New fees for media, new shipping


#1

Dear Seller,

We are making three important changes for sellers who sell Media products on the Amazon Marketplace on Amazon.com:

  1. Sellers will be able to offer free shipping and set their own shipping prices on Books, Music, Video, and DVD products.

Effective March 1, 2017, you will be able to set your own shipping prices for Standard delivery and set different shipping prices by region for Expedited, Two-Day, or International delivery. Your current shipping settings and shipping prices will be retained when the new capability launches on March 1. Beginning on that date, you can adjust your shipping prices for Books, Music, Video, and DVD products using Shipping Settings.

  1. Sellers will be able to compete for the Buy Box for Books in new condition.

Starting in late Q1 2017, eligible sellers will be able to compete for the Buy Box for Books in new condition. The Buy Box is the display on the product detail page with the Add to Cart button that customers can use to add items to their shopping carts. When one of your listed items appears as the default on the product detail page, you win the Buy Box, which can increase your chances of selling that item. To compete for the Buy Box, both your selling account and your listed item must be eligible. Becoming eligible to compete for the Buy Box doesn’t guarantee that you will win it (https://sellercentral.amazon.com/gp/help/200418100). You can increase your chances by pricing your items competitively, offering Prime and free shipping, providing great customer service, and keeping stock available (https://sellercentral.amazon.com/gp/help/201687550).

  1. Changes to Selling on Amazon fees.

We will be making two changes to how Selling on Amazon fees are charged for Media products (including Books, Music, Video, DVD, Software, and Video Games). These fee changes will not take effect until March 1, 2017, to give you time to plan accordingly.

  1.  Variable Closing Fees (VCF): The VCF charge in Media product categories (Books, Music, Video, DVD, Software, and Video Games) will increase to $1.80 from $1.35 per item. This charge will appear as a Closing Fee (CF) instead of as a VCF to avoid confusion, as it will be a fixed fee rate and not variable.
    
  2.  Referral fees: Currently, the referral fee for Media products is an applicable percentage of an item’s sales price (excluding any shipping or gift wrap charges). Effective March 1, 2017, the referral fee will instead be calculated on the total sales price (the total amount paid by the customer, including the item price and any shipping or gift wrap charges), as follows:
    

Current Fees

  • Books, Music, Video, DVD, Software, Video Games (non-console): VCF - $1.35 per item; referral fee - 15% of the item price
  • Video Game Consoles: VCF - $1.35 per item; referral fee - 8% of the item price

New Fees

  • Books, Music, Video, DVD, Software, Video Games (non-console): CF - $1.80 per item; referral fee - 15% of the total sales price
  • Video Game Consoles: CF - $1.80 per item; referral fee - 8% of the total sales price

For additional information on Selling Fees, please see the Selling on Amazon Fee Schedule, https://sellercentral.amazon.com/gp/help/200336920

Regards,
Amazon Services


#2

The shipping change will encourage the race to the bottom?


#3

OK so let’s do the math. $1.80 plus 15% of the total sales price (including shipping) for every media item.

For a small seller like me, shipping by USPS is a minimum of $2.67 (for items less than 1 pound). So in order to make $1.00 on something the total sales price including shipping will have to be:

X- 1.80 - (0.15X) - 2.67= $1.00

where X is the sales price including shipping

$6.44 is the minimum price that you will have to charge (including USPS shipping) for items weighing less than a pound if you want to make $1.00 or more on an item.

It looks like I’m probably going to be getting rid of a third of my inventory.


#4

Jeez I forgot about that, duh!


#5

>$6.44 is the minimum price that you will have to charge (including USPS shipping) for items weighing less than a pound if you want to make $1.00 or more on an item.

And that assumes its cost to you was $0, that packing materials cost $0, that your time in preparing the package has value $0, etc.

As always, low price is a game for high volume sellers only.

bunga bunga!


#6

Even high volume sellers won’t be able to sell penny books anymore. The most they’re going to gross is $.15. They can’t make money like that. I feel like Amazon is trying to get out of the book business all together. Before they were making $1.35 for basically doing nothing (no storage or shipping). Now they’ve shot themselves in the foot because they wanted a bigger piece of the pie. Unfortunately, they have not left enough for the merchant fulfilled sellers, ergo there will be no pie for anyone. Thanks Amazon!


