What is the reason Amazon charges 1.80 extra on Media?


#17

Why does the supermarket charge $5.99 for a 12-pack of Pepsi?

Why do you charge $34 for a DVD?


#18

@StoptheMadness, based on a brief online search, it appears that in 2016, Amazon announced 3 changes that affected booksellers and other media sellers, that were put into place on Mar 1 2017:

  1. Booksellers could compete for the Buy Box in “new” condition.
  2. Referral fees became a category-dependent percentage of the total of sales charge + shipping charge (BMVD was and is 15%).
  3. Closing fees changed from “variable” to “fixed” for media (changing from $1.35 to $1.80…not sure how $1.35 was “variable” though…).

You seem to be wondering whether the closing fee and current referral fee composition (percentage of price + shipping) were redundant methods of reducing books priced at 1¢.
:small_blue_diamond:Referral fees based on price + shipping primarily affect FBM offers.
:small_blue_diamond:Closing fees apply to all BMVD, both FBA and FBM.

This way, regardless of fulfillment method, Amazon gets the closing fees AND makes the media offer strategy of underpricing the item and overcharging the shipping less appealing to FBM.

In this way, changes 2 and 3 above were not redundant but likely both contributed to a single Amazon goal.


#19

Yes, basically because they can.

Once upon a time it was $1.35 and came directly off the shipping allowance. It was a shipping skim, pure and simple. Only with a much more hypocritical name.

Then they got more creative with their bookkeeping and naming and transferred it away from shipping directly to the order, and called it a closing fee.


#20

Are you asking why the closing fee does not apply to all categories? I suspect that it has to do with historical “abuses” in the media category that were/are simply not able to be duplicated in other categories. :woman_shrugging:


#21

Thanks so much for the answer. I think you are right on why. I knew there was a better reason other then just because they can. Thanks for the info when it changed, havent sold bmvd in 10 years probably.


#22

This could very well be the answer of why they do it, it seems in todays makeup of fees, with 15 percent being charged on the shipping as well and shipping fees continue to go up, that they could look at this fee and maybe change it, as it seems much harder to do what was being done that possibly caused the fee in the first place.

Thanks again for the great answer.


#23

The “closing fee” which was initially a shipping skim (as I mentioned) was in place before FBA started.

The reason always has been “because we can”.


#24

Again, A non response is just as good as this response. Has nothing to do with the question.

But the question has been answered, no thanks to the thats the way it is answers.


#25

Here is another question for you.
Why are referral fees different for different categories?
The referral fee can be 12%, 15%,18% etc…
Why aren’t the fees the same across the board?
A dollar is a dollar no matter what category it is in.


#26

By the time I started to sell on Amazon, this was a widespread opinion among older media sellers.

I never cared about how the fees were allocated. Just selected media to sell on the site which met my margin and profit goals.

Always assumed Amazon took more from media sales because there was more margin to take, and the low margin media sellers were one postage increase away from being gone.


#27

The simple answer is that they can. The fee used to be a part of the shipping compensation when they had a fixed shipping fee you had to use…and when they moved away from that structure allowing third party sellers to set their own shipping free (including zero) they kept that and created a separate fee. I believe this is there as well because historically they were a media company. You are right, it raises the fee structure considerably. On a $10 DVD, that’s an additional 18% on top of the 15%.


#28

It was not opinion that it was a shipping skim (the term “skim” was) but it was directly tied in to shipping. The accounting process was clear, that fee was deducted directly from the shipping “allowance”. It was not tied to the income from the item, tied directly to shipping.


#29

IN this day and age, with a lot of people using free shipping, and the shipping fees considerably higher then 10 years ago for first class, it seems the fee its quite outdated, but Amazon will continue to take if they feel they can. As times change, amazon remains the same on bmvd category it seems, or even worse for that matter.

It seems most sellers on ebay are switching back to charging shipping, as am I, due to the huge increase of shipping prices across the board, and it seems customers are willing to pay.

The days of free shipping cost, is going out it seems.


#30

Not after I started in 2008. But it clearly justifies the shared opinion.

It was deducted from the total proceeds at that time, not the shipping.


#31

There has NEVER actually been free shipping on anything.
Either the shipping cost is built into the price of the item or it is shown as an added cost.


#32

Im not sure you understand. You really think I think shipping is free? Ive been using free shipping on Amazon since they allowed us to, but the days of using it are coming to an end, due to the rising cost of shipping something across the Us. First class mail sometimes cost 5.50 now. Since you cant choose who purchase your products, Long distance shipping is costing more and more, so its impossible to figure that into price overtime.

There was a point in time, where everyone was using the free shipping model, because it was much easier to figure out shipping cost, now shipping cost are making it where you almost need to charge shipping. Ebay is prime example of that, I am moving away from free shipping on priority mail items due to increasing cost of it and not knowing where your item will be going.

I remember when you could ship any 1 lb priority mail item for 4.80 anywhere in the US. 3lb items are costing 15.00 plus to Cali where Im from. It might have even been 4.20, it was pretty low, but was nice.
Those same items are now 8.00 or more sometimes.

I just think the free shipping model is going to be changing back to charging shipping.


#33

For Amazon sales it does not matter if you build in the shipping price or charge separately – you still have to pick a price. The rise in shipping just means you may have to raise your item or shipping figures.

If you mean that it is easier to adjust shipping templates than item price, therefore makes more sense to add on shipping rather than include with free shipping – then you do have a point.


#34

I get the push towards more transparency for actual shipping costs to Buyers. On eBay, I separate them out; on Amazon, everything is SFP/free shipping except books. Most of Amazon’s Buyers have been trained to balk at shipping charges. :roll_eyes:


#35

That is the only drawback here, is I do think people want free shipping. But I am seeing other sellers starting to change and charge shipping for items. Trying to figure out shipping to Cali or Washington would be a bit crazy to try and work that into price. You would have to add in 10 to 15 dollars just for west coast sales.


#36

Not sure if you mean “you” or “papy specifically”… :sweat_smile:

My personal approach is to aim to add the mode of the shipping charge range for an item–not the mean or the median, but what is most frequent. This means that sometimes you come out behind, sometimes ahead; it evens out. :woman_shrugging: