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Amazon Small And Light Program Replaced by Low-Price FBA - 2024 Update!
1. What Was Amazon Small and Light?
The Amazon Small and Light program was launched to assist sellers in lowering fulfillment costs for lightweight, low-priced products. Introduced several years ago, this initiative enabled sellers to list items at discounted FBA rates in exchange for longer shipping times.
Products meeting criteria such as a price under $12 and dimensions of up to 18 x 14 x 8 inches and weighing less than 3 ounces were eligible for enrollment in the Amazon Small and Light program.
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2. End of Small and Light Program
In 2023, Amazon announced the termination of the Amazon FBA Small and Light program, effective August 29. This change was part of a broader strategy to streamline fulfillment processes and improve overall efficiency.
The replacement program, known as the Low-Price FBA Program, aims to address some of the limitations of the previous system while offering enhanced benefits to sellers.
3. What is Low Price FBA Program
The new Low-Price FBA Program simplifies the criteria, allowing any product priced at $10 or below to qualify without the need for additional adjustments. This program also brings faster shipping times in line with Amazon’s standard FBA options, aiming to enhance customer satisfaction and competitiveness in the marketplace.
The new Low-Price FBA Program simplifies the criteria, allowing any product priced at $10 or below to qualify without the need for additional adjustments
4. Key Features of the Low-Price FBA Program
The transition to Amazon Low Price brought numerous benefits but also posed challenges for sellers previously enrolled in the Amazon Small and Light program. Below are the key features of this new initiative.
4.1. New Fee Structure
The transition introduces a revised fee structure that affects both previously enrolled Small and Light products and new entries into the Low-Price FBA Program:
- Higher Fees for Former Small and Light Products: Products that were part of the Amazon FBA small and light program will experience an increase in fulfillment fees, approximately $0.30 higher than the previous rates.
- Reduced Fees for Standard FBA Products: The new program also offers a fee reduction of about $0.77 lower than the standard FBA rates for products that were not part of the Small and Light program. This adjustment aims to balance costs and encourage a wider range of products to participate in the program.
4.2. Unified Fulfillment Speeds
Unlike the Amazon FBA Small and Light program, which offered slower shipping times to reduce costs, the new program aligns with Amazon’s standard FBA services. All shipments under the Low-Price FBA Program now benefit from faster fulfillment speeds, typically within two days. This is designed to meet customer expectations for quick delivery.
4.3. Simplified Eligibility Criteria
Unlike the Amazon FBA Small and Light program, which required sellers to meet specific criteria regarding product dimensions and weight for enrollment, the Low-Price FBA Program simplifies eligibility requirements. Products priced at $10 or below now qualify without the need for additional adjustments.
4.4. Auto Enrollment
A significant advantage of the Low-Price FBA Program is the introduction of auto enrollment. Unlike the Amazon small and light program, where sellers had to manually enroll their products, the Low-Price FBA Program automatically enrolls eligible products. When a product is priced below $10, it is automatically included in the program, simplifying the process for sellers.
5. Strategies for Sellers to Adapt
The transition from the Amazon Small and Light program to the Low-Price FBA Program introduces new challenges and opportunities for sellers. Below are several strategies to help sellers go through this transition effectively.
5.1. Adjust Product Pricing
Conduct a comprehensive profitability analysis of your product to estimate potential margins under the Low-Price FBA program. If your product is priced slightly above $10, consider lowering it below $10. In many cases, this adjustment can still maintain profitability due to reduced FBA fees.
See our case study below to see how we added $2000 additional profits just adjusting our price below $10 in one of our client’s product.
Case Study:
One of our clients had a product priced at $10.44, yielding a profit of $0.89 per unit. By adjusting the price to $9.99 under the Low-Price FBA rates, the profit per unit increased to $1.28, a $0.39 per unit gain simply by reducing the price by $0.45.
With approximately 5,000 units sold monthly, this strategy added nearly $2,000 in profits for a single ASIN.
5.2. Sourcing Products More Cost-Effectively
If your profit margins shrink due to the new Low-Price FBA rates, it’s crucial to take proactive steps:
- Negotiate Lower Prices: Work closely with suppliers to negotiate better prices or bulk purchasing discounts. This can help offset increased fulfillment costs and maintain profitability.
- Diversify Suppliers: Explore multiple suppliers for your product to discover more cost-effective options. Having alternatives allows for flexibility in sourcing and can potentially reduce costs associated with production and procurement.
5.3. Use Amazon Global Logistics and Warehousing Options
To lower product costs in the Low-Price FBA Program, sellers can use Amazon Global Logistics and Amazon Warehousing and Distribution (AWD). Amazon Global Logistics offers cheap shipping rates, which significantly reduce shipping costs compared to traditional sea carriers. Although this option comes with slightly higher lead times.
Additionally, utilizing AWD (Amazon Warehousing and Distribution) can help sellers avoid fees such as the Amazon new placement fee. This fee is typically charged when Amazon distributes inventory across multiple fulfillment centers to optimize delivery times. Moreover, your inventory is auto replenished if you opt for the AWD. By this strategy sellers can significantly increase their profit margins.
5.4 Virtual Product Bundling
The virtual product bundling option enables sellers to create bundled listings without physically combining products beforehand. This strategy allows sellers to offer customers attractive bundles that increase perceived value and sales potential. This flexibility not only enhances profitability by boosting sales but also provides a competitive edge through innovative product offerings.
5. Conclusion
As we bid farewell to the Amazon Small and Light program and embrace the Low-Price FBA Program in 2024, it’s clear that Amazon continues to evolve its marketplace to better serve sellers and customers alike. Each change Amazon introduces brings new opportunities for sellers to innovate and thrive in the competitive e-commerce landscape.
Looking ahead, Amazon’s commitment to reducing FBA costs for the Low-Price FBA Program promises even more opportunities on the horizon. By staying adaptable and proactive, sellers can harness these changes to enhance profitability and expand their market reach, ensuring they remain at the forefront of Amazon’s dynamic marketplace.
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About Ecom Brainly
Ecom Brainly – A Full-Service Amazon agency that focuses on Sustainable Growth and Profitability for Our Partners (clients).
We been selling on Amazon since 2017 and has had to adapt for every change that Amazon has made along the way. Amazon is an ever changing marketplace and Ecom Brainly has his team ready to handle any and every challenge.
Is your brand having challenges with growth, profitability, advertising, reporting etc – If yes, please contact us today!
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