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Monday, July 10, 2006

Amazon shipping reimbursement changes

The seller community is abuzz about the imminent shipping reimbursement changes at Amazon. The changes are below and speak for themselves. The one thing that is clear is that Amazon is hoping to push sellers away from offering expedited and international listings. This may be a move to boost it's own listings for this type of consumer, or more likely, its Amazon Prime base.

Regular shipping ($2.29, old $2.26, +0.03)
Expedited shipping ($4.79, old $5.05, -0.26)
International shipping ($8.59, old $8.95, -0.36)

Let's say you do not ship internationally, but do ship expedited. Take a look back at your sales if 1 in 10 sales or less is expedited, then you will actually gain from this change.

Let's say you offer both expedited and international. This is trickier hypothetically, because the offer a different net change. Let's assume an average of -0.31. In this case if 1 in 12 sales or less is expedited or international, then you will gain.

I am not sure how many people actually fail into this category, but it seems like a tough benchmark to hit. I move about 1 in 7 expedited or international. Maybe Amazon will get many of us to move away from these two "optional" shipping offerings.
I think everyone is kind of floored that Amazon is trying to make things even more confusing in this regard. On the face of it, it seems like sellers are getting a raw deal .... and we may be (actually it will probably end up being the consumer, like the Thinking Mother).