How to benefit from the recent changes at Amazon…

By Sharon Fussell, November 6, 2014

I do admit this past year has been a frustrating one when using the Fulfilled by Amazon method of selling.

Many of the great advantages of using FBA has been lost in Amazon’s recent changes.

It was a dramatic change to remove the free Super Saver delivery service for orders under £10 (unless buyers have an Amazon Prime postage account, which costs £79 per year).

How to benefit from the recent changes at Amazon...

How to benefit from the recent
changes at Amazon…



I feel this change undermined incentives for selling using FBA – e.g. if a buyer’s order is less than £10, they have to pay an additional postage cost of £2.75, thus a £2.81 book rises to £5.56.

This additional cost must push buyers to Merchant Sellers where they will pay £2.81 in total for a low-value book – not £2.81 plus £2.75, practically doubling the cost of a FBA books (for non-Prime users).

Recently, Amazon has also increased fees and commissions for FBA services for sellers, and this especially impacts on low-value sales.

So I was impressed with the introduction of a new service where Prime members are able to filter searches and browse results to display only Amazon Prime products, including all FBA (Fulfilment by Amazon) offers.

Should buyers choose this option, they will only see products sold using FBA and Prime, thus this should mean that if you have priced a product over and above a Merchant Seller and your item languishes several pages deep into the selling pages, then you stand a good chance having the only product available to purchase.

Buyers won’t have other products to compare prices with and will likely pay a higher price to get your item than if they compare all prices on the system.

This is because many buyers will not search further than page one of the selling pages. They often don’t spend much time choosing a product, so if they have only a few choices to decide upon, the competition is often vastly reduced – in your favour!

Over the next few weeks I will be looking to increase prices of much of my low-value stock on FBA, to test the waters. I will let you know how I get on: will it lead to higher-value sales for items currently priced for £2.80 or less?

Items are often priced low just to leap-frog Merchant Sellers’ prices and hold top position on the selling page.

If you remove the Merchant Sellers from the searches then your FBA product should stand out, as usually there are fewer FBA products than Merchant Seller products.

If you have considered using the FBA methods of selling on Amazon, it is quite a commitment, in that there are upfront costs compared to selling as Merchant Seller on Amazon (which is free until you sell an item).

Additionally:

  • You will pay to send items to Amazon’s fulfilment centres by the boxful.
  • You pay Amazon a storage charge on a monthly basis: cost depends on how much square footage you use for your books.
  • You will have to subscribe as a Pro Merchant Seller. This costs £28.75 per month.
If you opt to only sell using the Merchant Seller method, you will only pay Amazon once you make a sale.

Then you will pay fees and commissions, but also remember to allow for actual postage costs when you price your item: you do not want to be out of pocket when you make a sale.

Here is Amazon’s latest information in regards to FBA:

The festive season is a busy time for sellers and a perfect time to consider using Fulfilment by Amazon.

Fulfilment by Amazon (FBA) is an Amazon service that enables sellers to store inventory and fulfil orders from Amazon fulfilment centres. Avoid needless stress this year by having Amazon pick, pack and ship your items to buyers.

You should also read about how Amazon’s new Prime services will impact on you if you sell using FBA (see below).

These changes are geared towards the other feature of Prime membership: Amazon’s movie and DVD download services. If you have a Prime account they are included in the price of £79.

Crucially though, how will you as a FBA seller benefit from this service?

Indirectly, you will benefit when buyers have a Prime account and opt to filter searches that only show ‘Prime’ products (they do this in order to benefit from their Prime postage).
 
Amazon Prime, the membership programme that provides members free two-day shipping on millions of items, has recently introduced No-Rush Shipping, the latest in a long list of member benefits.

The “No-Rush” programme offers Prime customers incentives such as Amazon Instant Video credits toward streaming movies and TV shows, Kindle Books, Digital Music etc. to encourage them to opt for the 3-5 working days shipping option. The type of incentive customers are awarded is displayed during checkout.

The new programme offers additional benefits to existing Prime members and makes the programme even more attractive to prospective Prime members. Prime members are able to filter search and browse results to display only Amazon Prime products, including all FBA (Fulfilment by Amazon) offers.

 

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