Today, we’re giving you a summarized version of the latest updates to Amazon’s fees—from FBA to referral fees. Peep in at the end of the issue to know more about it.
Speaking of referrals, did you know that you’ll get a reward for every successful newsletter referral? Scroll down at the very end to see how you can qualify!
- Is Amazon spying on its competitors? 🕵️
- Start selling on Walmart Marketplace 🛍️
- Was Amazon’s Big Spring Sale a hit? 🌸
- Updated seller fees 💰
POST OF THE WEEK
TRENDING TOPIC
Amazon's appetite for dominance has led it to spy on its competitors. In 2015, Amazon launched the secret operation "Project Curiosity," aiming to grasp the operations of its competitors, as revealed by Business Insider. 🤫
So how is Amazon doing this?
Big River Services International—Amazon's (not so) secret company—entered the scene.
- Operating under the facade of an independent entity, Big River sold various products ranging from t-shirts to beach chairs. Where? On the very platforms Amazon sought to understand, like Walmart and other platforms that use FedEx for logistics.
- To maintain secrecy, employees of Big River operated discreetly. They minimized their digital presence, avoided using Amazon-related email addresses, and even underwent coaching on how to manage potential exposure.
📊 Not spying—just "benchmarking"
Amazon says what it did is normal in the industry for benchmarking. However, the extent of their data-gathering efforts raises eyebrows, especially the lengths to which they went to keep it secret.
But of course, Amazon used the intel they got from Big River to improve their strategies. They made drastic changes such as tweaking logistics services and developing proprietary brands for rival marketplaces.
Recap: Amazon's relentless drive for a competitive edge has faced backlash. It received allegations of using seller data for its own products and stifling competition.
🚀 Quest to stay ahead
It's natural to want to stay ahead of competitors, but it's how you do it that matters. While benchmarking can be useful for your business, you don't need to go to extremes like Amazon.
Instead, you can try: figuring out which metrics matter most for your business. Then, compare these metrics with competitors, considering pricing, products, reviews, and market position. Lastly, use the insights you gained to make informed strategic business decisions.
TOGETHER WITH WALMART MARKETPLACE
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*Source: Walmart first-party data, 2021-22
BITES OF THE WEEK
- Pareto Principle: Brands emphasize "the vital few and trivial many” (less is more).
- Sust-AI-nable Packaging: AI is helping Amazon avoid excessive packaging waste.
- (Ware)housing in the U.S.: Temu sets up U.S. warehouses for faster delivery.
AMAZON NEWS
Was Amazon Big Spring Sale a hit?
Amazon's first Big Spring Sale took place last March 20-25, 2024. And everyone's curious about how it went. 🎉
PYMTS surveyed 7000 shoppers to analyze how this big event measured up against Amazon’s Prime Day 2023 and Walmart’s Walmart Plus Week 2023. Here’s what the report found out:
📦 Amazon’s Big Spring Sale vs Prime Day
The Big Spring Sale didn’t match Prime Day 2023’s usual buzz and sales:
- Consumer engagement. While Prime Day typically draws in 36% to 40% of U.S. shoppers, the Big Spring Sale fell short, attracting only 28%.
- Consumer spending. Shoppers bought fewer items during the Spring Sale, with an average of 6 items per shopper compared to Prime Day's 7.
🛍️ Amazon’s Big Spring Sale vs Walmart Plus Week
The Big Spring Sale outshone Walmart Plus Week 2023 in several aspects:
- Discounts. More respondents favored Amazon (44%) over Walmart (24%) for its impressive discounts.
- Product selection. Amazon pleased many more shoppers (48%) compared to Walmart (22%) when it came to offering a variety of products.
- Overall shopping experience. Amazon again emerged as the winner, with 47% of respondents preferring it over Walmart (20%).
🛒 Should you participate in next year’s Big Spring Sale?
Based on the numbers presented above, it looks like you haven’t missed out a lot if you didn’t participate in this sale.
Knowing Amazon, they took down notes on the sale that happened and would proactively improve their strategies for next year. So keep an eye out on how they handle minor sale events like this and see if their numbers increase.
CASH CORNER
New Amazon seller fees this 2024
While it is possible to start selling on Amazon for free, it won’t be the case when the business grows.
Amazon charges professional sellers a base subscription fee of $39.99. And it only goes up from there.
Jungle Scout charts ALL the fees you pay as an FBA Seller. These include the latest 2024 updates you need to know.
Here’s a quick look at how much it costs to sell on Amazon.
- Referral fees: The minimum referral fee is $0.30. Rates range from 8% – 45%.
- Refund administration fees: The fee is either $5.00 or 20% of the refunded charge, whichever is less.
- FBA fees: 2024 updates introduced new granular rate cards for standard-sized items and large bulky-sized items. Note: Low-Price FBA automatically applies to products priced at $10 below.
- Standard: The minimum fulfillment fee ranges from $3.06 (2 oz or less) – $6.92 (3+ lbs), with an additional $0.08 per succeeding 4 lbs. The regular limit is 20 lbs.
- Oversize: The range is $9.61 + $0.38/lb interval above the first lb – $194.95 + $0.19/lb interval above 151 lb
- Standard Apparel: $3.27–$6.92 + $0.16 /half-lb above first 3 lb
- Oversize Apparel: $9.61 + $0.38/lb interval above first lb – $194.95 + $0.19/lb interval above 151 lb
- Low-price Standard: $2.29 – $6.15 + $0.08 per 4-oz interval above first 3 lb
- Low-price Oversize: $8.84 + $0.38/lb-interval above the first lb – $194.18 + $0.19/lb-interval above 151 lb
- Low-price Standard Apparel: $2.50–$6.15 + $0.16/half-lb interval above first 3 lb
- Low-price Oversize Apparel: $8.84 + $0.38/lb-interval above the first lb – $194.18 + $0.19/lb-interval above 151 lb
- FBA storage fees: Starting April 2024 storage costs are as follows
- January–September:(Standard) $0.78 per cubic foot – (Oversize) $0.56 per cubic foot
- October –December: (Standard) $2.40 per cubic foot – (Oversize) $1.40 per cubic foot
Other FBA fees include Aged Inventory Surcharge, Low-inventory-level fees, and Inbound Placement Service fees.
Overwhelmed? Don’t fret. There are FBA calculators to help you compute an item’s profitability. Just make sure to choose calculators that are up-to-date with the new fees.
Happy selling!
