Amazon offers fee discount for sale price reduction
Did you know that Amazon sometimes offers fee discounts in exchange for a merchant reducing their sale price? I didn’t, but apparently if they like your product they may offer you an incentive.
We’ve seen an email offering a merchant a 10% fee reduction, which read: “To help you provide competitive prices on popular items, we are offering you a limited-time referral fee discount for the ASINs listed below. This fee promotion starts on 17 March 2016 (GMT) and will run until 30 March 2016 (GMT), inclusive. During this promotion, if the total sales price (the total amount paid by the buyer, including the item price and any shipping or gift wrap charges) for an eligible item is at or below the specified Discount Price Threshold, your referral fee rate for each sale of that item will be reduced by the specified number of percentage points“.
In exchange for reducing their price from £6.99 to £5.80 or less the 10% reduction on fees would be forthcoming. This means instead of say a 15% fee being charged, Amazon would only charge a 5% fee on any sales at the reduced price during the promotion period.
Amazon make it very easy for merchants to update their prices with a pop up pre-populated with the suggested discount at the price which will qualify for the reduced fees.
We don’t know how often Amazon runs promotions like this or how they select products although it’s probably that the promotions are selectively targeted on popular selling lines when Amazon themselves or other retailers are out of stock of that line or similar products.
Have you received a similar offer? More importantly if you accepted the offer did you see sales on that particular line accelerate during the discounted fees promotion period?
I always thought it was a 10% discount on the fee itself, so instead of paying 15%, you pay 13.5% (not 5%)
its pecentage points off, rather than percent of total off.
15% – 10% = 13.5%
15% – 10 percentage points = 5%.
The law of unintended consequences:
We have seen these offers regularly – one we accepted yesterday had this immediate response from a customer:
“Hi. I’ve cancelled my order and re-ordered as your price fell overnight (annoying!). I’m happy to keep the original one dispatched providing you use the lower price or else I’ll just have to return it to you if you can’t cancel in time. Please let me know your preference. ”
In this case the original one was an FBA sale with the subsequent one being fulfilled by us so no doubt we have a really confused customer.
You can also see any offers in the Pricing Dashboard under the Fee Promotions tab.