item is sold.”. I’m assuming that refers to new shop fees, where there is also a monthly fee.
Will next week’s article about Ebay’s fee increase say “It is now considerably higher to list an item for sale on Ebay where it is totally free on Amazon to list for as long as you like”.?
They don’t like facts getting in the way of their story, do they?
Also, it’s “IndependEnt”.
The press haven’t got a clue – it’s 100 free auction listings with a 99p or lower start price for private sellers in the UK.
They’ve just copied their colleagues articles in the US where it’s 50 free listings for casual sellers!
They need to check out business fees for a fair comparison!
If the national press have got it all wrong as seems likely it is because they are not well versed in the ways of ebay or Amazon. So there is obviously a massive vacancy for somebody who is well versed to provide the National Press with the facts and figures and to get the story right in the media.
Perhaps a Tamebay poster should think about contacting the Daily Mail etc and offer to provide an authorative article that is completely correct to UK circumstances. Obviously such as the Daily Mail would pay for such an article. Currently their own staff probably provide the articles and it is likely that few of them know anything about the practicalities of selling or indeed buying on ebay or Amazon.
Price increases will hit sellers big time. Most sellers were already working with 5% mark-ups this days. We bumped the prices up yesterday morning to bring it to level with the new Amazon fee structure. Guess what !!! Sales went down by 90%. And today has been death for us. We will possibly close the business down. The problem with selling at eBay was already high fees. It is not only eBay fees you have to consider Paypal fees on top as well. So if I spit up it is my moustache, if I spit down it is my beard 🙁
It will be interesting to see over time how sellers actually respond to this move by Amazon.
It will also be interesting to monitor Amazon’s next moves – for example, are they doing this as a way of removing certain types of seller or are they pulling back from the marketplace model in favour of something else?
Maybe its an experiment to test the elasticity of their fees – at what point do marketplace sellers turn anger and words into action by voting with their feet? (I personally thought the fees were unrealistic BEFORE the announced increase!)
In many cases, I find the way Amazon treat their marketplace sellers is abhorrent and they use the old ‘in the name of customer service’ as their reasoning…. lets see if this latest move galvanises any seller action… I for one will be keeping a ken eye on the reactions on both sides of the fence.
Do these fee increases effect all sellers or only specific categories?
what about dvd and cd ?
How it is the National Press have given this so much coverage?
Would it be cynical to suggest that another marketplace may have ensured the information found its way into the inboxes of news editors.
Probably more to do with the fact that earlier in the year the stories of Amazon’s tax avoidance generated plenty of comments & letters from readers…So editors know that anything to do with Amazon is a ‘live’ issue- which engages with their readership – probably more so, than Ebay issues.
I’d agree the tax bit encouraged putting the story in their papers but if you read the articles all the papers ‘wrote’ the same story.
They all spoke to the same unhappy sellers who quoted the same word for word reply sugesting ebay was the way to go. Not to mention all of those who quoted them did the same fee comparison which favoured ebay.
It suggests to me the papers re-hashed a press release rather than doing any actual reporting.
At least one of the papers was good enough to say they were quoting a report from another paper.
And Amazon have a Price Parity condition as well !??!