When it comes to Amazon and their policies, things are always changing. Whether they are adding in a new policy or updating fee structures, things rarely stay the same for long. If you are someone who relies on Amazon to sell products, in any shape or form, it’s crucial to keep tabs on all the new changes.
We know that it can be hard to keep up with everything so we wanted to create a living and breathing document that keeps track of everything for you. This resource will be constantly updated to reflect new changes and keep sellers up to date on what’s going on.
Amazon Associates Commission Change – April 21st 2020
As of April 14th, 2020, Amazon notified their affiliate (called “associates”) partners via email that they will be changing their rates beginning April 21st. We wonder and consider: “will it just be temporary?”. This has resulted in several popular categories seeing a substantial change to their referral fee, below is a table of all the changes with the relative percentage change. If you have been affected by the changes and are interested in selling your business, please let us know by requesting a free valuation here.
Amazon has, for over 10 years, offered their Associate program to anyone with a website and willing to advertise Amazon products in exchange for a percentage of the sale revenue. The program has generated significant revenue for a lot of websites and has helped the development and growth of some large websites such as BuzzFeed who will publish buyer guides and embed affiliate links in their post. This change will have a resonating impact on the entire affiliate market, and will result in some significant changes in the way that webmasters advertise products. It should be noted that larger sites such as the aforementioned BuzzFeed have custom rate-cards and therefore may (or may not) be affected by these changes. Amazon has previously shown little preference for big players on their platform (mostly demonstrated in the FBA space) so we would expect this to affect everyone.
Here is the full email from Amazon:
We hope you are staying well during this time. We are writing to inform you of upcoming changes to the Amazon Associates Program Operating Agreement, which governs your participation in the Amazon Associates Program. All changes are effective as of April 21, 2020. Visit the What’s Changed page to see a summary of these changes. You can also find the Operating Agreement, Program Policies, and the Fee Statement if you would like to refer to the current, pre-change versions.
The Amazon Associates Program”
One member of the program (and FE client), Gareth Bull noted on Twitter “From memory they usually did [sic] this in March (before the financial year) looking at these new comms they’ve dropped all “essential” corona [categories] to 1%” and they go mention “which implies it could be temporary”. From our research, we believe that this could be temporary, and while there is economic uncertainty with COVID-19, Amazon are trying to protect their bottom line – despite a huge uplift in recent sales.
Some of the largest relative changes can be seen in Grocery, Health & Personal Care and Furniture, Home, Home Improvement, Lawn & Garden, Pets Products, Pantry. These are the niches that a lot of Amazon Associate content sites were built around due to their lucrative commission structures – so we would now expect that to change as site owners get creative in ways to maintain their earnings – either by switching how they earn, or transitioning to a new focus niche/product line.
This change might seem substantial but it is also offset by positive economic growth, for example a recent study published by the Statista shows that in 2014 the pet products market revenue was $4.9 billion, which grew significantly to $7.1 billion in 2019, representing a 6.35% compounded annual growth rate. Illustrating that the pet products market is on an upwards trajectory, despite the change in the commission structure, if market experiences the same growth rate over the next 5 years, the reduction in commission will be offset somewhat by overall industry growth.
There is a similar trend in the home and home improvement market, the industry was valued at a staggering $374.6 billion in 2018 and is set to grow at a 4.5% CAGR by 2026. This positive upward trend shows that although the commission structure has been impacted negatively, these are still thriving industries. With plenty of growth and a vast product catalog affiliate partners will still be able to maintain high revenue streams through advertising these bountiful high-ticket items.
Times like these emphasize the importance of a diversified revenue stream. There are plenty of affiliate networks that offer a competitive rate (Walmart, ShareASale, Commission Junction) and there are also more niche-specific ones such as Chewy and MediaVine for the pet niche. Whilst this is not the end of the Amazon Associate Program, we believe that these changes are only going to be temporary, and once Amazon realize that their current affiliate partners are more willing to work with other brands they might reconsider their options.
