Amazon sellers who sell small and light items and use FBA are going to see costs rise. This is due to recent changes Amazon made. All items exceeding 10oz or $7 will be converted to standard FBA and therefore subject to the standard FBA fees.
This is a pretty big change from the old Amazon small and light restrictions: 15oz and $15 or less. (The other requirements have not changed: Dimensions have to be 16 x 9 x 4 inches or less, and the products must be fast movers).
Retailers who used to be able to fulfill these items under the old guidelines are now going to pay standard FBA fees. Which means their costs are going up significantly.
This will leave many scrambling to find a way to mitigate the additional costs. Retailers who primarily or exclusively sell small items may have to change their fulfillment strategy and operation entirely.
Background Of The Amazon Small and Light Program
The aim of the Small and Light program is simple. When it rolled out in 2015, it was a way to help reduce the cost of fulfilling orders for small, lightweight inventory that fit into a certain price range.
The goal was to attract third-party merchants by making it more cost-effective to fulfill orders for small items on Amazon. It was particularly geared towards fast-selling items.
It was originally intended as a way to offer free shipping for a wide variety of smaller items. Merchants were able to benefit from the sheer scale of Amazon’s fulfillment network. When it rolled out, it was billed as being more cost effective than regular FBA (or to ship yourself).
That is still the case for the items that still qualify for the small and light program. Merchants selling items that just got ‘sized out’ will see fulfillments costs rise as they move to the traditional FBA structure.
The change actually took place in July of 2019. Any products enrolled in the program before that date were eligible to fulfill under that fee structure through January of 2020. Now, the new requirements are fully in place. This means that the time has come for many retailers to realize the effects of this change.
Many sellers may be totally rethinking their use of FBA. If their items now fall outside of the small and light category, many sellers are doing the math. They are realizing that it may not be sustainable to continue using FBA for these smaller items.
How Merchants Can Bring Fulfillment In-House
If the order volume for these sized items is low enough, most merchants will simply eat the costs and carry on. Most people are used to rising costs and can adjust.
But if a large chunk of your business model depends on the small and light rates, it might be time to re-think fulfillment. It might be time to internalize your inventory. It might be time to rely on a different method for tracking inventory and fulfilling orders.
SkuVault, with its powerful integrations, strong reporting, and multi-channel inventory tracking, is a crucial piece to the in-house fulfillment puzzle. It can help minimize fulfillment times, and help sellers recoup some of the savings they saw in previous years under the small and light model.