Update to Amazon Europe referral and FBA fees starting March 1

#21

This has just come through , don’t know if it’s related ?! Possibly changing the total they are charging vat on (uk total vs eu sales total ?!)

We’re updating the European VAT Calculation Services Methodology policy to apply Business-to-Business (B2B) product-specific VAT calculations to certain types of listings across Amazon’s European stores.

Following the introduction of the EU B2B product specific VAT calculations, effective February 7, 2023, we’ll apply the product-related domestic reverse charge (0% VAT) to sales that meet the following conditions:

• Sale of electronic items subject to the product-related domestic reverse charge. These vary by country but typically include cell phones, computer chips, e-readers, laptop computers, tablet computers or video game consoles
• Domestic B2B sale
• Shipment value is above applicable thresholds (generally around EUR 5,000)
• Sale occurs in United Kingdom, Germany, Romania, Czech Republic, Austria, Denmark or Latvia

#22

So you acknowledge that fuel prices, inflationary pressure, and Covid have presented challenges to you, but somehow you seem to think that us sellers live in some kind of fantasy world where these things don’t affect us.

You also don’t seem to understand that concerns about recession are more likely to affect individuals of small businesses who can’t put bread on the table, rather than large multi-nationals who made an absolute killing during Covid and who’s main concern seems to be upsetting their shareholders.

Since you expect us to constantly absorb costs and push our prices down, shouldn’t you be leading by example?

Oh I can wait to see this one…

The last time Amazon had an amazing service was about a decade ago when SS was based in Dublin and common sense prevailed. Are we to expect a return to that?

#23

For someone looking in to FBA and has run successful businesses before, am I missing something?
Maybe because I’ve just started looking over past few days, but is there a definitive list of fees?

#24

I think all of them are listed here with links to more detail:
https://sellercentral.amazon.co.uk/help/hub/reference/G201074400

#25

Thanks for that.
I did look at something like that but it’s not very reader friendly?
Example…
Dog boomer ball, selling at £11.28
The revenue calculator suggests a cost per unit of £6.80 to Amazon, leaving a profit of £4.48. It’s good of them to be honest.
Out of the £4.48 will come your cost for buying the product, shipping, etc.
I’m trying to work out if it’s better to start by selling low cost items in high volume, or higher cost items at low volume.
Any advice appreciated :slight_smile:

#26

Just remember that the revenue calculator assumes 20% VAT on the sale price which won’t be the case if you aren’t VAT registered so you can change that to zero. It doesn’t though show the 20% VAT on their fees which you do pay.

#27

Many thanks

#28

Why would increasing your prices be a pricing violation, if it’s your product, you should have full control of how much you charge and want for it. Now when it comes to small and light, then the max you can charge is £10 instead of £9 when they increase it soon. If you want to charge more you will have higher fees as it will not meet the small and light guidelines.

#29

There are lots of threads about this. Amazon has a maximum price cap normally based on the list price from when the product was launched or prices that the bots have found somewhere on the internet.

If you go above the price they have calculated they will remove your listing and give you a pricing violation.

Nearly everyone on here agrees with that.

#30

I’ve never had any issues with the pricing violations, but then I’m my own brand so no others are selling the same branded item.

#31

Even if it’s your own branded product, with no other sellers, they still pull the listing if the bots think the price has changed too significantly.

You can still see “Featured Offer ineligible” on the Pricing Health dashboard for items where you are the only seller.

#32

Just to highlight something else to consider.
The FBA fees aren’t really just going up by the published amounts due to how the referral fees are calculated.

Since everyone will need to put their prices up, or absorb the costs, the referral fees collected will also increase (although they’re now calculating them VAT exclusive, if you’re using the VAT calculation service).

e.g. (Very Simplified Example)

Previous Price £12.00 @ 10% Referral Fee

  • Referral Fee = £1.20
  • FBA Fee = £2.00
  • VAT Due = £2.00
  • Return = £6.80

New Price £13.00 @ 10% Referral Fee (NOT on the VAT Calc Service / Not VAT Registered)

  • Referral Fee = £1.30
  • FBA Fee @ £3.00
  • VAT Due = £2.17
  • Return = £6.53

New Price £13.00 @ 10% Referral Fee (ON the VAT Calc Service)

  • Referral Fee = £1.09
  • FBA Fee @ £3.00
  • VAT Due = £2.17
  • Return = £6.74

So everyone will probably need to put their prices up by more than just the Fee increases just to make the same return.

#33

3 times I have been given a pricing violation and I am the only person selling the product online. I stopped asking for help and just deleted the products which worked out that well that I removed the entire range and brought it to another sales channel were I am selling four times as much there as I was on Amazon.

#34

Small and light up by over 20%… yes small increase. It is getting increasingly more difficult to eek out the ability to borrow money to live on.

#35

Where do you see they’re calculating the referral fee on VAT exclusive sales price? It’s still the gross for me (VAT registered & using Amazon’s service).

#36

VAT Calculation Service methodology change

Effective June 30, 2023, we will change how we charge referral fees for sellers who use the VAT Calculation Service.

We will start applying the referral fee percentage on the item list price that you provide, instead of the total sales price that’s paid by the buyer. This change does not apply to promotions, including Lightning Deals, vouchers or coupons, buy one, get one free and money-off, Amazon-funded discounts and Prime Exclusive Discounts. For promotions, we’ll continue to charge referral fees on the total sales price that’s paid by buyers.

The total sales price that’s paid by the buyer can vary from the item list price if you use the VAT Calculation Service, depending on the type of transaction and customer. An example is the business-to-business, intra-community supply of goods with a 0% VAT rate, examples of which you can see below. This change will lead to more predictable referral fees.

It doesn’t mean they’ll charge less fee on every sale. It’s mainly related to cross-border transactions.
And it’s counter intuitive anyway, they’re saying for consumer purchases they’ll charge based on the VAT rate of the dispatching country, and for B2B they’ll charge based on the rate of the destination country.

How that’ll work for UK -> EU transactions… Who knows?
None of the examples cover that.

Either way, it’s only effective from 30th June 2023

#37

Moderate? Are you sure?

I sell a range of perlite, a light product, most commonly sold in 10 litre bags.

Previous FBA fee was £3.12 (inc Surcharge)
New FBA Fee is £5.38
To maintain margins the total price to customer has to increase by £3.12
£5.38-£3.12 = £2.26
£2.26 x 1.2 (for Vat) =£2.71
£2.71 x 1.15 referal fee = £3.12
This product typically sells for £10, so the customer price now goes up to £13.12, a whopping 31%. Not my idea of moderate.

I can send this out direct myself for £2.25 via Yodel on a 2-3 day service and save on inbound costs.

It’s pretty obvious what the solution is here, products like these are being priced out via FBA.

#38

someone else mentioned its likely they are trying to phase these out as what’s the point of loading a vehicle with those size parcels at the same price when you can have heavier ones, half the size and therefore twice as many
I believe many other couriers also use dimensional weights

#39

I’m not fundamentally against dimensional weight, i think using weight as a proxy can also be pretty unfair. The pricing should be more aligned to a set price per delivery. I think they have the mix wrong.

When it comes to delivery via transit vans, the capacity limit is the number of drops a driver can do, not what they can physcially load onto the vehicle.

#40

not necessarily , they may have multiple parcels to deliver to one address