Amazon Discontinues Small and Light Program, Introduces Low-Price FBA Fees
Introduction
Amazon’s Small and Light program has been a popular choice for FBA sellers offering low-cost, lightweight products. The program provided discounted shipping, storage, and fulfillment rates, enabling sellers to compete effectively in the e-commerce market. However, Amazon has recently announced the discontinuation of the Small and Light program and introduced a new Low-Price FBA fee structure in its place. This article will explore the details of the Amazon Small and Light program, Low-Price FBA fees, the implications of this change, and provide strategies for sellers to adapt their businesses.
Amazon is set to introduce Low-Price FBA rates as a replacement for the Small and Light program, which will continue to reduce the standard FBA rates for all low-priced items while maintaining the fast FBA delivery speeds that customers appreciate.
In essence, if you offer low-priced products on Amazon, your items will have identical shipping times as higher-priced goods. Under the Small and Light program, you enjoyed lower FBA fees, but your products also had slower shipping times to your customers.
Why did Amazon Introduce the Small and Light Program?
Amazon’s goal was to become an everything store with highly competitive prices. However, the various fees charged by Amazon made it challenging for sellers to maintain profitability when selling products at low price points. To address this issue and encourage sellers to offer items at prices competitive with brick-and-mortar retail stores and other online marketplaces, Amazon introduced the Small and Light program.
The Small and Light program was designed to motivate sellers by providing lower FBA fees for qualifying products. By reducing the cost of fulfillment for small, lightweight, and inexpensive items, Amazon aimed to create an environment where sellers could profitably sell these products while maintaining attractive pricing for customers. This initiative demonstrated Amazon’s commitment to supporting its sellers and ensuring that the platform remained competitive across a wide range of product categories and price points.
Let’s take a look at an item that we could sell for about $9, with a buying cost of $3. If we don’t use Small and Light, our profit would be just $1.20, resulting in a 40% return on investment (ROI). However, by choosing Small and Light, our profit more than doubles to $2.55, providing a more attractive 85% ROI.
Ultimately, the introduction of the Small and Light program was a strategic move by Amazon to expand its product offerings, attract more sellers, and solidify its position as a leading online marketplace known for its vast selection and competitive prices.
The End of Amazon's Small and Light Program
Amazon has made the decision to discontinue the Small and Light program, which provided benefits to sellers offering products priced under $10 and weighing less than 10 oz. The program offered discounted fulfillment fees, faster delivery times, and increased product visibility. The discontinuation of the program is part of Amazon’s effort to streamline its fee structure and account for the handling costs associated with these products.
Introducing Low-Price FBA Fees
In place of the Small and Light program, Amazon has introduced the Low-Price FBA fee structure. Products priced under $10 will automatically receive Low-Price FBA rates, which are $0.77 less than standard FBA rates. These rates come with the same delivery speeds as standard FBA, including free shipping for Prime customers and standard shipping for non-Prime customers.
Product Eligibility and Shipping Requirements
All products priced under $10 are eligible for Low-Price FBA rates, and no action is required from sellers. Low-Price FBA uses the standard FBA packaging and prep requirements, ensuring a seamless transition for sellers.
Low-Price FBA Fee Structure
The Low-Price FBA fee structure includes reduced fulfillment fees compared to standard FBA rates. Tables in the provided information outline the new fees for various size tiers and shipping weights, both for non-apparel and apparel products. It’s important to note that all other standard Selling on Amazon fees and FBA fees still apply.
Implications for Amazon Small and Light Sellers
Sellers who previously benefited from the Small and Light program may experience changes in their fulfillment costs under the new Low-Price FBA fee structure. It is crucial for sellers to review their product pricing and shipping strategies to ensure profitability. Closely monitoring the impact of the new fees on margins will be essential for making informed business decisions.
Adapting to the Low-Price FBA Fee Structure
To navigate the transition from the Small and Light program to the Low-Price FBA fees, sellers can consider the following strategies:
1. Review product pricing and adjust as necessary to maintain profitability:
With the introduction of Low-Price FBA fees, sellers should carefully review their product pricing to ensure they remain profitable. In some cases, it may be advantageous to adjust prices to maximize profitability under the new fee structure. For example, selling a product at $9.99 under the Low-Price FBA fees may result in a higher payout compared to selling the same product at $11 under standard FBA fees, due to the reduced fulfillment costs for items priced under $10. This is where tools like Bookz Pro Stock Manager and Repricer can be particularly helpful, allowing sellers to optimize their inventory and pricing strategies in bulk to make the most of the Low-Price FBA fee structure.
2. Optimize product packaging to minimize dimensions and weight:
Sellers can reduce their fulfillment costs by optimizing product packaging. By minimizing the dimensions and weight of their products, sellers can ensure their items fall into the most cost-effective size tiers and shipping weight categories. This can lead to significant savings on fulfillment fees over time.
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Conclusion
Amazon’s decision to end the Small and Light program and introduce Low-Price FBA fees has a big impact on sellers of inexpensive, small items. To succeed in this changing market, sellers must understand the new fees and adapt their strategies accordingly. Staying informed about Amazon’s policies is crucial for maintaining a thriving business on the platform.
Tools like Bookz Pro Stock Manager and Repricer can help sellers manage inventory and pricing in bulk, maximizing the benefits of Low-Price FBA fees and ensuring long-term success. By being flexible and using the right tools, sellers can navigate these changes effectively.
In essence, Amazon’s new Low Price FBA fees mean faster shipping for items under $10, but sellers who used Small and Light will pay $0.30 more per item. While the change benefits customers, sellers now face the choice of raising prices or accepting lower profit margins.
Frequently Asked Questions
What is Amazon small and light?
Amazon Small and Light was a program that offered reduced fulfillment fees for small, lightweight, and inexpensive products, making it more cost-effective for sellers to offer these items to customers.
How to enroll in a small and light Amazon?
As of August 29, 2023, Amazon discontinued the Small and Light program. Enrollment of new products into the program ended after July 17, 2023.
Does Amazon still do small and light?
No, Amazon has announced that they will end the FBA Small and Light program on August 29, 2023, replacing it with new Low-Price FBA rates.
Is FBA small and light worth it?
The Small and Light program was worth it for many sellers as it allowed them to profitably sell low-priced, small, and lightweight items. However, with the program ending, sellers will need to reassess their strategies under the new Low-Price FBA rates. No action required to utilize Low-Price FBA rates.
How do I change my Amazon listing to small and light?
As the Small and Light program is being discontinued, it is no longer possible to change your Amazon listing to Small and Light. Products will automatically be enrolled in the new Low-Price FBA rates if they meet the eligibility criteria and under $10 price point.
What are the requirements for Amazon's small and light program?
The Small and Light program was designed for products priced under $10 and weighing less than 10 oz. However, with the program ending on August 29, 2023, these requirements are no longer relevant. The new Low-Price FBA rates will apply to products priced under $10 and weighing 10 oz or less.
Why did Amazon end the small and light program?
Amazon decided to stop the Small and Light program to make things easier for sellers. The company wanted sellers to be able to send out orders while paying less in FBA fees.
Amazon said they made this change because Small and Light products shipped slower than regular FBA products. They wanted to lower the shipping rates for all items under $10, no matter their size or weight, so customers could get their orders faster.
