Fees going up.....again!


#1

Fee changes in the UK following introduction of the Digital Services Tax

In spring of 2020, the UK government introduced a Digital Services Tax (“DST”). While the legislation was being passed, and as we continued our discussions with the government to encourage them to take an approach that would not impact our selling partners, we absorbed this cost.

Now that the legislation has passed, we want to inform you that we will be adjusting referral fees, Fulfilment by Amazon (FBA) fees, monthly FBA storage fees, and Multichannel Fulfilment (MCF) fees in the UK to reflect this additional cost. We will not apply the increased charges retroactively, but starting 1 September 2020, the above fee types will increase by 2%.

What is the UK Digital Services Tax?

The UK government introduced a 2% tax on the revenues of large multinational enterprises generated from the provision of search engines, social media platforms, and online marketplaces, which derive value from UK users. See here for more information.

How much will fees increase?

Referral fees, Fulfilment by Amazon (FBA) fees, monthly FBA Storage fees, and Multichannel Fulfilment (MCF) fees in the UK will increase by 2%.

To calculate the increase on fees that are a cash value (for example, FBA fulfilment, MCF, and storage fees), you should add 2% on to the cash value. For example, a £2.27 fulfilment fee becomes £2.32 (£2.27 + 2% = £2.32).

To calculate the increase on referral fees rates that are percentage based, you should add 2% to the absolute fee amount. For example, a 15% referral fee on a product sold for £100 would currently equate to £15. As of 1 September 2020, this will increase by 2% or £0.30 to become £15.30, or the equivalent of a 15.3% fee rate. Please note that the increase is not an increase of 2 percentage points.

Which fees are being increased?

The following fee types are being increased in the UK starting 1 September 2020:

  • Referral fees: These are calculated as a percentage of each ordered product’s gross sales proceeds. The increase will be applied to referral fees across all categories, including fee promotions, for items sold on Amazon.co.uk.

Example: On an item for which the referral fee on Amazon.co.uk is currently 15.0%, you will pay a fee of 15.3% starting 1 September 2020.

  • FBA fulfilment fees: FBA fulfilment fees are a flat fee that you pay per unit shipped using FBA, based on the product type, its dimensions and its weight. The increase will be applied to the UK rates on all envelope and parcel sizes (including oversize) for domestic FBA, Pan European FBA, Cross-border (European Fulfilment Network), and Small and Light.

Example: For a parcel with a current UK domestic rate of £2.27 (standard parcel, less than 0.5 kg), you will pay a fee of £2.32 starting 1 September 2020.

  • Monthly FBA storage fees: Monthly storage fees are calculated based on the space you use to store your items in an Amazon Fulfilment Centre. The storage fee is based on the daily average volume in cubic feet per month and varies between low season (January to September) and high season (October to December). The increase will be applied to the UK rates across all categories, standard size, oversize, and low and high season rates. Long term storage fees will not be increased at this time.

Example: For the standard size storage rate in the UK, which is currently £0.65 per cubic foot per month, you will pay a fee of £0.66 per cubic foot per month starting 1 September 2020.

  • Multichannel Fulfilment (MCF) fees: MCF fees are charged to fulfil orders from other websites using inventory stores in our fulfilment centres. The increase will be applied to the UK rates on all envelope and parcel sizes (including oversize) for domestic FBA, multichannel inventory (MCI), Pan European and Cross-border (European Fulfilment Network) shipments, for both standard and expedited services.

Example: A parcel with a current rate of £4.00 (standard parcel, less than 0.5 kg), you will pay a fee of £4.08 starting 1 September 2020.

Unless the fee type is stated above, it will not be subject to the 2% increase at this time.

If the monthly FBA storage fees are being increased starting 1 September 2020, when will I see the increase in my invoice?

The increased inventory storage fee for September will appear on your October invoice, which will be raised between 7 October and 15 October. Learn more about storage fee invoicing dates [here]


Introduction of the new Digital Services Tax
#2

You’re " lucky" :wink: we had this message a year ago in France.
1 August 2019

Upcoming referral fee changes on Amazon.fr

Following the creation of a 3% digital services tax in France, we would like to inform you that we will have to adjust our referral fee rates on Amazon.fr to reflect this additional cost. Starting October 1, 2019, the referral fee on sales that occur on Amazon.fr will increase by 3%. For example, on an item for which the referral fee is currently 15%, you will pay a fee of 15.45% from October 1, 2019.

