Time to say goodbye to Amazon? We are seriously considering it
Been a large seller on Amazon since 2004 with sales reaching almost 5 million dollars a couple of years ago. But in the past couple of years, ever increasing fees, huge storage fees, the new inventory placement fees, the new low inventory fee, and abusive Amazon customers who inflict us huge losses due to their numerous and repeated buy, use, and returns, and Amazon's super lenient, almost stupid, return policy that encourages people to just order merchandise and return them for any reason or, in many cases, not even return and get free replacements at our expense is killing our business after almost 20 years. For many items we are now paying Amazon every time we sell one.
Just tonight I tried to make a new shipment of large standard items to be shipped to Amazon FBA. Total of 780 items. But the inventory placement fees are so huge that there is no way to justify sending this inventory to Amazon. Over $2,900 to send 780 items to 3 Amazon warehouses. And these are items that sell for an average price of $35. I doubt I will send large standard items to Amazon any longer and I know doing FBA will kill the items but so be it. We are not in business to just pay commissions and fees and advertising dollars to Amazon and lose money in the process.
I will increase our listings and promotions on eBay and concentrate on our own web site. It's been a tough road all along, but at least we were able to scrounge some profits. It is no longer possible.
Time to say goodbye to Amazon? We are seriously considering it
Been a large seller on Amazon since 2004 with sales reaching almost 5 million dollars a couple of years ago. But in the past couple of years, ever increasing fees, huge storage fees, the new inventory placement fees, the new low inventory fee, and abusive Amazon customers who inflict us huge losses due to their numerous and repeated buy, use, and returns, and Amazon's super lenient, almost stupid, return policy that encourages people to just order merchandise and return them for any reason or, in many cases, not even return and get free replacements at our expense is killing our business after almost 20 years. For many items we are now paying Amazon every time we sell one.
Just tonight I tried to make a new shipment of large standard items to be shipped to Amazon FBA. Total of 780 items. But the inventory placement fees are so huge that there is no way to justify sending this inventory to Amazon. Over $2,900 to send 780 items to 3 Amazon warehouses. And these are items that sell for an average price of $35. I doubt I will send large standard items to Amazon any longer and I know doing FBA will kill the items but so be it. We are not in business to just pay commissions and fees and advertising dollars to Amazon and lose money in the process.
I will increase our listings and promotions on eBay and concentrate on our own web site. It's been a tough road all along, but at least we were able to scrounge some profits. It is no longer possible.
124 replies
Seller_0Kea1ieMQZF8x
We initially only sold 5 products on Amazon and made a lot of money. Of course, we chose to continue expanding. We started selling over 80 products in 2021 and had 300 products by 2024.
Then Amazon closed our account under the guise of uploading counterfeit goods, causing us to lose $200000 in inventory. This makes us want to exit Amazon.
Dominic_Amazon
Hi @Seller_6nOhE4cHNHnq1,
I appreciate you sharing your thoughts here. I understand this can be a frustrating situation, however, please note that both fees are avoidable and actions can be taken so they are not applied.
A low-inventory-level fee will only apply if a product’s inventory level relative to historical demand (known as “historical days of supply”) is below 28 days. We will only charge a low-inventory-level fee when both the long-term historical days of supply (last 90 days) and short-term historical days of supply (last 30 days) are below 28 days (4 weeks). For example, if a product’s short-term historical days of supply is above 28 days but long-term historical days of supply is below 28 days, the low-inventory-level fee won’t apply.
For the Inbound Placement fee, if your shipping plan qualifies, you can use the partial shipment splits option or the Amazon-optimized shipment splits option. With these options, you pay a reduced fee or no fee for sending your inventory to multiple inbound locations across our network.
If you have any additional questions on either of these fees, please don't hesitate reaching out.
Thanks so much,
Dominic
Seller_6nOhE4cHNHnq1
With all due respect, I know about all options and there is no avoiding them. The amazon optimized shipment options are still very very expensive and have raised our cost considerably.
The low inventory fee can't be avoided either. Amazon penalizes us for sending too much inventory in form of high storage fees that triple at the end of the year and now we get penalize if we don't send enough. Things can go out of stock or take months for us to restock as we import from China. There is no way to do business profitable any longer on Amazon.
We just had a staff meeting this morning and I made it clear to our staff that we will be cutting more and more on items being sold on Amazon as we can not keep losing money just to keep Amazon customers happy.
