As announced in the fourth quarter of 2012, Amazon.Com has officially launched its new commission structure on Electronics Accessories. It’s a bold move from Amazon.Com that will increase it’s revenue on millions of products by an additional 7%.
Initial discussions in the forums and posts online are mixed and large volume sellers who rely on automated pricing are suffering losses and pricing issues that are nearly impossible to resolve quickly.
The updated fee schedule posted on Amazon.Com states the following fees, effective January 15th 2013:
- 15% for the portion of the item price and any gift wrap charges paid by the buyer, up to $100 (with a minimum referral fee of $1.00*); and
- 8% for any portion of the item price and any gift wrap charges paid by the buyer, greater than $100
So what exactly is Amazon considering an “electronic accessory”? According to the Help Page, you find the following items:
|Audio & Video Accessories||Headphones, Universal Remotes, HDMI Cables, TV Mounts, Antennas, Surge Protectors, Blank Media, Armbands, Cases, Chargers, Adaptors, Batteries, FM Transmitters, Docking Stations, etc.|
|Camera & Photo Accessories||Bags & Cases, Tripods & Monopods, Cables & Cords, Batteries & Chargers, Studio Lighting, Frames, Film, Filters, etc.|
|Cell Phone Accessories||Cases & Covers, Chargers, Mounts, Headsets, Data Cables, Screen Protectors, Batteries, Replacement Parts, etc.|
|Car Electronics Accessories||GPS Cases, Cables, Mounts, Stereo Mounting Kits, Installation Harnesses, Chargers, etc.|
|Computer Accessories||Batteries, Cases & Bags, Skins & Decals, Chargers, Cooling Pads, Docking Stations, Stands, Headsets & Microphones, Cables & Adapters, Screen Protectors, Gaming Accessories, etc.|
|Office Accessories||Ink and Toner, Landline Phone Batteries & Cords, Scanner/Shredder/Printer/Copier Cables and Connectors, etc.|
The Problem with Categorizations:
Amazon made a pretty big deal about this new category and states “The Electronics Accessories store provides a central location for more than 3 million unique electronic accessory products.”. However, as of today, I’ve yet to find this new “category” displayed on Amazon. Items that would qualify as an electronics accessory are scattered all across the site and are categorized in the main navigational categories such as “Electronics”.
For the Seller who is manually listing inventory to sell on Amazon, this new commission structure isn’t such a big deal. You simply account for the commission in your listing price and go for it.
For the Seller who relies on Amazon’s correct categorization of the product this proves to be a real problem. More importantly, their API data that is transmitted to automated pricing solutions and integration platforms is still sending the regular category information so it’s impossible to properly price on this new commission structure.
Here’s an Example:
Take some stereo headphones. By the new definition, this is clearly considered an “Electronic Accessory”. You expect Amazon to take the new commission rate on the gross proceeds of the sale. So, if you sell these headphones for $50.00 (including shipping), you can expect Amazon to take 15%, or $7.50 for a net sale of $42.50.
If you are using automated pricing solutions and rely on Amazon’s API this ASIN may very well report that the category is “Electronics”. Note, it doesn’t specify “Accessories”, only “Electronics”. As a result, automated pricing solutions have no way of knowing if the typical 8% (Electronics) commission should be accounted for or the new Accessories structure.
When The Dust Settles:
One can only hope that this will be cleared up soon. I expected to see Amazon report all of these products as “Accessories” or to create a brand new category, as advertised. It seems; however, that the category is simply internal for the extra commission to be charged.
Those using automated pricing solutions will have to figure out a way to ignore Amazon’s categories as reported via their API and will need to do fixed pricing. Those who manage larger catalogs manually will need to do a mass across-the-board price increase to avoid losing at least 7% on every sale.
Thoughts? Stories? Actions? Let us know your experience by leaving comments below and sharing this post.
Count us as one of the ones in automated pricing – and it stinks, big-time. We’re getting the 15% charge, but our pricer still sees the regular category (nothing about the ASIN seems to have changed in regards to category!!)