Another thing to consider is Amazon Prime: the average Amazon Prime user will spend $1,400 per year, and the way that the Associates program is set up, is it allows affiliates to earn a referral fee on the entire basket, rather than just the advertised item. This is a huge benefit of the program, and although you may have a website which strictly advertises products in the home niche, a purchaser may also include items from other categories such as luxury beauty products which pay a lucrative commission rate of 10% – meaning the majority of sites (even if targeted to one of the niches mostly affected) will not drop by the entire percentage we noted.
Amazon Earnings Calculator
If your site has been affected by the changes it is not as simple as just looking at the commission rates and applying a percentage discount. All sites will sell a variety of products across categories.
The team at FE International have put together an automated calculator which will tell you, based on your previous earnings, how much you would expect to make going forwards. It is simple and free to use and only requires an export from your Amazon Associates dashboard. The calculator makes a number of assumptions which you can see and has a set of instructions you can follow for one/all of your sites.
If you would like access to the calculator, please enter your name and email below and you will get an email with the calculator (check your junk folder if you don’t immediately see it!). The tool is free for you to use as an individual and we would appreciate sharing this post for anyone you think will find it helpful. Please note: the calculator is downloadable and we do not gather or have access to any earnings data from your site(s).
Amazon Associates Alternatives – below are some popular options we see used
- ShareASale – General – 5% – 15% commission, 30 – 90 day cookie length (over 4,000 merchants on the platform).
- ImpactRadius – General – 1% – 20% commission, 30 – 90 day cookie length (brands like Adidas, Levis, TicketMaster, Microsoft).
- Commission Junction (CJ) – up to 30% commission – long cookie length depending on brand.
- AvantLink – General – 5% – 15% commission – long cookie length.
- Commission Factory – Up to 10% commission. Better for websites with a lot of Australian traffic.
- Chewy (Pet niche) – Paid a fixed fee based on new users.
- MediaVine – You need 25,000 monthly viewers before you can apply, and general an ad-based model
- Ezoic – You will need 10,000 monthly viewers and will pay per 1,000 visitors.
Price Structure Changes in Europe – March 1st 2019
From March 1st, 2019 Amazon will aim at incentivizing affiliates to create product-specific traffic by unrolling large changes to their fee structure. While this is currently limited to Europe, these changes are likely to arrive in the US in the not too distant future.
Affiliates who send non-product-specific traffic to Amazon, linking to the Amazon homepage or to certain product categories, are likely to see reduced fees. Meanwhile, affiliates sending targeted traffic to specific products could see their fees increase significantly. The fee increases will relate only to certain product categories, and you can see how they will affect the UK in the chart below. If you are curious about what commission you could be earning, download our free Amazon Commission Calculator.
Merch by Amazon Fee Changes – Effective January 30th, 2019
Amazon is lowering the royalty paid on US t-shirts in order to account for increases in manufacturing costs. If your t-shirts are priced below the new minimum price, they will be automatically raised to the minimum. To offer more competitive pricing, Amazon is lowering costs for sweatshirts, hoodies, and long sleeve t-shirts and introducing lower default list prices. List prices for existing sweatshirts, hoodies, and long sleeve tees will be lowered on a rolling basis so their current royalty is unchanged.
2019 US referral and FBA fee changes summary
Referral fee changes will take effect February 19, 2019.
See the list here.
FBA fulfillment fees
The adjusted FBA fulfillment fees shown here take effect on February 19, 2019:
2019 US FBA inventory storage fee changes
The storage fee changes will take effect on February 15, 2019. Monthly storage fees for most products will be unchanged from last year.
Long-term storage fees: Starting February 15, 2019, these fees will be eliminated for items that have been in a fulfillment center for 181 to 365 days. Fees still apply for items that have been in a fulfillment center for over 365 days.
On February 15, 2019, Amazon will reduce the minimum charge for items that have been in a fulfillment center for over 365 days from $0.50 per unit per month to $0.15 per unit per month. You will be charged the applicable total long-term storage fee or the minimum long-term storage fee, whichever is larger.
Tax Collection Policy Change – Effective November 14th, 2018
Applicable United States (U.S.) sales tax will now be charged to AWS marketplace vendors from one day after the vendor initially enrolls. This tax will apply to all software products. The amount of tax will vary depending on the subscription type, the account’s billing address, and other factors. The amount of tax payable will appear on the vendor’s regular monthly invoice, along with any other AWS marketplace software charges.
