Amazon.com Inc. this week announced several fee and cost changes that affect both marketplace sellers and online customers.
For marketplace sellers, Amazon adjusted the referral fee rate structure—the fee it collects on each unit sold by a seller on the marketplace—it sets by product category. The referral fee rates will increase for the sale of goods in the clothing and accessories category, and in the shoe, handbag and sunglass categories.
Currently, Amazon’s cut for goods in these categories is 15% of the total sale price excluding any taxes, with a minimum fee of $1 per item. As of April 15, the fee for clothing and accessories items will be 17%. For shoes, handbags and sunglasses, the rate changes as the total cost of the sale increases. The fee will remain unchanged for goods priced at $75 or less, however the referral fee for goods that cost more than $75 will be 18%. The $1 minimum fee continues to apply to all purchases.
The referral fee structure for jewelry items will change Feb. 22 and be in effect for one year. The current fee for the sale of jewelry is 20% with a $2 minimum. The coming change keeps the 20% fee in place for sales up to $250, then lowers the fee to 5% for any portion greater than $250. For instance, if a marketplace merchant sells a ring for $300 today, Amazon charges the seller $60 for the referral fee (20% of the total cost). Starting Feb. 22 and running through Feb. 21, 2019, Amazon will charge the seller $52.50 ($50 for the first $250 and $2.50 for the remaining $50).
The change in jewelry means marketplace sellers would pay less fees if they sold high-priced goods on Amazon.com. The changes in the fashion and accessories categories mean sellers will pay more to sell those goods through Amazon.
Amazon in recent years has made a push into fashion categories, and apparel has been a high-growth category for the retailer. One Click Retail estimates apparel sales on Amazon grew 32% in the third quarter to $1.2 billion, compared with approximately $910 million a year earlier. More than half of online apparel shoppers (52%) say they shopped for apparel on Amazon during the last six months, according to the results of a consumer survey released this week from CPC Strategy, a marketing agency.
Additional fee changes that may impact marketplace sellers using the web giant’s shipping service Fulfillment By Amazon to pack and ship goods take effect February 22. Click here to see the details.
A different change announced today affects Amazon.com customers. Amazon is raising the cost of Amazon Prime memberships bought on a month-to-month basis by $2. The new rate, effective today, is $12.99 a month, up from $10.99 a month. That means if a customer maintained a Prime membership for an entire year but paid month to month, he will now pay $155.88 for that membership, up 18.2% from $131.88. The cost of a Prime membership paid for once a year is $99, and remains unchanged.
The $5.99 monthly rate for Prime memberships available to consumers receiving government assistance that Amazon introduced last June remains unchanged.
Amazon raised the price of Prime Student plans paid month to month by $1, now $6.49 from $5.49. The price paid once a year for an annual student membership remains $49.
Amazon began offering the option to pay for Prime memberships on a month-to-month basis in 2012.
Amazon, No. 1 in the Internet Retailer 2017 Top 500, does not release the number of Prime customers except to say it has tens of millions of members in 16 countries. An estimate from securities research firm Consumer Intelligence Research Partners (CIRP) pegs Prime membership at 90 million as of Sept. 30. That means an estimated 63% of all Amazon customers in the U.S. are part of the program, according to CIRP.Favorite