By: Steven Pope, CEO of My Amazon Guy
July 7, 2024 — Amazon sellers are feeling the squeeze as the e-commerce giant continues to increase fees, pulling in a staggering $140 billion annually. Steven Pope, owner and founder of My Amazon Guy, A 20m Amazon Agency, recently highlighted the growing financial burden on sellers in a LinkedIn post.
Photo from Steven Pope’s LinkedIn post. My Amazon Guy Agency
The post highlights the significant financial burden sellers face with Amazon’s growing list of fees. According to Pope, Amazon collects a staggering $140 billion annually from these fees. These charges include:
- Low Inventory Fees: Sellers are penalized for not keeping enough stock.
- Inbound Placement Service Fees: Additional costs incurred when using Amazon’s product placement service.
- FBA Fulfillment Fee Increases: The core fulfillment service by Amazon has seen a rise in costs.
- Inbound Defect Fee: Products arriving at Amazon warehouses in a damaged state incur this fee.
- Ships in Product Packaging Program: Sellers using this program now face additional charges.
- Prep Service Fees: Costs associated with prepping products for Amazon fulfillment have gone up.
- Removal/Disposal Fees: Getting rid of unwanted inventory comes at a price.
- Returns Processing Fee: Amazon charges a fee to handle returned products.
- Storage Utilization Fee: Sellers with high storage needs face this additional cost.
- High Return Fees: Products with a high return rate incur a penalty.
- Package tier adjustments: Even basic packaging options may now come with fees.
What Can Sellers Do?
1. Cost Analysis: Sellers should meticulously calculate their product costs, including Amazon fees, to ensure profitability.
2. Optimize Listings: Improving product listings with high-quality images, compelling descriptions, and relevant keywords can help drive sales and potentially offset some fee costs.
3. Negotiate with Suppliers: Negotiating lower product costs from suppliers can help compensate for rising Amazon fees.
4. Consider Alternative Fulfillment Options: Explore fulfillment options outside of Amazon’s FBA service to see if cost savings are possible.
5. Diversify Sales Channels: Selling on other platforms can reduce dependence on Amazon and potentially lead to higher profits.
A Call for Fairness and Transparency in E-commerce
Amazon, renowned as a launchpad for sellers, is signaling a potential shift with its upcoming discount store aimed at competitors like Temu and Shein. This move, led by Jeff Bezos, will feature low-priced, unbranded items shipped directly from China, sparking concerns about counterfeit products and safety among sellers. Coupled with recent fee hikes, these developments suggest Amazon may be redefining its approach, potentially entering a new phase in its seller relations.
The streamlined shipping from China to U.S. consumers in nine to eleven days aims to appeal to budget-conscious shoppers but has raised anxieties among U.S.-based sellers about market share and profitability. As Amazon continues to evolve, maintaining a balance between bolstering its seller community and expanding its retail offerings will be crucial for sustaining its dominance in e-commerce.
If you want to optimize your AMZ journey, feel free to connect with My Amazon Guy. Our team of experts is dedicated to helping sellers navigate the complexities of the Amazon marketplace. We offer personalized strategies and insights to enhance your listings, manage your fees, and ultimately boost your sales performance. Reach out to us for tailored advice and support in achieving your Amazon business goals.
More About My Amazon Guy
Struggling to be seen on Amazon? Feeling lost in the e-commerce jungle? Well, fret no more!
This powerhouse agency isn’t just another pretty face (well, okay, their client’s product listings might be, thanks to their design expertise). They’re a full-service crew with a proven track record of pulling in a cool $20 million (that’s a lot of happy Amazon sellers!).
Here’s the deal: They know Amazon like the back of their hand. From navigating fees to optimizing listings to skyrocketing sales, they’ve got the magic formula. They don’t just tell you what to do, they become your partner in Amazon domination (world domination not included, but hey, who knows what the future holds?).
But wait, there’s more! My Amazon Guy isn’t just about them, it’s about you too. That’s why they created MAG School, your one-stop shop for becoming an Amazon whiz. From SEO secrets to PPC mastery, they’ll equip you with the knowledge and skills to become a legend in the Amazon marketplace.
So, ditch the confusion and join the My Amazon Guy fam. They’ll help you unleash your inner Amazon rockstar, and hey, who knows, maybe you’ll be the next million-dollar seller – with shades, of course.
About the author:
Steven Pope, CEO of My Amazon Guy
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pr@myamazonguy.com or call +14706231951
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