Fulfillment by Amazon Fee Changes – Effective August and September 15th, 2018
Beginning September 15, long-term inventory storage fees will be billed per month rather than semi-annually, with a new $0.50 minimum charge on each unit stored in warehouses for 365 days or more. Amazon will charge sellers the greater of either the long-term per-unit storage fees or the monthly long-term storage fee.
Source: Amazon FBA Seller Central
Fulfillment by Amazon Inventory Storage Fee Changes – Effective April 1st, 2018
On April 1, Amazon will increase fees for storing inventory by $0.05 per cubic foot for standard and oversize items, which will be first reflected in May statements for inventory stored in April. According to Amazon, this update in fees is intended to generate an improvement in the storage of inventory by FBA sellers.
Source: Amazon FBA Seller Central
Fulfillment by Amazon Fee Changes – Effective February 22nd, 2018
On February 22, Amazon will roll out its yearly update to US FBA fee rates in order to reflect the rising costs of fulfillment, transportation, and customer service. The main changes to the fee structure (for now) include:
- Adjusted fee rates will apply throughout the entire year, meaning there will be no discounted rates for October through December.
- Excluding small standard, large oversize, and special oversize items previously fulfilled by Amazon during the period of January to September, most tier rates have increased by less than USD$1 each. The small oversize category is the most highly impacted, with a rate of over $1.25 per item.
- Changes in favor of sellers include certain large oversize and special oversize items previously shipped during January through September.
- Dimensional weight calculations are changing from being divided by 166 to being divided by 139. Note that dimensional weight as the unit volume (lengthxwidthxheight) is only applicable for oversize items and large standard items weighing more than 1lb. Dimensional weight is also used to calculate fees for Multi-Channel Fulfillment and the Inventory Placement Process.
For a detailed list of changes, please see the table below.
Merch by Amazon Fee Changes – Effective January 15th, 2018
An adjustment to the royalties paid to Merch by Amazon store owners on Merch product sales will begin to take effect starting January 15. Claiming rising costs to support the Merch business, like storage, fulfillment, transportation, raw materials, customer service and fraud prevention, Amazon has issued a new fee structure. Certain products will see a decrease in the royalties paid at a particular listing price, while others may see an increase at a particular price. If your product is priced below the minimum price point, Amazon will automatically update it to the new minimum price. See the table below for the shift in price for each product at a given list price:
Q4 Fee Changes – Effective October 1st, 2017
There are two new fee changes coming that will have an impact for sales occurring in the month of October. Amazon has decided to make all fees in October consistent with the fee structure for the Q4 months of November and December. Previously, October’s fees were consistent with the fees during January through October.
The two impacted fees are:
- Fulfillment fees reduced
- Storage fees increased
Let’s look at each one of them in more detail below.
Fulfillment Fees Reduced
In the past, the fulfillment fees for October have been consistent with the months of January through October. However, after the changes October will now have the fees consistent with the months of November and December. This means that the fulfillment fees will actually be reduced lower than before.
Storage Fees Increased
Similar to the fulfillment fee change, the inventory storage fees for October will now be consistent with the fees in November and December. This change is going to increase the fees.
These two fee changes may help you or hurt you based upon the types of products you are selling. It’s recommended that you run the calculations before these changes take place in order to be prepared for the fee changes.
Updated Seller Shipment Requirements – Effective July 19th, 2017
To keep up with the demand of prime shipping and same day shipping, Amazon will be increasing the amount of warehouses they ask you to send your shipment to. This will allow them to ship your items quicker to people all across the country. This means that instead of being asked to split your shipment into two and send it to two different warehouses, they might ask you to send it to 3 different warehouses.
Amazon will still offer inventory placement, which allows you to ship to fewer destinations for a fee. In the past, the fee to use the inventory placement was $0.30 + $0.10/lb above the first 5 lbs. The fee now will be based upon how many warehouses under their suggested amount you ship to. For example, if Amazon recommends that you send your shipment to three different warehouses and you choose to only ship it to two then your fee will be $0.50 + $0.20/lb. above the first 5lbs. The fees will increase based upon the difference between their suggested amount of warehouses and the amount you ship them to.
