Amazon fee hike: Minimum referral fees
From the 9 October 2014 Amazon are implementing new per-item minimum referral fee. This will impact all sellers of low value products and we’re expecting for many that it will simply be no longer viable to sell on Amazon.
In effect it is a fee hike for all products with a selling price below £2.67 (or €3,33 for European sites)
These fees are billed as “per-item” minimum referral fees, not per-order. That appears to imply that even if a customer purchases multiple products from you in a single order the fees will be applied to each item separately, not to the total order value.
If you sell low value products you will almost certainly want to consider product bundles rather than continue to sell products on an individual basis.
Amazon per-item minimum referral fees
Jewellery and Watch products
A new £1.25 per-item minimum referral fee.
We’re still trying to figure out what fee will be charged for the 28,455 products listed on Amazon UK in Jewellery with a current selling price of £1.25 or lower, it looks like with the new minimum fee you’ll be paying Amazon to sell on their site.
Electronics Accessories and PC Accessories products
A new £0.40 per-item minimum referral fee (for sellers on the Professional Selling Plan, this is a fee reduction from the existing £0.50 per-item minimum referral fee).
All other product categories
A new a £0.40 per-item minimum referral fee (with the exception of Books, Music, Videos, DVDs, Software and Video Games, Video Games Consoles and Grocery).
Kindle Accessories products will have a referral fee of 51.75% (up from 40.25%) with a £0.40 (plus VAT) per-item minimum referral fee.
Amazon.de, Amazon.fr, Amazon.it and Amazon.es:
Jewellery & Watch products will have a new €1,50 per-item minimum referral fee.
All other product categories except Books, Music, Videos, DVDs, Software and Video Games, Video Games Consoles, and Grocery will have a €0,50 per-item minimum referral fee.
Holy moo-moo that’s going to hurt.
Maybe that’s the understatement of the year?
Presumably to counter the Far East sellers that are flooding Amazon with items including postage at below prices sellers can send them for within the UK. We were happily selling a product for between £2-£3 with an adequate profit that is now being sold at 50p inc postage from China. Our postage was a 50g second class large letter.
It seems a sensible decision on Amazon’s part, although I feel for sellers who will be severely affected.
Does this mean “Books, Music, Videos, DVDs” category has no change?
That’s our understanding – no change for the “except” categories
The full article is in the headlines section in seller central yesterday
Don’t forget that according to http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=3149301 the Jewellery Category will go UP from 25% to 28.75% as we jewellery people make so much money but I have been told that Amazon have their own new jewellery range out, so it maybe their way of being competitive B-).
Below is an email I wrote to Tamebay.com last night with a few names changed and Chris kindly responded that there would be an article today.
Working some figures yesterday based on the 28.75% fee it would mean that an item of £4.35 would have a £1.25 fee. As the retail price falls the % goes up as the fee is the same.
It still seems VERY vague as to what is going on.
Basically I got an email from Amazon telling me about new fee structures.
Maybe I am being a bit thick.
Amazon show that on October 9th 2014 the jewellery category rises from 25% to 28.75% referral. (Wahhayy)
They also show a PER ITEM MINIMUM FEE of £1.25 (plus VAT)
Now what I asked Amazon seller support on my 40 minute conversation was, I sell some items at £0.99 in jewellery.
Will I be charged £1.25 as the fee from Amazon.
At the end of 40 minutes and after her taking advise she told me verbally.
If a customer buys a single item for £0.99 I will be charged £0.25 (25%)
If the customer buys 3 then I will be charged £1.25 EACH.
I told her she must have this round the wrong way and she gave up and said that a colleague would answer the query hence the response below.
They seem to have messed up the % below as they say 15% and I think they are confused with the Lux vat rate or an electrical category.
The current jewellery fee is 25% for pro merchants with a monthly subscription and NO PER ITEM FEE.
Do you have any inside information on this or any idea what on earth is going on.
Kind regards Simon
——– Forwarded Message ——–
Subject: RE: [Case XXXXXXXX] Seller Fees – Updates
Date: Mon, 18 Aug 2014 17:46:19 +0000 (UTC)
From: Amazon Seller Support
Good evening from Amazon Seller Support.
My name is xxxxxx and I will be assisting you this evening, I am contacting you in relation to your query regarding the changes that are being implemented in certain referral fee categories.
As you know, with effect from the 9th of October 2014, Amazon are implementing new per-item minimum referral fees as follows:
-Jewellery and Watch products will have a new £1.25 per-item minimum referral fee.
-All other product categories except Books, Music, Videos, DVDs, Software and Video Games, Video Games Consoles, and Grocery will have a £0.40 per-item minimum referral fee.
You can read the full information by using this link:
***UK fees are shown under section E and please be advised that the fees shown are VAT-exclusive. VAT is applied at the Luxembourg rate of 15% for non VAT registered sellers.
Therefore, to take the example of ASIN B00K5V2X2C. The fees on this item (referral fee of 15% for the Jewellery category) are currently as follows:
Total cost of order: 0.99 x 15% = £0.15
Total referral fee charged £0.15
Please be assured that the referral fee changes will only affect items with low total sales prices.
For example, in a category that has a 15% referral fee, a £0.40 per-item minimum referral fee only applies to items with a total sales price below £2.67. Those items will now have a referral fee of £0.40, while items with a total sales price equal to or greater than £2.67 will continue to have a referral fee of 15% of the total sales price.
As the minimum referral fee (1.25GBP) is not greater than 15% of the product’s sales proceeds (0.15GBP), the referral fee for this ASIN B00K5V2X2C will remain the same and the new fee increase will not impact this listing or ASIN B00K5V2PJS.
Thank you again for your email, I hope this information has clarified the issue for you.
Of course, should you have any further queries or requests, on this issue or any other issue, then I would ask that you kindly open a new case by using the following link:
** Please be advised, by opening a new case you will receive a faster response to your query. Thank you for your cooperation.
Have a lovely evening
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Sorry just worked out that the 28.75% is actually INCLUSIVE of LUX VAT so that is actually the same if my maths is correct.
Apologies for that.
just in case anyone isn’t aware of the the per item fees in jewellery, I thought I would have another go at communicating with Amazon.
I gave the example of a £0.99 pence split ring that we have listed on Amazon.
If a customer purchased this item x 1 then will I, the seller, be charged £1.25 in Amazon fees. The response was “YES”.
I then asked.
If a customer selects a quantity of 3 of the item above, will I be charged £1.25 fee or will I be charged £1.25 PER ITEM.
The response was £1.25 PER ITEM.
I then asked the CS rep if there had been complaints from other sellers, as I would have to delete these items from Amazon as they were not cost effective to sell. She replied that there had been many complaints and I asked if mine could also be forwarded to relevant department.
On some items, as the initial £0.99 split ring, I don’t mind making a tiny loss as it brings the customer in for other items, but instead of a few pence loss, it will turn into more than £1.00 loss with the new fees.
We do the items as packs so the packs will continue but some customers just want to purchase 1.
Don’t forget October the 9th 2014.