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Amazon Waives Seller Fees Amid COVID-19 Setbacks
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As COVID-19 continues to impact individuals and businesses across the globe, many Amazon sellers are facing financial hardships. Amazon is now focusing its fulfillment resources on medical supplies, household necessities, and other high-priority items — and many sellers of products that do not fall under these categories are taking a hit.
Amazon sellers of non-essential products are seeing a massive drop in sales due to shipment delays, not being able to restock their FBA inventory, and the fact that consumers are mostly purchasing items that are needed during the current crisis.
In an effort to ease some of these burdens, Amazon recently announced that it is waiving various seller fees and payments. Below is an overview of which fees have been affected and what that means for your business.
FBA Storage Fees
On March 24, Amazon announced that it was temporarily pausing removal orders in some of its warehouses. Sellers were informed that they can still create removal orders, but there would be delays in completing these requests.
As a result of the inability to remove inventory, Amazon has put a pause on long-term storage fees for all inventory stored in its U.S. and Europe FBA fulfillment centers. These fees were initially supposed to be deducted from sellers’ accounts on April 15, and Amazon noted it would be waiving storage fees for the last two weeks of March.
This is welcoming news for merchants who have slow-moving inventory sitting on FBA warehouse shelves and could save them up to thousands of dollars in storage fees.
Multi-Channel Fulfillment Fees
Amazon also reduced its multi-channel fulfillment (MCF) fees, effective April 1. MCF is similar to FBA, except that sellers who use this service have Amazon fulfill their customer orders that come from outside sales channels, such as their own website.
The reduced MCF rates are applied to expedited two-day shipping (up to 30%, depending on the size tier) and standard shipping. Additionally, new size tiers for standard and expedited shipping have been introduced. A detailed list of updated MCF fees and size tiers can be found here.
Amazon Lending Payments
Amazon also recently announced that it would put a temporary halt on loan repayments for its Amazon Lending program. This means that borrowers will not have to make any payments until May 1. Interest will not accrue during this collection pause, but the number of remaining payments will stay the same.
Tens of thousands of sellers have received financing through this program in amounts ranging between $1,000 and $750,000 per borrower, with terms of three to 12 months to repay their loans in full.
Amazon’s decision to temporarily suspend loan repayments allows sellers to keep more cash on hand while their sales are negatively impacted due to the COVID-19 crisis.
Amazon Referral Fees
Amazon decided to reduce its referral fees across various product categories, including Shoes, Handbags & Sunglasses, Outdoor Furniture, Personal Care Appliances, and others. Although this was announced at the end of 2019, before the coronavirus was considered a global pandemic, it is undoubtedly helpful to sellers during this challenging time.
Referral fees go toward the tools and programs Amazon provides to help sellers access more customers through its marketplaces, as well as additional benefits, such as processing credit card transactions, offering customer support, and transaction risk monitoring. Referral fees are automatically taken out of each sale and are based on total selling price, including shipping and gift wrapping.
The full list of product categories that now have discounted referral fees, as of Feb. 18, can be found here.
We can expect Amazon to continue making changes as circumstances around COVID-19 evolve over time. Even through this tumultuous period, Amazon continues to prioritize the customer experience while also seeking to reduce financial burdens for the sellers on its marketplace.
For more information on the coronavirus crisis and its impact on the Amazon marketplace, visit our COVID-19 resource center.
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