You can see all of the various fee scenarios below:
The volume-based fixed standard fee structure will be shifting towards a category-based fee structure. Amazon has removed the variable standard program fee rates and caps on PC earnings. This change means that your commissions will no longer be based on the amount you sell, rather the categories you sell in. You can view what rate your category falls in here:
The Amazon Associates Program in the UK already upholds this category-based fee structure that slightly differ from the US structure that is being implemented. You can see the current Amazon UK rates here:
Increased Amazon Monthly Storage Fees – Effective March 1st, 2017
The monthly inventory storage fees for standard size items is going to be increasing after March 1st. The fee will be increased from $0.54 per cubic foot to $0.64 per cubic foot. This is a fairly large jump in fees so make sure you to make note of this date. Oversize product fees will not change.
To view the full fee changes you can see the chart below:
New Amazon Fulfillment Fee Changes – Effective February 22nd, 2017
There are a handful of new Amazon fulfillment fees that are changing as of February 22nd, 2017. The three new changes are as follows:
- Order handling, pick and pack, and weight handling fees are all going to rolled into one fee called “fulfillment fees”
- Increased media product fees
- Zero-fee fulfillment will be discontinued
Let’s take a closer look at each one of these changes:
Consolidation of Fulfillment Fees
Previously, there were three different types of fees that were charged to sellers who were using Amazon as their fulfillment service. Those fees were order handling, pick and pack and weight handlings. Moving forward, all of these will be considered as a fulfillment fee and will not be broken down into specific categories.
You will notice the change when you go to view the sales reports within the Seller Central dashboard.
Media Product Fees Increased
Media products will no longer be charged fees at a different rate than non-media items. All media items will be charged at the standard size fee level. This change means that media items will see a fee spike. You can view the fee changes below:
Zero-fee Fulfillment Ended
Before February 22nd, any standard sized items that sold for over $300 did not receive a fee for fulfillment. This will be discontinued and will now be charged a fee based upon the products size tier. If you are selling an item above $300, your profit margin is going to take a hit so make sure you adjust accordingly before February 22nd.
Free Return Program – Currently a Pilot Program
Note: This is not something that has been released to all sellers and is only for a select number of sellers. We will keep you updated on the progress of this.
There have been rumors that Amazon is rolling out a new program that will force sellers to pay for all return labels if a customer wants a refund. Effectively, Amazon is making sellers cover all refund shipping costs.
If this program gets a full rollout, it’ll be more important than ever to ensure your products are properly described in your listing and only sell high quality products to reduce the number of returns.
Time to Respond to A-to-z Claims Has Changed – Effective Nov 14th, 2016
The time that you must respond to a A-to-z claims has been reduced from 7 days to 3 days. This is a minor change, but it’s important to know as a seller because if you fail to respond to a claim within 3 days your account will automatically be debited to issue the seller their refund.
New Manual Process Fee for FBA Sellers – Effective Nov 1st, 2016
A new fee has been added for sellers that do not provide box content information on their new shipments after November 1st, 2016. You will be able to avoid this fee by providing this needed information to Amazon for all future shipments.
The information you’ll need to provide Amazon about your box content includes:
- Number of each SKU per box
- Weight and dimensions of the box
- Expiration date when applicable
This information should be readily available for most FBA sellers and shouldn’t be too hard to avoid this fee.
If you don’t provide this information, then you’ll be looking at a $.10 to $.15 fee per unit depending on the month of your shipment. The fee will be $.10 during the months of January to October and $.15 during the months of November and December. You’ll be charged these fees 14 days after your shipment has arrived at an Amazon warehouse.
Per Amazon, sellers who comply with this new rule will have a few advantages over those who don’t. A couple of those perks include having their shipments processed through their fulfillment network quicker and their inventory will be ready for sale sooner.
FBA Sellers are now Eligible to Sell Through Amazon’s Subscribe and Save Program – Effective Oct 31st, 2016
A new opportunity for FBA sellers has been announced that will allow them to reach more customers by being a part of Amazon’s Subscribe and Save program.
What is the Subscribe and Save program?
According to Amazon, “With Subscribe & Save, you may receive a discount off the Amazon and Amazon Marketplace everyday low price on eligible products. You always enjoy free standard shipping, and the convenience of regularly scheduled deliveries when you receive your subscriptions on your monthly Subscribe & Save delivery day.”
