There’s a huge amount of press in this weekends papers regarding next week’s Selling on Amazon Referral Fee increases across Europe. Some of the headlines are:
Daily Mail
The Times
Rivals poised to pounce after Amazon raises fees
The Telegraph
Amazon facing trader backlash after raising fees by up to 70pc
The Independent
Traders on Amazon platform rebel against massive jump in fees
and
Stop moaning, Amazon traders, you can always find another marketplace
The reaction appears to be exactly the reverse of the situation we’ve seen in the past when it was eBay hiking selling fees, previously we’ve seen sellers threatening to leave eBay in favour of Amazon. Now it’s Amazon traders who are looking at their selling costs and for once eBay fees are not only looking attractive, but are looking cheap and value for money!
The big difference of course is that eBay doesn’t compete with their sellers, whilst on eBay it’s supposed to be a level playing field and if fees increase for one seller they increase for all, on Amazon retailers also have to compete with Amazon themselves. You can’t simply increase your sell price on Amazon to balance out the fee increase if Amazon also stock the same merchandise as you.
Amazon also have a price parity policy which means if you offer a product on Amazon it can’t be more expensive than on your own website and must match the lowest price you offer the product for on other marketplaces. If Amazon fees rise and you wish to increase your sell price on Amazon to offset the fee rise then you have to increase your prices on other marketplaces too.
Many of the press articles include retailers (who have asked to remain anonymous) saying that they’ll scale back their operations on Amazon in favour of eBay, Play.com and their own websites. Whether this is all talk or if retailers really will take action remains to be seen but monitor your competition on Amazon closely next week to take advantage of any changes in price strategy or gaps in your competitors inventory on the platform.
One thing is for sure, despite the referral fee hikes Amazon can’t take up all the slack if retailers vote with their feet and if you’re not listing on Amazon the chances are that some of your competitors will be.
10 Responses
Daily Mail quote “Any business selling more than 35 items a month now faces fees of £28.75. On rival website eBay, however, sellers can list up to 50 items a month free and pay a flat 10 per cent when an item is sold.”. I’m assuming that refers to new shop fees, where there is also a monthly fee.
Will next week’s article about Ebay’s fee increase say “It is now considerably higher to list an item for sale on Ebay where it is totally free on Amazon to list for as long as you like”.?
They don’t like facts getting in the way of their story, do they?
Also, it’s “IndependEnt”.
Price increases will hit sellers big time. Most sellers were already working with 5% mark-ups this days. We bumped the prices up yesterday morning to bring it to level with the new Amazon fee structure. Guess what !!! Sales went down by 90%. And today has been death for us. We will possibly close the business down. The problem with selling at eBay was already high fees. It is not only eBay fees you have to consider Paypal fees on top as well. So if I spit up it is my moustache, if I spit down it is my beard 🙁
It will be interesting to see over time how sellers actually respond to this move by Amazon.
It will also be interesting to monitor Amazon’s next moves – for example, are they doing this as a way of removing certain types of seller or are they pulling back from the marketplace model in favour of something else?
Maybe its an experiment to test the elasticity of their fees – at what point do marketplace sellers turn anger and words into action by voting with their feet? (I personally thought the fees were unrealistic BEFORE the announced increase!)
In many cases, I find the way Amazon treat their marketplace sellers is abhorrent and they use the old ‘in the name of customer service’ as their reasoning…. lets see if this latest move galvanises any seller action… I for one will be keeping a ken eye on the reactions on both sides of the fence.
Do these fee increases effect all sellers or only specific categories?
what about dvd and cd ?
How it is the National Press have given this so much coverage?
Would it be cynical to suggest that another marketplace may have ensured the information found its way into the inboxes of news editors.
And Amazon have a Price Parity condition as well !??!