Amazon announced it will adjust Marketplace shipping credits and variable closing fees when the Postal Service changes rates March 14:
To reflect these changes, we will increase Marketplace shipping credits for Books, Music, Movies, Video Games and Software, effective May 14th. The increases will range from $0.39 to $2.51 depending upon the product category and shipping method. In addition, we will implement modest increases to the variable closing fees in these product lines.
A full list of the changes compared with today’s rates is set forth in the charts below. Here is a short summary of the changes:
1. The Books, Video Games and Software standard shipping credit will be increased from $3.49 to $3.99.
2. The Music, DVD and VHS standard shipping credit will increase from $2.59 to $2.98.
3. The Books, Video Games and Software variable closing fee will increase from $1.20 to $1.35.
4. The Music, DVD and VHS variable closing fee will be increased from $0.70 to $0.80.
Shipping credit changes:
Domestic Standard
Current: $3.49, New: $3.99
Expedited
Current: $5.99, New $6.99
International
Current: $9.98, New $12.49
Variable closing fee changes:
|
Current |
New |
|
|
Books |
$1.20 |
$1.35 |
If you have questions about these changes, please contact Seller Support by going to our Help pages and clicking “Selling at Amazon.com,” and then “Contact Customer Service.” If you have feedback about these changes, and you do not need a response, please feel free to write to postage-increase-feedback@amazon.com.
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12 Comments
Thanks, Steve, I missed that!
Hope you have a great day!
Well, we recoup some of the postage increase and they take their cut off of the top. It’s a “win win” situation for everyone.
Everyone mails letters and therefore knows about the increase in postage. So I don’t think buyers will even think twice about the increased postage.
International postage gets a nice $2.51 bump as well. If I could just ship to Canada and not other countries, I would certainly do so as the credit would certainly provide extra revenue. Air mail to Canada is relatively inexpensive.
What I don’t get is why Amazon waited for so long. Everytime there is a postage increase, it gives them an opportunity to raise the credit and then raise their closing fee, creating extra revenue. This is found money for them. The executives should do the cha cha everytime there is even a rumor of a postage increase! They’re probably popping the corks right now!
Jim,
Ever had the thought that increased shipping rates drives customers AWAY? . There will be many, many occasions where a customer might have bought the book for $3.49 in postage, but when he finds out it is $3.99, he will change his mind and not order the book at all. Adding 4 bucks to every book you buy is pretty hefty.
Nobody is popping corks at Amazon and neither are we here at the store.
I agree with the previous Anonymous. Although Amazon.com owes us a better deal on shipping credits now that rates have gone up twice, there is nothing to celebrate. Higher shipping charges to customers decreases sales. There’s no doubt about that. I’m glad they raised the credit we get, but this is not good news. If the Postal Service continues these yearly rate changes, at some point we will be in trouble.
Alibris announced it was waiting to see what the rest of the industry does regarding raising shipping credits, so we should expect them to make similar changes.
Also there is the consideration that more and more customers will be lured by the free Amazon super saver shipping and by FBA sellers.
I see a drop in sales in my future. Sigh…
Ohh, watch out for that iceberg. At least, in the international sales. Amazon boosted shipping credits to cover those of us who want to send books Global Priority (which will be changed to International Air Mail), but music and video got a small boost. With the small Global Priority envelopes going bye-bye, we can’t do that anymore. Just think of all those International customers who expect fast delivery and get mad at us for a month plus delivery time. There goes the feedback rates. Not me, I’m opting out of the international sales market!
I respect your thoughts on this, but I do not think this will impact sales domestically in any way, shape or form. Anyone who has ever ordered anything online, from a catalog or over the phone knows there is a shipping charge attached. $3.99 is not excessive. That’s a pretty good deal actually.
The super saver shipping difference is an issue, but this is for items $25 and higher. This was an issue prior to the rate increase as well. Adjust the prices down by 50 cents and know you’ll be making most of it up on the shipping credit.
For a seller like myself whose “bread and butter” are books that sell for $9 to $18, it’s business as usual.
As far as driving customers AWAY, Amazon’s stock is up $10 (yes $10) today alone on strong earnings. Customers are flocking to the Amazon. They are not only popping the corks over there, but eating cavier as well! People will continue to buy online more and more. I would recommend buying some Amazon stock, I certainly am. If all the sellers would reinvest into buying the company stock, then we enjoy the profits and we also have a voice as owners.
The union idea that has been floated would actually be legitimate if we all started buying into the company.
I will concede that international sellers will have to probably pay alot more for shipping anything that cannot fit in a global priority mailer. Sellers will have to just sell them domestically or raise the prices to cover the difference on international shipping. But the cause of this is not Amazon, it’s the post office. With Surface mail no longer available, it changes the landscape of business beyond Amazon. Anyone who owns a brick and mortar shop now has to adjust for this as well. Amazon added $2.51 onto the shipping credit which is significant. Brick and Mortar gets nothing.
The $3.99 Shipping Charge will not scare customers away.Those customer who have or still buy from Amazon have been paying $3.99 for awhile now.
What we are seeing is the end of the ma and pa 3p sellers.
What I believe Amazon is heading towards is as follows.
1. Megasellers/Corporations with 100 k + listings will be allowed to be 3p sellers. Or..
2. Those who participate in the FBA program can sell as 3p.
Amazon is realising that by creating a marketplace with thousands of sellers, it is actually hurting them. The arguemnet could be, that they make x amount everytime we sell something.
But the truth is, they lose X amount when a 3p seller undercuts them and they are stuck with a wharehouse full of books.
The question I see most 3p seller never ask is “what happens when Amazon sells”?
what is a “3P” seller?
ja_books said:
But the truth is, they lose X amount when a 3p seller undercuts them and they are stuck with a wharehouse full of books.
I disagree with this. There’s very low overhead, from Amazon’s perspective, from third-party sales–just normal web site maintenance, billing and invoicing, and minimal customer service. And Amazon doesn’t get stuck with a warehouse full of unsold books regardless–ask any published author. Barnes and Noble and Borders negotiate sweetheart deals with publishers to return unsold books. Amazon is big enough that they are in position to make a similar arrangement.
Amazon’s big selling points have always been low prices (they have the reputation, whether it’s deserved or not) and being able to find virtually any book you want, in print or not. Third-party sellers help both things immensely.
Amazon’s new-book sales, particularly bestsellers, are a loss leader. Used book sales have the same effect, but without Amazon actually losing much, if anything.
Amazon didn’t become profitable until the same quarter when it started allowing third-party sellers. It’s not a coincidence.
In regards to Amazon raising the shipping fees and losing customers…in my area gas is around $3.43 to 3.63 per gallon (and going up, up, up). I think about how far I could travel with ONE gallon of gas and somehow the shipping rate of $3.99 doesn’t seem so far out of line!
There is an excel sheet that you can download that helps calculate selling prices on Amazon's marketplace by margin dollars or gross profit percentage.