One huge reason why FBA sellers should be interested in this is because of the regularly schedule delivery of products. This could be a great new way to make consistent sales, especially if your product is one that needs replenishing every few weeks or months. Sellers who sell things such as dog food, vitamins or other products that need frequent replenishments should consider looking into this.
This is a cool new way to make sales, however, not everyone is going to eligible to join. Your eligibility will be determined by your sales history and your performance metrics as a seller. There are also certain FBA account requirements you must meet as an Amazon seller to be a part of this. Those requirements are as follows:
- Account must be in good standing
- Must have a feedback rating of 4.7 or higher
- Account must be active for at least 3 months
- Products must be sold through FBA
- Must maintain an in-stock percentage of 85% or more
Incentivized Review Policy – Effective Oct 3rd, 2016 (Updated as of Oct 24th, 2016)
Amazon has updated their policies regarding reviews and this time, FBA sellers are taking notice. No longer are sellers allowed to provide a free or discounted product in exchange for a review. For most FBA sellers, giving away products for free, or deeply discounted, is one of the most common ways to jumpstart a new product or brand.
This new policy change doesn’t mean that you can no longer use discounts and coupons as a means of promotion. What it does mean though is that you can longer give a discount if you’re incentivizing the buyer to leave a review in exchange for the discount. That is where you’ll run into problems with Amazon. If the discounted (or free) product has any influence over the buyer leaving a review, then you are technically violating their terms of service.
Below is a list of examples that Amazon states is against their TOS:
- You provide a free or discounted product, gift card, rebate, cash payment, or other compensation in exchange for the review.
- You provide or withhold free or discounted products or other benefits in the future based on whether the customer writes a review.
- You use a review service where reviewers’ continued membership depends on writing reviews.
- You use a review service where you can rate customers based on their reviews.
- You use a review service where customers register their Amazon public profile so that you can monitor their reviews of your products.
Amazon also listed some examples of using discounts and free products that DO comply with their TOS:
- You may offer discounts that are generally available to all Amazon customers, such as Lightning Deals.
- You may give out free products at trade shows, conventions, or other similar venues where you are unable to monitor whether the recipients write a review or provide or withhold any benefits based on whether a review is written or the content of the review.
This goes to prove that Amazon is still allowing the use of discounts and free products as a way of marketing your products, but you need to do so in a way that doesn’t “incentivize” the buyer to leave a biased review.
What about 3rd party review services?
In Amazon’s new TOS, they explicitly touch on using 3rd party services and state they are not allowed. This is going to drastically change how FBA sellers get reviews and it looks like new strategies are going to need to be developed to launch new products. Most of these 3rd party review services will probably update their own terms of service to be complaint with Amazon, however, you should be very cautious using them moving forward.
New FBA Fee Changes – Effective Oct 1st, 2016
To reduce warehouse overload and from storing products that don’t sell, Amazon has modified their current fees for sellers. These fee changes are going to affect two different areas, one of them being the monthly inventory storage fee and the other being weight handling fees.
Let’s look at the changes occurring in the monthly inventory storage fees first. The table below does a good job of explaining the changes:
Monthly Inventory Storage Fee Changes
As the table shows, these changes are mostly geared towards the holiday months where they are expecting a large volume of shipments and products to arrive. The bulk of the months, January to September, there are no fee changes.
The fees in October dropped for both standard size and oversized products. The biggest fee change comes in November and December where they are dramatically increased. Standard-size products increased by $1.53 per cubic foot and oversized products increased by $0.58 per cubic foot.
This is Amazon doing its best to try and limit the amount of excess inventory shipped to its warehouses during the holiday months. It’s also important to note that these fee changes affect standard-size and oversize products only.
Next, let’s look at the fee changes for weight handling. You’ll be surprised to find that Amazon has decreased the fees for both standard-size and oversize products. Check out the table below for more detailed info (image source – https://sellercentral.amazon.com/gp/help/201411300?ie=UTF8&*Version*=1&*entries*=0&):
Weight Handling Fee Changes (standard-size)
Weight Handling Fee Changes (oversize)
Keep in mind, these fee changes are only going to be in effect for November and December and will return to their normal rate starting January 1st, 2017. Amazon has said that they are lowering these fees to offset the fee increase for monthly storage space.
