Navigating Amazon’s Changes: The End of Ecommerce Programme FBA Small and Light in the United States

As the ecommerce landscape continually evolves, sellers must keep their fingers firmly on its pulse.

The latest update? Amazon U.S. is discontinuing its FBA Small and Light programme, replacing it with a fresh initiative – the Low-Price FBA.

This proposed scheme, taking effect from 29th August 2023, readjusts the eligibility price for products to $10, just seven months after it was raised to $12.

While this shift offers a silver lining to some, for many U.S. Small and Light Sellers, the picture isn’t as rosy. The incoming changes imply a hike in fees by a projected $0.30 per unit – an impactful rise for those managing with very tight margins.

The sellers poised to benefit from this adjustment are those offering low-cost goods who hadn’t already hopped on the Small and Light bandwagon. For these sellers, the move should result in potential savings of approximately $0.77 on eligible products. Similarly, consumers purchasing low-price products will receive their orders quicker, an advantage of the FBA fulfilment.

However, not everyone is in luck. Small and Light programme users with items priced below $10 will be hit with a fee upsurge of an average $0.30 per item. Granted, they’ll receive the benefit of faster FBA fulfilment. But sellers with items valued in the $10 – $11.99 range will lose their current discounted rate.

This significant change instigates a reflection on multiple potential strategies for impacted U.S. Sellers. Moreover, it’s prudent for UK sellers to pay close attention, in case Amazon introduces a similar scheme here:

1. Accept the fee upsurge and adapt to work within narrower profit margins.

2. Rethink your packaging strategy and switch to a smaller size tier. This move would allow more units per pallet and help reduce shipping and storage costs.

3. Adjust your prices upwards in an attempt to cover the cost increases.

4. Decrease your prices to align with any new low-price threshold.

In an ecommerce world where change is the only constant, staying agile, adaptable and informed is vital. Monitoring these changes and adjusting your strategies accordingly can make all the difference in maintaining a successful Amazon business.

At The Uncommon Practice, our accountants are happy to advise different types of ecommerce business, from subscription, dropship, wholesale models, to private label, p-commerce, or m-commerce businesses. Some of our team even have their own ecommerce businesses, so we really do practise what we preach.

Get in touch with us today to find out how we can support your ecommerce business.