Periodically a new Amazon fee discount program will launch to encourage sellers to add product listings in strategic categories. These promotions generally give you a commission discount in exchange for offering products in a category below a certain price. Any new product priced near the threshold should be lowered to benefit from the Amazon fee discount. Two of these fee discount promotions have popped up recently and I want to share them with you:
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“Get a referral fee discount on eligible grocery products”
This promotion was just launched on 4/26/18 and is good through 10/14/18. Here’s Amazon’s blurb and then I’ll give you the financial breakeven analysis: For a limited time (until October 14, 2018) you can take advantage of a referral fee discount on all Grocery & Gourmet products priced at or below $15. Amazon has lowered its referral fees from 15% to 8%, earning you 7% back to reinvest in your business. You can find which products are eligible in your selection by checking the Fee Preview column on the Manage Inventory page. This is a sweet deal if you sell any products that fall under the Grocery/Gourmet Category! These could be:
- Cold Beverages, Warm Beverages, Snacks, Breakfast, Candy & Chocolate, Cooking Staples, Baking, Baby Food or Flowers & Plants
Here’s the breakeven analysis:
Stated simply: If you are currently priced anywhere between $15.01-16.25 you should consider lowering your price to $15.00. This will allow you to take advantage of the Amazon fee discount program driving volume and gross margin. This would be a great time to launch new products in this category because you can afford to spend more on advertising and get traction more quickly.
“Get a Fee Discount for adding ASINs priced $7 and below”
This second Amazon fee discount program was launched on 4/10/18 and is good for NEW low-priced ASINs added before 8/15/18. Here’s Amazon’s lengthy blurb and then I’ll give you breakeven analysis again.
Dear Seller, We are offering you a referral fee discount to help you add low-priced selection that is not available on Amazon.com. To be eligible for this promotion, ASINs must fulfill the following criteria:
- The total sales price is $7 or below. The total sales price includes the item price and any shipping or giftwrap charges.
- You have created the ASIN between April 10, 2018 (PST) and August 15, 2018 (PST)1.
- The item is not listed in Grocery or Media categories.
For items with a total price of $3.50 and below, you will get a discount of $0.50 on the referral fee. Items with a total sales price of $3.51 to $7.00, you will get a discount of $0.30 on the referral fee. For example, on categories that have a $1 minimum fee, you will pay a fee of $0.50 on eligible ASINs priced $3.50 and below, and a fee of $0.70 on eligible ASINs priced between $3.51 to $7. See below for more examples of how to calculate your fee in GLs for eligible items with a 15% referral fee and a $1 minimum fee.
- When the total sales price is $1.00, the current fee would be $1.00, and the discounted fee will be $0.50, a savings of 50%.
- When the total sales price is $3.50, the current fee would be $1.00, and the discounted fee will be $0.50, a savings of 50%.
- When the total sales price is $5.00, the current fee would be $1.00, and the discounted fee will be $0.70, a savings of 30%.
- When the total sales price is $7.00, the current fee would be $1.00, and the discounted fee will be $0.70, a savings of 30%.
You will get a discount on qualifying sales through June 15, 2019 (PST). The discount will be applicable to sales within 7 days after you list an eligible item.1 To add new offers, visit the Manage Inventory (https://sellercentral.amazon.com/inventory) page in Seller Central. Thank you for selling on Amazon, Amazon wants to give you a small raise on all new items priced below $7.00 but you should only look to lower your price if you are about to launch an item with a total between the following ranges:
- $7.01-7.30 – If your product would have been priced in this range drop your price to $7.00 and you’ll come out better given Amazon’s discount while driving more volume.
- $3.51-4.00 – If your product would have been priced in this range drop your price to $3.50 and you’ll come out better given Amazon’s discount while driving more volume.
I hope this helps you navigate these 2 new Amazon fee discount programs!
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