New Customer Review Requirements – Effective Sep 2016
New requirements have been added for customers to be eligible to leave a product review. These new requirements include:
- Have $50 or more in total purchases on your Amazon account (prime subscriptions and items purchased at a discount do not go towards this $50 minimum)
- Purchases must be paid with a valid credit or debit card
If your account does not meet those new requirements, then you will be unable to leave a review for a product that you purchased.
Please note, this new $50 minimum is not for the purchase itself, but instead for total account purchases. This means that if you have $50+ in total account purchases but buy an item for $3 you can still leave a review.
The $50 minimum seems to be Amazon’s way of battling against people leaving reviews in exchange for a free or discounted product. Doing this will prevent people who only leave reviews after they have received a product for free by making them spend a decent chunk of money before they can do so.
The valid debit or credit card requirement is also a new way for Amazon to prevent incentivized reviews. A common way for reviewers to get a product for free was to buy it at full price, but with a prepaid gift card provided by the seller of the product.
Brand Gating Policy Update – Effective Aug 29th, 2016
Amazon has implemented a new way to prevent the sale of counterfeit items by creating a new fee and application process for resellers.
Sellers wanting to sell a product that is owned by a brand must pay a $1,000+ fee, send in an application to the owner of the brand and be accepted by them to sell their products. This new change is mainly going to impact resellers and retail arbitrage sellers.
On the other hand, this is good news for private label sellers who create their own brand and have been approved by Amazon’s brand registry. This now prevents resellers from selling your branded product, unless otherwise approved by you. Now more than ever, it’s important for private label sellers to apply for brand registry and make sure your brand is recognized by Amazon.
However, this won’t stop people from creating replica products, removing your brand and then selling it as their own. This is especially true for products that are very similar in nature and the brand name is the only differentiating factor.
New UPC Requirements – Effective Aug 2016
There has been a policy change when it comes to the UPC (Universal Product Code) criteria Amazon that requires for all products. This new change states that Amazon will be checking all UPC codes with the GS1 database and all the information must match. If it doesn’t the product will be considered invalid and will result in your product being removed. You’ll also run the possibility of your account being suspended.
Previously, there wasn’t any language that directly stated the UPC requirements or that Amazon was going to check each UPC with the GS1 database. It looks like Amazon is tightening up and trying to ensure only legitimate products are being sold, which is a good.
Although this new policy change will make Amazon’s marketplace better, it’s not the best of news for a lot of private label sellers. The reason being that many sellers are using UPC codes that they have purchased from resellers, meaning they didn’t buy directly from GS1. This means there might be a chance that the UPC codes purchased from these resellers will not match the information that GS1 has on those UPC codes. You can check GS1’s database and quickly determine if the UPC codes you’re using are valid or not.
Any products that are currently selling on Amazon are not able to change UPC codes. However, there is a workaround. If you have been approved for brand registry, then you can use a Global Catalog Identifier (GCID) as a replacement for using UPC codes. You’ll need to create a seller support case to update active products from UPC to GCID.
Moving forward, you should either only buy your UPC barcodes from GS1 or use GCID in place of UPC codes if you have been accepted into brand registry. This will ensure you stay within Amazon’s new UPC policy.
High Volume Listing Fee Change – Effective Aug 1st, 2016
A new fee change has been announced by Amazon, however, this won’t have an impact on many private label sellers. This is more geared towards the Fulfillment by Merchant (FBM) sellers who use Amazon’s marketplace to dropship items. These types of sellers often have hundreds of thousands of ASINs while most of them never even make one sale.
Let’s take a closer look at the details of this new fee change.
Amazon will be charging a monthly fee $0.005 per ASIN that meets the following criteria:
- Is non-media
- Is an active offer
- Has not made sale by any seller in the last 12 months
- Has been listed on Amazon for at least 12 months
This fee will only be charged after you surpass 100,000 ASINs that meet the above criteria. As you can see, you have quite a bit of ASINs to work with before you must begin worrying about this fee. Most private label sellers will never even come close to reaching 100,000 ASINs.