Amazon plans to reduce merchant referral fees for apparel items priced below $20.
In a Tuesday blog post, the company said referral fees for items priced under $15 will drop from 17% to 5%. The fees for items between $15 and $20 will drop from 17% to 10%. Referral fees for other items won’t change, according to the post.
The new, reduced fee structure begins Jan. 15. The changes allow Amazon “to more closely align fees for sellers with our underlying costs and also provide sellers with more choices for how they use our services,” Dharmesh Mehta, Amazon’s vice president of worldwide selling partner services, wrote in the announcement.
Amazon also said that existing returns processing fees for apparel and footwear will remain unchanged on average. Otherwise, the returns processing fee will expand next year, effective June 1, for products that have the highest return rates relative to other products in their category, the company said.
Amazon recently backed away from selling apparel in physical stores with the closure of its two Amazon Style stores in November. The retailer has continued to open some grocery stores but closed stand-alone bookstores and other brick-and-mortar non-grocery retail.
Rival e-commerce giant Shein claimed the title of largest fast-fashion retailer in the U.S. by sales in 2021, according to Earnest Analytics. Two months earlier, Shein also bumped Amazon from first place as the top downloaded U.S. e-commerce app.
“After these changes, we expect that sellers will see an average increase of $0.15 in fees per unit sold (which is significantly less than the increases announced by other logistics providers),” Mehta said. “However, we also expect that there will be many sellers who will see a decrease in the average fees paid to Amazon per unit sold.”
The changes Amazon announced this week also include a lower pricing structure for Vine, its invitation-only review program. New fee tiers apply to products enrolled in Vine after Oct. 19 of this year.
Amazon also said it will expand benefits as part of the U.S. Fulfilled By Amazon New Selection program, with the company providing an average 10% rebate on sales of eligible new-to-Fulfilled-By-Amazon parent products. These changes are set to begin March 1.
