Recently, some sellers claimed that using Amazon's Small and Light program can increase their profits by 40%. Let's take a look at what this program is.
Amazon previously issued an announcement: Effective April 28, 2022, the FBA Small and Light program has raised the price threshold for eligible items from $8 to $10. So, if your product is no more than 18*14*8 inches (45.72*35.56*20.32 cm), weighs no more than 3lb (1.36kg), and costs less than $10, you can participate in the Small and Light Program.
From the above announcement, we can see that the products that can participate in the Small and Light Program have certain volume, weight and price restrictions. In addition, restricted products, FBA embargoed products, adult products, dangerous goods, and products with temperature requirements are not eligible for the Small and Light program.
The increase in the profit of the seller is mainly to help sellers save logistics costs while reducing the sales commission rate.
In terms of sales commissions, Amazon's plan for maternal and child, beauty and personal care products is as follows:
An 8% rake is charged for items with a total sales price of $10 or less; a 15% commission is charged for items with a total sales price of more than $10. From this price, we can calculate the profit. Assuming that the selling price is $10, and it is marked with $9.99 when it is put on the shelves, profit = selling price – purchase cost, one-way freight – commission – delivery fee = 9.99-2-0.5-9.99*8 %-3.77=$2.92
2.92-2.09=0.83 divided by 2.09=39.7%. We found that this product in our case saw a 39.7% increase in margins. We will find that the profit has increased, and the price drop will also help the seller to increase the order volume.