- On November 15, 2016
- 5 Comments
- policy update
Amazon is making some changes to how merchants sell media starting March 1, 2017. On November 9, Amazon sent an email announcing three new changes. Let’s take a look at these changes and what they could mean for your business.
1. You Can Set Your Own Shipping Rates
1. Sellers will be able to offer free shipping and set their own shipping prices on the Books, Music, Video, and DVD categories.
Effective March 1, 2017, you will be able to set your own shipping prices for standard delivery and set different shipping prices by region for expedited, two-day, or international delivery. Your current shipping settings and shipping prices will be retained when the new capability launches on March 1. Beginning on that date, you can adjust your shipping prices for Books, Music, Video, and DVD products using Shipping Settings.
For example, if you wanted to sell a book with standard domestic shipping, the rate was fixed at $3.99 before the updated shipping rates. With this new change, there is no reason to have separate shipping costs. This means a more streamlined shopping experience for buyers with easier price comparison.
2. You Can Now Compete for the Buy Box
2. Sellers will be able to compete for the Buy Box for Books in new condition.
Starting in late Q1 2017, eligible sellers will be able to compete for the Buy Box for Books in new condition. The Buy Box is the display on the product detail page with the Add to Cart button that customers can use to add items into their shopping carts. When one of your listed items appears as the default on the product detail page, you win the Buy Box, which can increase your chances of selling that item. To compete for the Buy Box, both your selling account and your listed item must be eligible. Becoming eligible to compete for the Buy Box doesn’t guarantee that you will win it (https://sellercentral.amazon.com/gp/help/200418100). You can increase your chances by pricing your items competitively, offering Prime and free shipping, providing great customer service, and keeping stock available (https://sellercentral.amazon.com/gp/help/201687550).
Amazon offers you an incentive to provide free shipping. Amazon is giving sellers the chance to compete—presumably with them—for the Buy Box. This could be an opportunity to increase sales, but it’s hard to say how hard it will be to win the Buy bBox for Books.
3. Amazon is Raising Its Fees on Media
3. Changes to Selling on Amazon fees.
Amazon will be making two changes to how its fees are charged for Media products (including Books, Music, Video, DVD, Software, and Video Games). These fee changes will not take effect until March 1, 2017, to give you time to plan accordingly.
1) Variable Closing Fees (VCF): The VCF charge in Media product categories (Books, Music, Video, DVD, Software, and Video Games) will increase to $1.80 from $1.35 per item. This charge will appear as a Closing Fee (CF) instead of as a VCF to avoid confusion, as it will be a fixed fee rate and not variable.
2) Referral fees: Currently, the referral fee for Media products is an applicable percentage of an item’s sales price (excluding any shipping or gift wrap charges). Effective March 1, 2017, the referral fee will instead be calculated on the total sales price (the total amount paid by the customer, including the item price and any shipping or gift wrap charges), as follows:
- Books, Music, Video, DVD, Software, Video Games (non-console): VCF – $1.35 per item; referral fee – 15% of the item price
- Video Game Consoles: VCF – $1.35 per item; referral fee – 8% of the item price
- Books, Music, Video, DVD, Software, Video Games (non-console): CF – $1.80 per item; referral fee – 15% of the total sales price
- Video Game Consoles: CF – $1.80 per item; referral fee – 8% of the total sales price
For additional information on Selling Fees, please see the Selling on Amazon Fee Schedule, https://sellercentral.amazon.com/gp/help/200336920
This change is a $1.05 increase in fees for booksellers, regardless of price. For example, if you previously sold a book for $0.01 + $3.99 shipping, your fee would be $1.35. There was no additional percentage on top of the base $1.35 because referral fees did not include shipping. Beginning in March, the fee will be $2.40. This new fee structure means the end of penny books, and that the cost of used books with have to rise to maintain current profitability.
What Does This Mean For Everyone?
- For publishers, more expensive used books could drive more customers toward buying new copies and increasing sales.
- For merchants selling new books, there is a new opportunity to compete with Amazon and publishers for the buy box.
- For Amazon, this is a huge win because they are making $1.05 more on every used book sold.
- For used book sellers, this change hurts. Margins are razor thin as it is, and this makes selling even more expensive for them.
- For other platforms that sell used books, they’re rejoicing that it will be cheaper to sell on their own platforms compared to Amazon in a few months.
- For consumers, used book prices will be rising by at least $1.05, but more free shipping means simpler price comparison.
What do you think of the new updates? Let us know in the comments below.