Amazon Weekly News: March 6, 2018

Fee Hikes, External Traffic And FBA Australia

Each week I share the top news that impacts brands and merchants who sell on Amazon. My digest for this week includes big hikes to inventory storage fees, vendor access to Amazon influencers, new external traffic reporting for Store pages, and the FBA (Fulfilled By Amazon) service launching in Australia.

 

Price hike on FBA inventory storage fees

Amazon is moving from assessing Long-Term Storage fees on a semi-annual basis to a monthly basis. And the fees are ramping up by a hefty 6% on average.

Despite bringing a significant number of new fulfillment centers online in the past couple of years, Amazon still struggles with maintaining capacity in these buildings. They do not want sellers to be using their fulfillment centers as permanent warehouses. Increasing both the amount and frequency of the storage fees on overstocked inventory is one way of throttling supply.

What do brands need to know?

Meticulously track your inventory levels to ensure you maintain Goldilocks levels of inventory -- not too little and not too much -- in order to minimize storage fees. If you don’t have your own warehouse facility, work with a third-party logistics (3PL) company who can offer these services.

 

Amazon unveils external traffic metrics for Store pages

New metrics are now available for Amazon Stores, including daily visitors, page views, and attributed sales. Store pages (available to both vendors and sellers who are enrolled in the Brand Registry) have always provided access to basic analytics which tracked traffic volumes and basic sources of that traffic. But now, Amazon is reporting in much greater detail on which sources are driving the most page views and sales – traffic from Amazon, Headline Search Ads, or external sources (such as Facebook, Google and YouTube), which can be tracked with source tags.

What do brands need to know?

This is very exciting because it means that marketers and advertisers can finally calculate a clear ROI for driving outside traffic to Amazon. For example, a brand could initiate several Facebook ad campaign that sends visitors to their Store page, understand how each campaign converts individually, and ultimately compare it to other marketing channels within and outside of Amazon.

This is further confirmation that Amazon has and will reward efforts by brand marketers to drive external traffic to brand pages and product pages. Providing this data to merchants illustrates the increasing importance of this strategy form Amazon’s perspective, but also provides a way for more sophisticated brands (or at least those with marketing budgets) to compete in an increasingly competitive marketplace.

 

Vendors can access Amazon influencers with new promotional code features

Brands who are selling on the Vendor Central platform have some exciting new Promotional Code features to play with.

Now vendors can:

1. Share with influencers - Share your promo code with Amazon Associates and Amazon Influencers, who may refer customers to your promotion.

2. Offer multiple redemption options - Give customers the option of redeeming your promo code once, on multiple eligible items in one order, or in multiple checkouts.

3. Offer an extended time for promotions - Promo codes can now last up to 120 days.
 

What do brands need to know?

These new features are great for vendors who want to drive more traffic and buzz around their promotions. The option to share with influencers is particularly interesting - what brand doesn’t want more exposure? It’s great to see Amazon making the most out of their assets, including the associates and influencers who are already actively promoting products on Amazon to their audiences.
 

Amazon Launches FBA in Australia

Three months after Amazon’s launch in Australia, they finally opened the doors of their Melbourne Fulfillment Center to third-party marketplace sellers last week. This means that brands are able to take advantage of Amazon’s simple fulfillment service instead of arranging order deliveries with a 3PL or local carriers.

  Above: a   sign outside US retailer Amazon's 24,000-square-metre centre in Melbourne on November 23, 2017. Image Source: MAL FAIRCLOUGH/AFP/Getty Images

Above: a sign outside US retailer Amazon's 24,000-square-metre centre in Melbourne on November 23, 2017.
Image Source: MAL FAIRCLOUGH/AFP/Getty Images

The Amazon Australia website still has the message “Prime shipping is coming to Australia” which it launched with. This was a big gap in the offering initially launched in December 2017, and in my opinion, a large reason for the lukewarm response from Australian consumers so far. But Amazon also announced on Tuesday that its Prime subscription service is set to launch in Australia in mid-2018.

With a land mass that’s just 33% smaller than the U.S. but with a population of only 24 million, most commentators (including yours truly) declared that it would be impossible for Amazon to offer a free 2-day shipping option in Australia. While it remains to be seen what the eventual Prime shipping service looks like, the fees charged to merchants for FBA are pretty competitive, and since Amazon is discounting referral fees and FBA fees for a limited time, fulfillment is actually cheaper than the U.S.!

Here’s an example product, which is currently selling for $18.33 AUD on Amazon.com.au ($14.17 USD).

Australia referral fees: $1.65 AUD ($1.28 USD)

US referral fees: $2.13 USD

Australia FBA fees: $1.37 AUD ($1.06 USD)

US FBA fees: $3.21 USD
 

Amazon is also running an introductory promotion giving Australian sellers access to free storage and removals until 31st August 2018.

What do brands need to know?

Australia is a strategic new market for Amazon. It has a small but affluent population, paired with a relatively immature e-commerce market and logistics infrastructure. This makes for a great geographical market for Amazon to disrupt. Brands in North America and Europe often field questions from Australian customers about where to find their products but have avoided the market because of the relative cost and small opportunity there. This is the perfect moment to leverage Amazon’s logistics infrastructure and promotional fees to get a foothold in the Australian market.

 

This is all the news I have to share with you this week. Subscribe to our newsletter to make sure you receive my news recap next week!