As Amazon’s Prime Day promotions are fast approaching, the company has been ramping up its actions. It’s tightening its scrutiny, sweeping for policy violations, and a large number of accounts have been banned due to non-compliant variants. Unexpected glitches with shopping carts have also been reported frequently…
But that’s not all, Amazon’s policy changes have also been more frequent.
Amazon has added three new exemption policies to its low-volume inventory fee
Previously, Amazon had announced that starting from April 1, 2024, it would impose a low inventory level fee on standard size items that consistently fail to meet buyer demand (i.e., inventory levels that are persistently too low compared to sales volume).
After pushback from sellers, Amazon issued another announcement, stating that it would provide a one-month transition period for this new policy.
In May, Amazon issued a new notice on this policy, introducing three additional changes intended to make the low-volume inventory fee more effective in encouraging sellers to improve their inventory management, thus ensuring good inventory conditions.
Applicable sites: United States, Germany, France, Italy, Spain
1.Starting from May 15th:
For the US site, low-volume inventory fees are waived for product parent ASINs that have sold fewer than 20 units in the past 7 days.
For European sites (Germany, France, Italy, and Spain) supporting the Amazon Fulfillment European Integrated Service Plan, low-volume inventory fees are waived for plan FNSKUs with fewer than 20 units sold in the past 7 days.
2. Any low-volume inventory fees incurred due to extended warehousing and processing times caused by Amazon or Amazon-managed services will be refunded by the 15th of the following month. For instance, if there is a significant warehousing delay in May, the corresponding fees for that month will be refunded by June 15th.
3. For Prime Day 2024, Amazon will offer a temporary reduction in low-volume inventory fees for products in Prime-exclusive flash sales and Prime-exclusive BD products. This reduction will be in effect for four weeks from Prime Day.
*This will replace the current exemption for FBA Europe FNSKUs that have sold an average of fewer than 5 units per week over the past 30 days in the German, French, Italian, and Spanish marketplaces.
Amazon Europe has recently introduced return handling fees
In early May, Amazon announced the return rate thresholds and return handling fee standards for various categories on the US site. Returned goods that exceed the threshold face a handling fee of at least approximately $2 per item. The larger the product size, the higher the fee, which caused quite a stir in the industry.
At the time, the only consolation was that this fee was only applicable to the US site. However, the relief was short-lived. Starting October 1st, Amazon will also charge return handling fees on European sites.
According to Amazon’s backend information, starting from October 1, 2024, Amazon will impose return handling fees on high return rate items in all categories except clothing and shoes. The first round of fees will be initiated between January 7 and 15, 2025.
The return rate algorithm is the same as the US site. For example, for goods shipped in October 2024, the return rate is the percentage of returned goods in October, November, and December 2024.
For goods shipped in a given month, Amazon will charge for each returned item that exceeds the return rate threshold of the product category.
For instance, if a seller ships 1,000 items in October and 120 are returned in October, November, and December, the actual return rate is 12%. If the return rate threshold for that category is 10%, the seller will have to pay handling fees for the 20 returned items that exceed the threshold.
The return handling fee for the European site applies to sites such as the UK, Germany, France, Italy, and Spain, and does not apply to orders distributed in the Netherlands, Sweden, Poland, and Belgium.
Scope of application:
1. All returned items in clothing and footwear categories;
2. Products with a return rate higher than a specific threshold, excluding clothing and footwear;
Exemptions:
1. When the number of goods distributed in a month is less than 25, no payment is required.
2. For sellers registered in the Amazon Logistics New Product Warehousing Discount Plan, Amazon will waive the return handling fee for up to 20 items per qualifying parent ASIN.
Fee standards:
1. The return rate threshold for each category will be announced on October 1, 2024 (European time);
2. For clothing and footwear products, a return handling fee must be paid for each item returned by a customer;
3. For products other than clothing and footwear, the applicable rate will be determined by the size grade for products exceeding the return rate threshold.
Whether it’s the new round of fee standards or the frequently changing FBA policies, both pose greater challenges for sellers preparing for the peak season. Sellers need to quickly adapt to changes, adjust strategies in a timely manner, and fully prepare for the upcoming Prime Day promotion.
28 May, 2024
