When you’re making your business plan, you need to include Amazon’s fees in as a product cost. If you’re selling goods in the $25-100 range, it’s not a problem. But if you want to sell goods that are below $10, the referral fees can be a real issue, and can even stop you making a profit at all.
But the Small and Light Program offers you reduced fees if your product is both low priced and small and light. That could make all the difference if, for instance, you want to sell a pencil sharpener worth $9.99 or a key fob worth $7.
Let’s look at the details. To qualify, your product needs to fit all these criteria:
• weighing in at less than 3 lb
• measuring a maximum 18 x 14 x 8 inches
• priced at $10 or less. (If at some point you raise the price above $10 Amazon will automatically remove the item from the Small and Light program.)
(The scheme also applies only to products sold new, so it’s not appropriate for anyone selling pre-used items.)
As usual with Amazon there are a few exclusions. First of all, if a product is prohibited on Amazon, you can’t use the Small & Light program to sell it either. That’s pretty obvious. Also excluded are
• restricted products and adult products,
• hazardous materials, and
• temperature-sensitive products.
If it’s going to melt when the temperature goes up, you can’t sell it on Small & Light. (That’s sensible from Amazon’s point of view, as temperature controlled warehouses cost much more to maintain.)
However, fragile items are okay. You can sell glass and other crushable or fragile items under this program, as long as they are properly packed, for instance in bubble wrap.
The size of discounts is not huge. For instance, for a small standard item weighing less than 6 ounces, you’ll pay $2.47 instead of $3.07. For a large standard item weighing 2-3 lb, you’ll pay $5.19 instead of $6.08.
But considering your item is priced at less than $10, that could make a big difference. For instance, if you’re selling at $9.99, and your product cost including shipping to Amazon is $5, You’re making $2.52 instead of $1.92 – 31% more profit.
For larger items, though, the fees still don’t leave much room for profit.
If you have created multi-packs or bundled packs of small consumables in order to make your product profitable, this program opens up the possibility of offering smaller packs or single items at a profit. Perhaps no one will ever order a single candy bar on Amazon, but an artist might well order a single paintbrush or palette knife.
If you sell a product such as an aromatherapy oil diffuser, for instance, the Small & Light program would be admirably suited to offering further small bottles of aromatherapy oils. Quite a lot of such bottles currently sell around $11, but you could gain market share and sales, as well as getting an equal amount of profit, by cutting your price to $9.99. Suddenly, you have a nicely profitable sideline, which you can sell under your own brand.
We’re not going to put a complete list of prices here, since it’s pretty complex. You’ll need to check exactly the weight and dimensions of your product against the table. Also, Amazon does change details from time to time, so it’s always best to refer straight to Seller Central.
You can check the fees on Amazon’s page https://sell.amazon.com/pricing#fulfillment-fees. The fees for the Small & Light program are about half way down the page.