Amazon has announced a forthcoming reduction in referral fees for sellers of lower-priced apparel items. According to a recent blog post by the company, this change is set to take effect on January 15.
Under the new fee structure, items priced under $15 will see a referral fee reduction from the current 17% to 5%. For apparel items priced between $15 and $20, the referral fee will be reduced from 17% to 10%. The fees for other items will remain unchanged, as detailed in the company’s announcement.
Dharmesh Mehta, Amazon’s Vice President of Worldwide Selling Partner Services, explained that the adjustment in fees aims to better align the costs for sellers with Amazon’s underlying costs and to offer sellers more flexibility in using Amazon’s services.
The announcement also clarified that the existing returns processing fees for apparel and footwear will generally remain the same. However, starting June 1 next year, Amazon plans to increase the returns processing fee for products with the highest return rates in their respective categories.
This move follows Amazon’s recent decision to step back from selling apparel in physical stores, as evidenced by the closure of its two Amazon Style stores in November. Meanwhile, the company continues to open some grocery stores while closing stand-alone bookstores and other non-grocery brick-and-mortar retail outlets.
In the context of the competitive e-commerce landscape, Shein, another e-commerce giant, overtook Amazon in 2021 as the largest fast-fashion retailer in the U.S. by sales, as reported by Earnest Analytics. Shein also surpassed Amazon as the top downloaded U.S. e-commerce app two months prior to this report.
Mehta commented on the impact of these changes on seller fees, anticipating an average increase of $0.15 in fees per unit sold, which he noted is less than the increases announced by other logistics providers. He also expects that many sellers will experience a decrease in the average fees paid per unit sold to Amazon.
Additionally, Amazon has revised the pricing structure for Vine, its invitation-only review program. The new fee tiers will apply to products enrolled in Vine after October 19 of this year.
Furthermore, the company announced enhancements to its U.S. Fulfilled By Amazon New Selection program. Effective March 1, the program will offer an average 10% rebate on sales of eligible new-to-Fulfilled-By-Amazon parent products.
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