Amazon hike Kindle accessory fees to 40.25%

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Amazon is a great place to sell for merchants but perhaps not so if you’re in the business of selling Kindle accessories. They’ve just increased the selling fees from 8.05% (7% plus 15% VAT) to a whopping 40.25% (35% plus 15% VAT). This means Kindle accessories will from the 15th of October attract the highest selling fees on Amazon, previously it was Jewellery with 28.75% selling fees.

This is in anyone’s book a massive price hike, I don’t know too many sellers who can handle a 32% increase in selling fees without it severely impacting their profit margins, if indeed it leaves any profit to be made at all. Sellers will already have ordered stock for Christmas and to impose this sort of cost hike is likely to leave some sellers with unsaleable stock.

I have to say this is a reflection on the disadvantage of selling on Amazon. Amazon are a retailer in their own right and this price hike won’t affect them – they’ll still be able to sell their own Kindle accessories at the same margins as prior to the merchant selling fee increase. The price rise may be a ploy to decrease the attractiveness of third party Kindle accessories in comparison to genuine Amazon accessories, or it may be simply because Amazon perceive the products are high margin and so the market can stand the cost. I don’t know the answer to this, but I do sympathise with the affected sellers who are now faced with limited choices.

The best advice to those sellers with large inventories of Kindle accessories is bizarrely to sell them on eBay. Whilst there have been many legitimate complaints about eBay’s last fee rises you can be confident that at least eBay don’t compete with you as they’re not a retailer. eBay may shaft you with a fee increase but at least they shaft all sellers equally leaving a level playing field.

If you’re selling Kindle accessories you need to reassess your selling strategy immediately. There’s just 43 days left until the new Amazon selling fees come into effect, and if your inventory is sitting in FBA stock you will also need to factor in FBA fees on top of Amazon’s selling fees.

The full Amazon announcement

We are writing to let you know about the launch of the Kindle Accessories category on the Amazon.co.uk, Amazon.de, Amazon.es, Amazon.fr, and Amazon.it Marketplaces. Accessory products with “Kindle” in the product title or product description, or that are listed for use with or compatible with Kindle, should be categorised as Kindle Accessories. Listings will be automatically moved to the correct product category beginning 15 October, 2012. The referral fee will be 35% and will be effective beginning 15 October, 2012

10 Responses

  1. “eBay may shaft you with a fee increase but at least they shaft all sellers equally leaving a level playing field.”

    Really? Come on Chris, this is simply not true and has not been true for a long time.

    Proof? Tilenius (at the time Senior Vice President & General Manager, eBay North America)in an interview with Internet Retailer Feb 2009,stated Diamond sellers pay no insertion fees and ‘negotiated’ final value fees.

  2. I think what they are trying to do is stifle low priced items which obviously affect their sales. For example, kindle 4 generic light cases are selling for about £5 as opposed to Amazons case. So they must be feeling the pinch.

    Besides that, they may also be trying weed out the low quality goods. At 40% commission, sellers will be forced to sell at higher prices and customers don’t want low quality goods for high prices, hence they will have to provide value for money, and the only way I see that happening is if sellers start providing good quality items.

    My 2 pence.

  3. Elsewhere on Tamebay there is the current discussion of ebid and the profitability of selling on it. Chris D. suggests that this increase in Amazon Selling Fees for Kindle products might make ebay attractive(is there anything that would make selling on ebay attractive?).

    But surely these fee increases will make ebid even more attractive. Just think of it ebid being the natural Fee Free supplier for accessories for Amazons kindle. Perhaps its something like this that will bring ebid to the attention of the masses of e buyers?

  4. Your not the only one to have said this or similar. But think about it. 40.25% Fees on Amazon. Now I hope that ebooks end up as a flash in the pan-after all I sell Paper Books so would much rather everybody has a conventional Bookcase at home filled with much loved paper books.

    But if ebooks such as Kindle become the replacement for paper books(hope it doesn’t) then the buyers of Kindle will want accessories. If they are far too expensive on Amazon because of the fees then hopefully they will buy their Kindle from Amazon and their accessories from ebid. A bit like thousands of Car Buyers buy their cars from the local dealer and their accessories from Halfords.

  5. The difference between eBay and amazon is that eBay is a business partner and amazon is alike an ex-girlfriend after a bad break up – you can’t trust them and they become unpredictable and capable on anything; will think nothing of shafting and betraying you

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