It’s confirmed that Amazon are doubling the minimum order value to qualify for free Super Saver Delivery from £10 to £20 in the UK.
Many Amazon customers who aren’t in a hurry to receive their items have enjoyed Super Saver Delivery for free. Up until July 2013 there was no order restrictions but then Amazon introduced a minimum order value of £10.00. We heard rumours this afternoon that this was to be doubled to £20 and Amazon have just started rolling the new minimum order limit on their site.
Currently the only indication of the price hike is on the Shopping Basket page where there’s a message for a £13.40 item that you’ll need to add another £6.60 to qualify for free delivery. If you complete checkout you can still qualify for free delivery for orders between £10 and £20, but we expect that to end some time this evening no longer select Super Saver delivery for orders under £20.
We also expect Amazon to update the Super Saver Help Page to reflect the new £10 minimum order value.
Of course you can still order items with a total value of under £20, you just won’t be able to receive free delivery on them. This means for FBA sellers your customers who previously purchased £10-£20 items with free carriage will no longer be able to do so. They’ll either have to pay for delivery, sign up for Amazon Prime, or add additional items to their basket in order to receive free delivery.
Add-on Items
We’ll be watching the help page for Amazon Add-On Items which up until now has also had a minimum total order value of at least £10 of eligible products. Whilst we’ve heard nothing to suggest that this limit may increase, it’s possible that Amazon could also hike this to a minimum order value of £20 and this would seriously impact sellers of low value items.
Why are Amazon hiking Super Saver minimum order value to £20?
Amazon traditionally haven’t worried about profits, preferring instead to concentrate on growth. However sooner or later they have to become a profitable company and it’s likely that it’s simply unsustainable to offer free delivery on low value items (or more precisely on low value order values).
Amazon have been a leader in online retailing and pretty much the entire industry have followed their headlong rush to offer free delivery. Reining back their Super Saver free delivery program could be one of the first indicators that free delivery across the board will become a thing of the past, at least for low value orders where it forms a large part of a retailers total order cost.
How do you think this will affect your business on Amazon? Do you sell low value items shipped with Amazon FBA and will you consider pulling sub £20 items and fulfilling them yourself instead of using FBA?
8 Responses
It will be interesting to find out how it affects prime customers, will they also have to spend £20 to use their prime service?
I sell many low value items and provide free RM48 delivery, so it could help me if FBA sellers of similar items pull their stock from Amazon, but if prime customers are unnaffected then it might encourage people to sign up to prime, which could be bad for me as we do not use FBA.
Prime customers tend to buy only prime eligable products so it really depends what happens to prime customers minimum spends.
When an FBA sales person phoned me earlier in the year they were telling me that Amazon was looking at way to try and reduce the cost of FBA for low cost products to make it more viable for sellers, but this move in minimum spend contradicts this if prime minimum spend is affected.
There are several aspects to this. It is possible it is a ground breaker benefiting many sellers, or it could be a doomed strategy.
1 It might encourage me to sell more on Amazon
2. It calls into question the ethics of Amazon as a business. Try to recall if you can the 70s and 80s when many countries shipped to Europe and sold below cost to gain currency, sell unwanted stock/finance economies of scale and build market share, at the same time damaging and destroying the indigenous businesses. This was viewed as unfair trade and tariff barriers were put in place to stop this from happening in both the EU and USA.
What Amazon has done over recent years is exactly the same. Free supersaver wasn’t a short term promotional offer but a long term strategy to build market share in a way other business weren’t big enough to compete with, in other words unfair trade, tantamount to dumping under cost. As you say Amazon haven’t been worried about profits as they have done this.
But have they now let the cat out of the bag in a way which will benefit many online sellers? It will now call in to question eBay’s efforts to make sellers offer a free option, and may be sufficient to start a move away from free delivery in ecommerce generally. It maybe that it will allow higher margins for all, and may encourage many more Prime type service offerings from other sellers.
It is also possible they have timed it for now because they believe ebay is weak, struggling to perform, and therefore not able to aggressively compete with their moves.
Strangely this seems to have been rolled back this morning and orders between £10 and £20 are once again eligible for Super Saver delivery!
Amazon appear either to be indecisive or having tech problems rolling out the change.
Maybe the impact of the super saver minimum spend increase on sales was so immediate that the Amazon system recovery panic button was pushed?
Pros and cons for my business as an FBA and FBM seller.
FBA is great for sales but the price is smaller margins (mostly) per sale. I would prefer to grow FBM sales so I think this can only help when my £10 offer (with or without free shipping) competes with a £10 FBA offer.
Last year I was told I had to offer free shipping as sellers expect this as the norm. This year I hear many sellers are rowing back. Every business will have their viewpoint from their own experience (ranking, +/- sales, profitability) but I’ve recently decided to do what I think works and not what the marketplaces tell me works.
Just had an email from Amazon about this. The £20 order requirement will apply to Add On items too, but they will keep the £10.00 minimum order for books.
Dear FBA Seller,
As you know, millions of customers who shop on Amazon.co.uk for products offered through Fulfilment by Amazon benefit from FREE Super Saver Delivery and unlimited One-Day Delivery at no extra cost with Amazon Prime.
FREE Super Saver Delivery help page:
https://www.amazon.co.uk/gp/help/customer/display.html/ref=help_search_1-2?ie=UTF8&nodeId=1204872
We are contacting you today to let you know that our Super Saver Delivery service is changing. From May 1 2015, orders including £10 or more of books qualify for FREE Super Saver Delivery. All orders of £20 or more in any product category also qualify for FREE Super Saver Delivery. Previously, a £10 threshold applied for all orders to qualify for FREE Super Saver Delivery. This change does not affect Amazon Prime which continues to provide members with unlimited One-Day Delivery at no additional charge.
In line with the above change, Add-on items are now eligible for free delivery with FREE Super Saver Delivery and Amazon Prime on qualifying orders of £20 or more. The Add-on programme allows Amazon and Fulfilment by Amazon Sellers to offer thousands of low-priced items that would otherwise be cost-prohibitive to dispatch individually.
Please review our FBA Inbound Inventory Removals policy update for further information:
https://images-na.ssl-images-amazon.com/images/G/02/FBA/FBA_Inbounded_Inventory_Removal_Policy.pdf
We are committed to helping you grow your business via the Fulfilment by Amazon programme, enabling you to attract more Amazon customers through various services including FREE Super Saver Delivery, Amazon Prime and export options in the EU.
Thank you for selling on Amazon and using Fulfilment by Amazon.
Yours faithfully,
Amazon Services Europe