I know these issues we bring up probably falls on deaf ears. What Amazon execs fail to understand is that 3rd party sellers only will continue doing business on Amazon if they can make money to make a living. We are not here for the pleasure of Amazon or its customers only. We are here to do that and make a profit at the same time. When one part of the equation no longer works, we have no choice but to cut. And it starts with cutting advertising and products and going elsewhere. 20 years ago, we came to Amazon from eBay. I am happy to say that we have started moving more and more items back to eBay and Walmart and sales are growing.
Seller_WAZNnMBpd99sI
Holy crappola!- just spit-ballin here, but don't ya think that taking 50% or more of every sale is just a mite-bit akin to the work of an illegal Monopoly?
A low-inventory-level fee
Inbound Placement fee
FBA Referral fee
FBA Fullfillment fee
FBA pick pack fee
FBA Service Fee:
Opaque bagging
Tape
Label
Bagging
Bubble wrap
FBA Monthly storage fee
FBA inbound freight cost fee (the % Amazon takes)
FBA Estimated Aged Inventory Surcharge
Returns processing fee
FBA removal order fees
FBA disposal order fees
oh Christmas- now let's think about advertising that Amazon promotes to all buyers so that everyone is encouraged to out-donate to Amazon for what used to be free- just so that your listing can be seen when someone types the EXACT Title or name into Amazon Search.
*Same strategy as Viktor Bout and other weapons smugglers... arm and up sell both sides of a conflict....
Seller_oDXVaydIpi3Hi
Awesome job proving no one at Amazon will ever get it.
Seller_2VhiChpzJicwq
Your answer seems like robot to me and does not resolve the issue Or help anything for the person here.
Seller_zinnr9HADdMb2
Hi Dominic,
I really did not want to reply but no, they are not! I spent over 4 hours last week trying to get out of shipping 4-6 boxes in various configurations and Amazon would not let us get out of the placement fees. Amazon warehouse does not work for over 95% of our product either due to the restrictions and fees there as well. Unless you are going to ship a pallet of each Child ASIN its just not worth it. I have been trying to figure out a way around these fees now for months. I have a masters degree in analytical Chemistry so numbers are my thing ;) Love to chat with you if you would be willing to talk with me. My Amazon account rep is Tanika and I am sure she could setup something between us. I am 100% on board with any suggestions you might have too. PLEASE HELP! Thanks, James
PS-We just did a 2 month analysis on all of our profits and Amazon used to get 34.45% on average for FBA and that is all in with fees, advertising, etc. Now its 49.23% for us over the last 3 months. fees fees fees and now more fees will push this into the 60% range I fear and at that point, we are done.
Seller_anTG62fMG7x6y
Same thought here, and I don't see any possibility that the fees are going to go down, it's going to keep going up until we get off Amazon as much and as fast as we can, and there's no way to see that it's going to stop. So we should plan first and not get a jump on our business.
If there is another business opportunity, just take it. Amazon is changing it's core business from business growth to charging method.
Seller_Qhr2UYIcDPs0Z
I'm on the same boat 7 figure seller here and I have lost half of my catalog this year due to the fee increases.
Seller_OaJzzRPa98Gd3
Amazon's arrogance has reached a point where it feels it has monopolized the e-commerce market and can arbitrarily impose costs on sellers. In the short term, Amazon may benefit, but in the long term, this is damaging to Amazon itself and is shortsighted. We are forced to pass these costs onto consumers or consider exiting Amazon. Now, besides Amazon, more and more e-commerce platforms are emerging and attracting sellers. Amazon can no longer afford to be an ostrich with its head buried in the sand.
Seller_W1tFzATWCqDHQ
They don't care. I believe their long term goal is to make us into TEMU with Chinese sellers dominating sales. Milking US sellers in the process.
Seller_M4NWRaRnU1uDM
this platform is becoming a disaster. I had to sit back and really think about it yesterday. Amazon has shown they do not care about its sellers, whatsoever.
The inbound placement fee is ridiculous. The low inventory fee? Another ridiculous thing. I just thought yesterday if I send a new product in and only send in 5 of them to see if they sell, if they sell quickly when I send in the next shipment I will automatically be hit with a low inventory fee (from the beginning). We do not even know how much we are making because they keep talking about these credits next month. The low inventory fee is so badly thought out and implemented. I just cannot help but think this platform is crumbling.
The seller support is so bad it is almost unfathomable.
Seller_QjYfjZwWH8D0l
Amen.
The useless entity they call Seller Support is worse than it's ever been. Opening cases is an exercise in futility. If I can't fix it myself, it's best to list the product elsewhere and move on.
Return policy abuse is also worsening. We keep raising prices to cover it, but that's not a sustainable solution.
I've never felt as negative about selling on Amazon as I do today. Like you, we are expanding our offerings on other platforms.