Additional examples:
• On an item for which the total sales price is €100, and the current referral fee rate is 15%, your referral fee rate starting October 1, 2019 will be 15.45%, and the referral fee you pay will be €15.45 (calculated as 15.45% of €100).
• On an item for which the total sales price is €100, and the current referral fee rate is 12%, your referral fee rate starting October 1, 2019 will be 12.36%, and the referral fee you pay will be €12.36 (calculated as 12.36% of €100).

For more information about these upcoming changes, including fee schedules, definitions and examples, refer to the Selling on Amazon Fee Schedule:

https://sellercentral-europe.amazon.com/gp/help/help.html?itemID=F9K4BWLZXRPC62U&language=en_GB&ref=id_F9K4BWLZXRPC62U_cont_200336920


#3

Yea I have not worked it out but we have been moving more and more to fba and think this is going to be around an extra 300 a month for us, then if that other 2% comes in that the government has been talking about for next year :sob:


#4

You pay Amazon 15,000 a month in fees?? :open_mouth:

I really am small fry :joy:


#5

Our average fulfilment and referral fee is around 4.20 excluding vat and average monthly units sold are 2000-2300 usually obviously odd up and down but that with storage fees it’s not going to be a couple hundred :roll_eyes:

Unless I’m been thick and have not read that increase properly which would not surprise me lol


#6

they put the fees up think it was the beginning of this year in electronics, from 12% to 15% If I remember rightly, now another increase,

I think what makes me laugh with this is that the government charges amazon more tax due to their lack of vat payments to HMRC however amazon simply take it from the sellers, so it’s ultimately us poor souls that end up having to pay it,
it’s not on,.


#7

Yea they never take a hit it’s us we sell in a couple of catagories and we do alright from amazon don’t get me wrong but there’s not great margins on a lot of our items an when you see that word increase your like FGS.


#8

One thing I came to realise is you should never ever put all your eggs in the amazon basket, very volatile company and they have no qualms in suspending sellers on the say so of 1 buyer, irrelevant how many years you have traded here.
FBA fees have risen and risen and risen, the FVF in my category is higher than anywhere else…

ebay will probably be next I expect,


#9

Totally agree with you there


#10

I just saw this :frowning: as I thought it would effect my own website but then I saw…

The Digital Services Tax will apply to businesses that provide a social media platform, search engine or an online marketplace to UK users. These businesses will be liable to Digital Services Tax when the group’s worldwide revenues from these digital activities are more than £500m and more than £25m of these revenues are derived from UK users.

Thankfully I’m a little below the £500m threshold :sunglasses:


#11

Yep - we all get properly shafted yet again. It’s not a coincidence that our Jeff is wealthiest man on planet Earth. The UK government were supposed to be implementing this additional tax to reflect the disparity between where profits are taxed versus where the value is created. (FAIL)

Bottom line is, we all end up paying 2% more to Amazon to cover it on their behalf - AND they’ll likely find another loophole to hang onto it rather than pass it on to HMRC. I think it’s called ‘trickle down shafting’ :joy:


#12

Exactly… It doesn’t make sense at all! Poor Amazon though who “absorbed this cost while they were having discussion with the government” … :roll_eyes:


#13

It will effect your business if you sell on Amazon as your selling fees will go up !


#14

I didn’t say that, what I said was… as I thought it would effect my own website but then I saw…

Meaning that I would have to inform or pay the Digital Services Tax to HMRC somehow.


#15

Does anyone remember being asked by the government on whether we agree with this tax or not?


#16

I don’t agree with any taxation but I don’t think the government will give a hoot and I certainly wasn’t asked.


#17

@Jackie1 - nothing wrong with being “small fry” :smiley: It all adds up over time


#18

It sure does every penny counts we started of small from dropshipping and little wholesale originally and would still class our self’s as small we do a OK don’t make enough to sip champagne on a weekend just vodka 6 night s a week lol.

We only started adding our products to amazon 2 year back and we keep adding more and it is good takes som getting used to and the fees take a big chunk but the volumes make it worth while


#19

This is Amazon giving the finger to the UK government.

The DST was supposed to be a tax on the (In this instance) marketplace, not on the seller, and therefore probably ultimately the product purchaser. There is little doubt that Amazon used this action as a negotiating position when talking to the government and now they are simply saying ‘We told you what would happen’.


#20

Eh… for anyone saying you will absorb Amazon’s tax avoidance… that’s your choice, nothing stopping you from passing it on to the next user as they have done!