#7

What happened to USPS Media Mail? When I want to buy shipping for a book or DVD by USPS, I’m only give 2 choices: First Class or Priority Mail. I need to have Media Mail as a 3rd choice!


#8

I have always wondered how penny sellers make any money, can you explain this to me?


#9

The greed is unbelievable …what if we all strike, we a re barely making money as it is…what if we all gonon vacation on a set date until they agree to not raise their profits?


#10

What is going to happen is that the high volume penny sellers – a guaranteed 1.35 per item – will drop out. That’s a very large portion of their book sales. As I said, I’m probably going to have to dump a third of my inventory so rather than them getting $1.35 plus 20-30 cents, they will be getting nothing. As one of the other posters said amazon is “shooting themselves in the foot”


#11

You have to adjust your shipping selections. Put stamps.com at the top to get media mail.


#12

> {quote:title=bunga bunga wrote:}{quote

> Dear Seller,

Hey bunga. In a somewhat twisted manner, it’s gonna be interesting to watch, ain’t it?


#13

They don’t use USPS to ship, they use some other service that gives a high volume discount. I have no idea how much they charge


#14

The new fee structure essentially deducts $1 per book from my current net proceeds from Amazon. Sometimes that will mean an actual loss on some items. (All my books are
new, obtained from the publishers.) However, the price paid by the buyer is quite
variable depending on the competition. Even Amazon has greatly increased their prices
on some books.

So I would expect that after a few months of the new fees, a significant number of sellers
will go broke and no longer affect the competitive price structure. If and when the market
settles into a new pattern, then we will know if there is a viable business plan. Meanwhile, I and other sellers will not be buying much if anything from the publishers. Perhaps that will cause some publishers to alter their discount schedule? The critical question is whether
the publishers will continue to give Amazon larger discounts than we get. To the extent
the publishers continue that practice, then independent booksellers will be squeezed out and
Amazon will become ever more dominant.


#15

Most dvd’s weigh less than 5 ounces, making the USPS 1st class fee 2.60 + .07 for amazon if you buy their postage. The cheapest media fee is 2.61 + .07 = 2.68

They offer the cheapest rate, i.e. 1st class or if you want to eat the priority price.


#16

I understood the ‘variable’ fee increase was coming in conjunction with the ability to set our own rate for media shipping. Wouldn’t that mean that the .45 cent increase could be simply written into our own increased shipping rates, as well as figuring in the postal increase occurring next month? For ease of accounting, I have always simply used $2.64 as the amount of media shipping allowance reimbursed to me by Amazon ($3.99 - $1.35) since that $1.35 was not variable at all. Now the new amount ($1.80) will be subtracted from whatever I decide my new shipping rate will be, probably $4.75 to accommodate the postal increase on packages over 1 lb. Am I missing something in this scenario?


#17

You’re also going to be charged the 15% commission on shipping as well, so yu need to factor that it. $4.75 will net you only $4.04. If you want to net $4.75, you need to set your shipping at $5.59.


#18

>So I would expect that after a few months of the new fees, a significant number of sellers will go broke and no longer affect the competitive price structure.

I can’t for the life of me imagine why that seems likely to you. What seems likely to me is that prices will simply float upward. People who have a bazillion books listed at a penny and sell 5000 books a day are not just going to leave their pricing alone until they go bankrupt. They have a lot more to lose (I’m guessing) than you do, and certainly more than I do, by letting their business go under. I’m befuddled by your theory here.

bunga bunga!


#19

double post


#20

I must defer to your opinion, as it is based on many times more business than mine. Still, I have been selling new books here for 20 years or so, and have concluded that some or most
of the competition has been from sellers who eventually disappeared. And the emerging competitive situation in a few months will tell us more than our best theorizing.

There are three or four distinct types of buyers, at least. One type always chooses “new”,
while another type (nearly as numerous) usually chooses “like new” even if the price
difference is only 25 cents. I offer the same book both ways, but use cheaper packaging
with a greater risk of slight damage which such buyers are ready to accept. So I end up making the same either way.

Penny booksellers I do not really understand. If they are hiring low-wage people to handle their books, then more errors will occur and poorer feedback. I have noticed in this forum various statements that those sellers get cheaper shipping rates, but I have not seen specific figures. Personally I purchase stamps on ebay which effectively reduces my shipping cost by 40%. I agree the mega-sellers will try to raise prices to survive; but the question remains, will such a business plan work?