Amazon started as online book store and has grown to be the worlds largest online retailer.
Amazon slash minimum add on order to £10
Previously low-priced products classed by Amazon as add-on items could be purchased as long as you’re ordering at least £20 of eligible products. It was deduced that a product priced below £5 would probably be included in the Amazon add-on programme, but Trudy spotted several products priced as high as £7.80 classed as add-on items.
At the same time Amazon have lowered the threshold for shipping add on items. They can now be purchased as long as you’re ordering at least £10 of eligible products fulfilled by or sold by Amazon. Whilst the order total has been slashed in half from £20 to £10, it’s likely that Amazon will be upping the value of items included as add on items.
In all likelihood Amazon are simply unable to sustain free delivery for low cost items, even bearing in mind that retailers will be charged a delivery fee for FBA products. By putting in place a minimum order value Amazon are limiting their exposure to deliveries where the cost is higher than their revenue.
We can also deduce that the add on program has had a significant impact on sales – why else would Amazon slash the minimum order value in half? Low cost goods have always been problematic for retailers to fulfil whilst keeping costs reasonable. For Amazon it appears that there’s a balance between sales and costs and they’ve had to rebalance the numbers to optimise revenues.
You can make up a complete order from Amazon add on items, so long as the total is above £10 then the order qualifies for all of Amazon’s shipping options include free next day with Prime or free Supersaver delivery.
What does this mean for you? Well if you’re looking at your advance orders for the Christmas period at the moment you may wish to think your stock profile. Don’t get caught with a load of low cost stock that might be left hanging in FBA because it’s been classed as an Amazon add-on product.
Consider shifting your Christmas stock profile to sell products with a retail value of at least £10 to ensure your stock ships speedily and doesn’t have to be shipped as an add on item.
Thanks for this Chris & also Trudy.
This is an interesting little nugget we hadn’t spotted.
We strongly suspect the trigger criteria for the add-on item classification may vary by category.
Currently we can’t work out exactly how Amazon determine whether a product is treated like this so we cannot predict.
We are doing some experiments to see if we can work out the price point(s) in the categories we compete in.
Your advice at the end is sound for now but there are also other strategies like simply switching products from FBA to merchant only where you can still ship at a competitve rate (e.g. large letter) as against packets where there is still a nasty problem.