Amazon raises seller fees!
A few days ago we all got hit with an increase to our Amazon Prime subscriptions. The cost of Prime if you didn’t know is going from $10.99 to $12.99. Honestly, with all the benefits Amazon Prime offers, this $2 increase is going to create revenue for Amazon. It is unlikely that anyone is going to cancel their subscription over a $24 annual increase. The seller fees in some of the most popular categories are going up however.
Clothing and accessories went up 2% to 17%. Handbags and Sunglasses also increased from 15% to 18%. These are the most popular categories on Amazon.com.
What does this mean?
This means that as a consumer you will probably pay more for brands you like on Amazon.com. As a seller you are obviously going to have to raise your prices and lose business or take the hit on the 2%. This is why I have always stressed having your own website and building a customer base off of Amazon.
At any moment Amazon can raise the fees on its sellers because they are beholden to their shareholders in the end. The third party retailers are what has made Amazon so successful, but the Amazon brand is going to make it profitable. Amazon would rather push its own brand of products on Amazon.com where their margin is much higher than selling a third party item.
Everyone will feel the pain of an Amazon rate hike on the sellers except for the shareholders who spend $0 on Amazon.
What do we do now?
If you are a seller on Amazon and only Amazon, then it is time to start building your own website. On this blog I have written about the benefits of having your own site, and the dangers of relying on Amazon for all of your orders. This is the time I was warning about. If Amazon raises fees on sellers now, then they are going to raise fees on sellers later as well. Amazon is convenient, but they are hurting the small business owners of America by choking them out of their profits.
This is why Amazon is definitely the Walmart of the internet.
That is all
That is all I have to share at this time, sellers beware of the coming Amazon products in your space. Amazon will likely have Amazon brand products to compete with all of its best sellers. When that happens you are going to wish you had a back up sales channel in place. If you don’t already it is time to start thinking about other avenues for sales.