The E-commerce giant, Amazon, announced changes in referral fees for third-party sellers in three major categories. Our e-commerce web design Beverly Hills agency has the details about its effect on the industry.
Amazon currently charges its clothing and accessories sellers 15% of the total sales price, but this will increase to 17%. Beginning April 15, 2018, this 2% increase will dig into the profit margins of both major and small vendors. This will make the apparel category the most costly to sell on Amazon’s marketplace.
The changes will also extend to the handbags & sunglasses category, with the difference that items priced under $75 will be charged 15% and any items above said price will be charged an 18% rate.
Some qualified jewelry items will get a temporary reduction. Sellers are currently paying 20% of the total sales price. This fee will remain the same for the first $250, but will be charged 5% for any amount exceeding that price. These changes will come to effect on February 22, 2018 and will continue until February 21, 2019. Amazon will revert the fees to 20% of the total sales price after this period.
Our E-commerce Web Design Beverly Hills Agency Sheds Light On The Reasons Behind This Decision
Fashion Industry studies have shown that 52.1% of online shoppers claim that they’ve bought clothing on Amazon. This is followed by 46.7% who claim that they purchased straight from the retailer’s website. Amazon has also been pushing their own private clothing offerings which have also seen fast and great growth in the later years.
This leaves apparel sellers in a tough spot as many work with Amazon to reap the benefits of the e-commerce leader’s extensive customer base, reputation, as well as research and exposure. Amazon is hopeful that sellers will stay despite the rise in fees. However, if sellers were to leave this would mean gaining a larger share of the apparel market.
When it comes to luxury items and jewelry, Amazon has found first-party selling rather challenging. Therefore the changes in fees for the jewelry category are a clear attempt to escalate the amount of higher-priced luxury on the site.
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