Amazon Introduces Low-Price FBA Rates, Replacing the Small and Light Program

Key Takeaways:

• Amazon has discontinued the Fulfillment by Amazon (FBA) Small and Light program in the US.
• The program allowed sellers to enrol in low-price, small, and light products to receive lower FBA rates, albeit with slower shipping speeds than standard FBA.
• After July 1, 2023, new products will no longer be eligible for enrollment in the Small and Light program.
• Starting August 29, 2023, Amazon will introduce lower FBA rates for all items priced below $10*, replacing the Small and Light program.
• Eligible items will automatically receive the low-price rates and will not be subject to 2023 holiday peak fulfillment fees from October 15, 2023, to January 14, 2024.
• The new FBA rates for low-price products will be an average of $0.77 lower per item than the current rates for these products.
• Sellers with products previously enrolled in Small and Light and priced below $10* may pay approximately $0.30 more per item under the new rates but will benefit from faster FBA fulfillment speeds.

Dive Insight:

Amazon's decision to end the FBA Small and Light program and introduce low-price FBA rates for all items below $10* signals a strategic shift in its fulfillment strategy. The Small and Light program provided sellers with a cost-effective option for smaller, lower-priced items but also came with the trade-off of slower shipping speeds. By streamlining its offerings and lowering FBA rates across the board for low-price products, Amazon aims to simplify the fulfillment process and provide consistent customer service levels.

While this change may result in a slight cost increase for sellers who were previously enrolled in the Small and Light program, they stand to benefit from faster FBA fulfillment speeds, which can enhance the overall customer experience and potentially lead to higher customer satisfaction and repeat business.

Moreover, introducing low-price FBA rates without needing specific program enrollment allows for greater flexibility and convenience for sellers, as they no longer need to segregate eligible items separately.

By eliminating the Small and Light program and standardizing FBA rates for low-price products, Amazon aims to streamline its fulfillment operations, enhance efficiency, and ensure a more uniform customer experience. Also, exemption from holiday fulfillment fees during the peak shopping season can further incentivize sellers to utilize low-price FBA rates for their eligible products.

As the e-commerce landscape continues to evolve, Amazon's continuous efforts to optimize its fulfillment services and provide value to sellers and customers will likely shape the future of online retail and logistics. Sellers can adapt to these changes by evaluating their product pricing and fulfillment strategies to leverage the benefits of the new low-price FBA rates while offering faster shipping speeds to their customers.