As an e-commerce seller, you may have heard the news that Amazon is retiring its Small and Light program. This program has been a go-to option for sellers who specialize in small, cheap, and lightweight products. The program allowed sellers to enjoy reduced fulfillment costs, enabling them to pass on the savings to their customers. However, on June 29, 2023, Amazon announced that they will be discontinuing the Small and Light program in the United States, with the closure set for August 29, 2023. This decision has left many sellers wondering about the implications for their businesses and what the future holds for their low-priced product offerings on Amazon.
In this article, we will explore the Amazon Small and Light program in detail, the reasons behind its discontinuation, and Amazon’s plans moving forward. We will also delve into the new low-price FBA rates that Amazon is introducing as a replacement for the Small and Light program. So, let’s bid farewell to the Small and Light program and dive into the exciting changes that await sellers in the world of Amazon FBA.
What was the Amazon Small and Light Program?
The Amazon Small and Light program has been a cost-cutting initiative that aimed to reduce fulfillment costs for sellers, allowing them to offer competitive prices on small, cheap, and fast-moving products. To be eligible for the program, products had to meet specific criteria, including:
- Weighing 3 lbs or less
- Measuring 18 x 14 x 8 inches or less
- Costing less than $12
- Being in brand new condition
- Having sold at least 25 units in the past month for products with existing ASIN
The Small and Light program offered several advantages to sellers. Firstly, it provided lower fulfillment costs, enabling sellers to increase their profit margins or offer their products at a more competitive price. Secondly, products enrolled in the program became Prime-eligible, allowing sellers to tap into the vast customer base of Amazon Prime members. However, it’s worth noting that the program also had its drawbacks, including slightly slower shipping speeds compared to standard FBA and limitations on product eligibility.
The End of an Era: Why Did Amazon Choose to Discontinue Small and Light?
Amazon’s decision to retire the Small and Light program stems from valuable insights gained over the years. The e-commerce giant recognized the importance of lower fees for sellers and the need to provide fast shipping speeds that customers value. As a result, Amazon made the strategic decision to end the Small and Light program and introduce new low-price FBA rates for all low-priced products.
The primary reason behind this change is to make it easier for sellers to fulfill orders while paying lower FBA fees. By lowering the shipping rates for all items priced below $10, Amazon aims to accommodate faster delivery speeds that customers love. This strategic move aligns with the evolving preferences of customers, as evidenced by research showing a decreasing percentage of customers abandoning their purchases due to slow shipping speeds.
Advantages and Disadvantages of Amazon Small and Light
The Small and Light program offered several advantages to sellers, making it a popular choice for those selling low-priced products. One of the most significant advantages was the savings it generated for both sellers and customers. By reducing fulfillment costs, sellers could lower their prices, making their products more appealing to buyers. For example, if a seller sold 1,000 units of a product in a month and saved $1.18 on shipping costs per unit, that would result in savings of over $1,000.
Additionally, products enrolled in the Small and Light program became Prime-eligible, which opened up new opportunities to reach Amazon’s vast Prime customer base. Sellers could take advantage of the Prime badge to attract buyers and increase their sales.
However, the Small and Light program also had its disadvantages. One drawback was the slightly slower shipping speeds compared to standard FBA. While products enrolled in the program still qualified for Prime, the shipping time for these items ranged from 3 to 5 business days, as opposed to the standard 2-day Prime shipping guarantee. This delay in shipping could potentially affect customer satisfaction and impact overall sales.
Another disadvantage was the strict eligibility requirements for the program. Products had to meet specific criteria, including size, weight, and price limitations. This meant that not all products could qualify for the program, limiting the scope of its benefits for sellers.
The New Era: Introducing Low-Price FBA Rates
As Amazon bids farewell to the Small and Light program, it welcomes a new era with the introduction of low-price FBA rates. The new rates aim to provide sellers with reduced fulfillment costs for all low-priced products, ensuring fast delivery speeds that customers expect. The transition to the new rates will be seamless for existing sellers, as eligible products will automatically receive the low-price rates without any additional action required.
Under the new low-price FBA rates, items priced below $10 will benefit from reduced fulfillment fees. This change allows sellers to continue offering their low-priced products at competitive prices while maintaining fast shipping speeds. The rates for low-priced products will be approximately $0.77 lower per item compared to the current FBA rates for these products.
For sellers who were previously enrolled in Small and Light and had products priced below $10, there will be a slight increase of approximately $0.30 per item compared to the Small and Light rates. However, the benefit of faster FBA fulfillment speeds outweighs this minor increase in fees.
On the other hand, sellers whose products were not enrolled in Small and Light and are priced below $10 will enjoy a reduction of approximately $0.77 per item. This means that sellers can still offer their low-priced products at competitive prices while benefiting from the faster FBA fulfillment speeds.
It’s important to note that products priced above $10 will automatically have the standard FBA rates and shipping speeds applied.
How to Prepare for the Transition
As a seller, it’s crucial to prepare for the transition from the Small and Light program to the new low-price FBA rates. Amazon understands that program and fee changes can impact businesses, and they provide sellers with approximately two months to prepare before the new rates take effect and the Small and Light program ceases operations.
To ensure a smooth transition, Amazon recommends the following steps:
- Review Your Product Offerings: Take a close look at your product catalog and assess which items are priced below $10. This will help you understand how the new low-price FBA rates will impact your fulfillment costs and adjust your pricing strategy accordingly.
- Check Your Inventory Status: Evaluate your inventory levels for low-priced products and determine if any adjustments or restocking are necessary to meet customer demand.
- Familiarize Yourself with the Updated FBA Rates: Understand the new low-price FBA rates and how they compare to the current rates for your low-priced products. This knowledge will enable you to make informed decisions about pricing and profitability.
By following these steps, you can ensure a smooth transition to the new low-price FBA rates and continue offering your low-priced products with fast shipping speeds.
The retirement of the Amazon Small and Light program may mark the end of an era, but it also ushers in an exciting new chapter for sellers on Amazon. With the introduction of low-price FBA rates, sellers can still enjoy reduced fulfillment costs for their low-priced products while providing the fast shipping speeds that customers expect. The new rates offer a balance between cost savings and customer satisfaction, ensuring that sellers can remain competitive in the ever-evolving e-commerce landscape.
As a seller, it’s essential to embrace these changes and adapt your strategies accordingly. Review your product offerings, assess your inventory status, and familiarize yourself with the updated FBA rates to make the most of this transition. Embrace the opportunities that the new low-price FBA rates bring and continue to thrive in the world of Amazon selling.
Remember, change is inevitable in the world of e-commerce, and it’s those who are willing to adapt and embrace new opportunities that will succeed. So, bid farewell to the Small and Light program and say hello to the new era of low-price FBA rates on Amazon. Happy selling!