Amazon news from December 2019
Here’s last month’s roundup of Amazon articles and news that I sent to email subscribers.
1. Amazon FBA fee increase Feb 18, 2020
This was expected.
The more Amazon pushes 1-day prime, the cost will be passed on to the seller.
At the moment, the price increase is for US FBA and referral charges.
If you look at my table below, 3 shipping weight classes go up the most.
- Small standard goes from $2.48 to $2.63
- Large standard goes from $3.28 to $3.48
- Medium oversize goes from $9.79 to $11.37
The biggest losing category is if you sell medium oversize products. Small or large oversize classes stay the same.
If you are stuck in the medium oversize class, consider reducing the size or bundling up to get into the large oversize for no increase in prices.
In any case, the increase in fees and charges was expected. Keep expecting it in 2021 and 2022. As the Amazon logistics network grows, so will the fees.
I see this as another sign to go after quality products that have a premium. The last thing to do is compete on price where your margins can be eroded even quicker.
Knowing how to calculate and keep track of your profit margins is vital.
My team and I continually tweak and adjust variables in our cost analysis spreadsheet (also available in the Business PRO spreadsheet package) to analyze our products and make decisions on what to push and what to discontinue.
By keeping ahead of costs rises and reviewing our numbers constantly, we’ve found ways to cut costs by 5-10%, which offsets the increase in fees.
Unless the product can be used as a loss leader or combined with something else to recoup the margins, it is on the chopping block.
2. Amazon Japan?
This report shows that Amazon is hitting record sales in Japan and paying over $270M in taxes – which is a good sign.
Rumor is that Amazon is trying to tap into other business areas, just as they have been doing in the US for the past decade. My takeaway is that the investments they are making in Japan is a great sign for sellers already selling in Japan, and for those wanting to test it out.
It’s not as big as the US or the entire EU, but it could be very fruitful if you have expertise with international marketplaces.
As I’ve lost money and failed in our UK Amazon sales, I doubt I will try Japan until our cash cushion becomes much larger or I can dedicate someone to managing international markets as closely as we do for the US.
The language barrier prevents most people from entering and cultural differences also make it tougher. But if you are willing to crack it, it’s there waiting.
3. Speeding up FBA processe and My podcast interview on how I wasted $70k
I’ve been posting more articles, but haven’t been notifying you guys with the latest one as they are mainly tutorials and catching up documentation.
A recent one goes over 5 ways you can supercharge your operations for the new year.
I did an interview a while back with Andrew Erickson who is an Amazon seller, a user of Gorilla ROI and also hosts the Zon Con Podcast.
I discussed our framework of how we approach product development, and how I got a $70K SBA loan and washed it down the toilet.
Interested in hearing our big mistake, story and how we operate?
Then check out the podcast.
4. Prime Power: How Amazon Squeezes the Businesses Behind Its Store
This article sums up what you and I know about Amazon’s business practices.
The last sentence hits home.
“We are dealing with a partner,” he said, “who can and will disrupt us for unpredictable reasons at any time.”
As Amazon continues to grow and dominate the market, we become increasingly dependent on them because they’ve made it convenient for the buyer and the seller.
For most sellers, we are on the safe side, but the bigger you get, the easier it is for Amazon to copy your product, deactivate your account and there’s nothing you can do about it.
If Amazon can shut down and control big brands, there’s nothing small sellers can do.
There’s a great point in the article where Jeff Bezo’s categorizes Amazon into two buckets: Investments and contributors.
The e-commerce side of Amazon is the cash cow now and is used to fuel new growth and expand into different areas.
I also consider our business to be a contributor where we are using the profit from Amazon to diversify into different avenues of sales. Wholesale, tradeshows, different markets. Something away from Amazon.
Thinking about diversifying and planning is never a bad idea. Before it’s too late.
5. Gorilla ROI continues to grow and improve
Since we launched Gorilla ROI, we’ve improved the service more than 10x in a short period of time to make it easier for you to run your operations.
But I’m also very realistic and clear about what Gorilla ROI does NOT support.
New functions and improvements throughout the year like
They all help in gathering your numbers for tax season.
What is Gorilla ROI?
Gorilla ROI automatically pulls Amazon data into Google sheets for you to make sense of the data without the inconvenience of manually downloading, sorting and updating spreadsheets.
Learn how you can centralize your data and use it to increase your ROI.