For most Amazon sellers, the fourth quarter is when they expect to make most of their yearly income.
If you are like most Amazon sellers, you can expect a significant spike in your sales during the Christmas holiday season. In 2015, Amazon.com reported over $35.75 billion in sales during the 4th quarter sales in North America. Amazon’s total sales for the US and Canada in 2015 was $79.27 billion. As a result, over 45% of Amazon’s total sales occur during the fourth quarter.
Unfortunately, if you are a new Amazon FBA seller, the fourth quarter will be a real dud.
Recently, Amazon.com announced they were going to close their FBA program to new sellers during the fourth quarter of 2016. The reason they did this is to ensure timely shipping of FBA products to their Prime customers.
If you are a new Amazon seller and you have not completed your first shipment before October 10th, 2016, you will have to wait until December 19th to ship it to one of Amazon’s fulfillment centers. If this is your predicament, you are essentially going to miss selling using Fulfillment by Amazon during the Christmas season when most retailers make most of their yearly profits.
Amazon restricts many Amazon FBA sellers from selling toys and games during the Christmas season.
In 2015, Amazon started restricting who could sell toys and games during the fourth quarter.
Under Amazon’s new guidelines for selling toys and games during the Christmas season, you will not be able to sell toys and games from November 17th until the end of the first week of January unless you fulfill the following criteria.
- You must have processed and shipped at least 25 orders from September 1 through October 31st. The orders do not need to be specific to the Toys store.
- Your pre-fulfillment cancel rate must be no greater than 1.75% from October 1 through October 31st.
- Your late shipment rate must be no greater than 4% from October 1st through October 31st.
- Your order defect rate must be no greater than 1% short term as of November 1st.
Expect some FBA fees to be higher and some to be lower during the fourth quarter.
Amazon’s FBA monthly storage fees are reduced 25% during the month of October and triple during November and December.
The reason why Amazon is decreasing storage fees in October is to encourage more sellers to sell their products using Fulfillment by Amazon (FBA) during the holiday season. Amazon prefers sellers to use FBA because they have better control of shipping and customer service. They also know their Prime members prefer buying products fulfilled by Amazon.
Amazon triples storage fees in November and December to discourage sellers from storing slow-moving items during their most busy season. During the 4th quarter, Amazon’s warehouses are crammed to the rafters. As a result, and they want to reserve warehouse space for popular, fast-moving items.
The following a link to Amazon that describes the changes in FBA monthly storage fees during the fourth quarter. (https://www.amazon.com/gp/help/customer/display.html?nodeId=201648210)
Amazon reduces FBA weight handling fees 10 – 25% during November and December.
Amazon is reducing weight handling fees to offset their increase in storage fees during November and December. The main intention of Amazon’s reduced weight handling fees is to encourage sellers to use fulfillment by Amazon.
It is important to realize that you get a reduction in weight handling fees only when you sell an item and ship it out of one of Amazon’s fulfillment centers.
The following a link to Amazon that describes the changes in FBA weight handling fees during the fourth quarter.
Amazon adds a five cent service fee if you fail to provide box content information when you send items to their fulfillment centers during November and December.
During the months of January to October, Amazon charges a ten cent service fee for every unit when your shipping box arrives without the proper content information. This fee jumps to fifteen cents during the months of November and December.
Amazon will start charging this added fee starting November 1st, 2016. The reason they are doing this is to increase the efficiency and accuracy of processing incoming shipments to their fulfillment centers. They are charging a higher fee in November and December because their warehouses will be swamped by incoming products and their need for efficiency will be very acute.
The following is a link to get Amazon’s Box Content Shipping Requirements.
In summary, if you are selling on Amazon FBA, Amazon’s 4th quarter fee changes and selling restrictions may be good or bad for your business, depending on your circumstances.
If you are a new seller on Amazon and have not already shipped your inventory to one of Amazon’s fulfillment centers, you will not be able to use fulfillment by until the beginning of next year. If this is your circumstance, you can still sell on Amazon during the holiday season using the Fulfillment by Merchant (FBM) program. Unfortunately, you will be at a significant disadvantage when you are competing with FBA sellers selling the same item that is eligible for free Prime two-day shipping.
New sellers that are locked out from selling during the 4th quarter on Amazon FBA can also choose to sell on eBay. The following are links to articles that will give you more information about selling on eBay.