E-Commerce Trends Ending of Amazon FBA Small & Light Program and Application of New Low-Price FBA Rates

Amazon announced that it will end its Small & Light program on August 29, 2023. Instead, the FBA rates of all low-price products will decrease. [1] There are several differences between the Small & Light program and the new low-price FBA rates. Let’s take a look at the items that must be checked by sellers who use the Small & Light program and who are considering launching new products and adjusting product prices.

Amazon FBA Small & Light Program Amazon’s Small & Light program started in 2015. It is a low-rate FBA program that can be selected when small-sized, light, and low-price products meet certain conditions.

The product requirements are as follows: less than $12, shipping weight of 3 pounds or lower, size equal to or less than 18 (length) X 14 (width) X 8 inches (height), and sales volume of the previous month, 25 or higher. ^[6]

1. Price: less than $12
2. Shipping weight: 3lb or lower
3. Product size: 18 (length) X 14 (width) X 8 inches (height) or lower
4. Sales volume of the previous month: 25 or higher

There is a difference in the time of FBA shipping and rates. The FBA prime shipping takes an average of 1-2 days, and Small & Light takes about 3-5 days. If a regular member orders a Small & Light product, not a prime member, the delivery period extends to 6-8 days.

1. Shipping time is slower than the standard FBA
   - Shipping days for Prime members: 3-5 days
   - Shipping days for regular members: 6-8 days

The biggest benefit of this program to sellers is the reduction of shipping costs. In the case of 4oz products, the charge for standard FBA is $3.22, and for Small & Light, it is $2.47. Small & Light was one of the options with big benefits to sellers. Small & Light is particularly appropriate for the delivery of consumer goods that are small, light and have short sales lead time. ^[6]

To Amazon sellers who use the FBA order processing service, Small & Light is also the same FBA service that provides the benefit of cost reduction. Some of the disadvantages of Small & Light are as follows. ^[6][7][8]

1. The shipping speed is slow.
2. If you are currently using the existing FBA service, you need to make a new listing with a separate barcode.
3. The application process of writing a template and uploading it is bothering.
4. Dangerous goods (harmful materials), breakable products, and products sensitive to temperature are inappropriate for the FBA Small & Light program.
5. The shipping of the FBA Small & Light program cannot use the FBA inventory placement service.
   - Inventory placement service: a service where a seller sends products to a designated fulfillment center, and Amazon disperses and dispatches them to fulfillment centers across the U.S.
6. There have been many inquiries regarding Small & Light such as wrong delivery and omitted delivery since the size of products is small.
7. It is a limited service only available in 10 countries including the US.
   - The US, the UK, Germany, Spain, France, Italy, Japan, the Netherlands, Sweden, and Poland

Amazon ends “Small & Light” and expands the reduction of costs for small-size, light items by decreasing low-price FBA rates Amazon did not concretely talk about the background of stopping “Small & Light.” However, Amazon did clearly indicate about the following 2 items:

1) Improvement of shipping speed, 2) Expansion of low charges for low-price products

Amazon said that it learned many things through its Small & Light program that provided low charges to sellers, such as how much customers value continuous improvements in Amazon’s shipping speed. Amazon said it will end its Small & Light program starting from August 29, 2023, and apply the lower FBA rates for all products below $10. ^[1]

This means that it will improve one of the program’s disadvantages, the shipping speed, and expand the benefit, lowering charges for low-price products. In order to meet these goals, it will end the Small & Light program and adopt low-price FBA rates, decreasing the rates for all products lower than $10.

1. Based on the sellers who previously used the Small & Light program: Low-price FBA rates apply, increasing the shipping speed, but the FBA charge increases by about $0.3. Also, the Amazon FBA service range expands to all countries. ^[1]
2. Based on the FBA sellers who did not use the Small & Light program: Low-price FBA rates apply, lowering the FBA charge by about $0.7 for products lower than $10. ^[1]

By adopting low-price FBA rates, sellers will be able to save logistics fees. They can now have many options to select from: they may increase their margins for the decreased logistics fees, strengthen marketing operations by increasing the advertisement budget, and increase cost-competitiveness by lowering product prices. New low-price FBA rates are cheaper than the standard FBA charge, and the reduction rate is higher for standard small-size products For sellers who could not use the Small & Light program, the biggest benefit of using low-price FBA rates is the reduction of costs.

FBA rates vary depending not only on the size and weight but also on product types. In the case of clothing and dangerous goods, there is a separate charge rate.

For general products (non-clothing and non-dangerous goods) with prices lower than $10, the new low-price FBA charges are about $0.77 lower than the standard FBA rates. However, for sellers who used the Small & Light program, the FBA charges increase by about $0.3 on average, as mentioned above, so they may find fees increasing. ^[1][2][3][4]

Find out about the changes in the current FBA costs for the products sold by each seller, based on the table that compares the FBA rates for general products.

The new low-price FBA rates decrease sellers’ costs for low-price products. If you are a seller preparing to sell products where the price is around the $10 range or launch products, you need to make advantageous decisions with the new FBA rates for your business by reviewing from various angles such as costs, product margins, and decision-making of consumers.

There may be many sellers who feel a little bit awkward about rates decreasing because it has been a while since Amazon reduced its charges. You should not be at ease even when the business environment gets a little better. The Back-to-School/College season is ongoing, and many peak seasons coming up: Autumn Prime Day, Black Friday, and Cyber Monday. Do not be prostrated by heat, take care of your health, and strengthen your foothold in the Amazon business. # References [1] Low-Price FBA rates to replace Small and Light on August 29 https://sellercentral.amazon.com/gp/headlines.html?id=GR7PC7B3U4ERU446
[2] Low-Price FBA fees https://sellercentral.amazon.com/help/hub/reference/GJTAVU7P2W2VE8Q9
[3] FBA Small and light program https://sellercentral.amazon.com/help/hub/reference/G201706140
[4] FBA fulfillment fee https://sellercentral.amazon.com/help/hub/reference/GPDC3KPYAGDTVDJP
[5] Small products, big potential https://sell.amazon.com/fulfillment-by-amazon/fba-small-and-light
[6] Small and Light, Reduce fulfillment costs with FBA Small and Light https://sellercentral.amazon.com/gp/ssof/workflow/upload/upload-uno-offer-enrollment.html
[7] Small and Light prep and packaging guide https://sellercentral.amazon.com/help/hub/reference/GCFL9GA7ZXSRS6RL
[8] Amazon Is Retiring The Small and Light Program: What You Need to Know https://www.ecomcrew.com/amazon-small-and-light/

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