Amazon Just Made it REALLY Difficult for 99.9% of UK Businesses
First there was the price parity warnings, then there was the policy warnings for buyer response times, then Amazon started to get aggressive with 3rd party businesses by throwing them off and now… They’re bulking in all the really expensive places in the UK to ship to as mainland UK.
I’m going to start this article with a direct and open message to Amazon.
Open Message to Amazon
Dear “Amazon”,
It’s crystal clear that you care deeply about your customers, this also happens to be the same people we, as 3rd party merchants, care very much about too.
As much as this will be distasteful to you, on behalf of every business that uses the Amazon UK marketplace, please… take a lesson from eBay on communicating messages to your 3rd party merchants.
eBay just released a set of updates for their their marketplaces in a structured, well considered approach, taking the time to bundle several changes together into a single update and added excellent communications around this, this included a dedicated section of their website to the updates, video content and 3rd parties were informed.
We, [plural, as I am speaking for the businesses that I work with and the 11 frantic emails I received so far this evening from other concerned business owners (I’m sure more will follow tomorrow)] would like it very much if you could try and bulk up changes that are going to come out very close to each other, so that as multi-channel business owners we can react to them in one go.
Sometimes we may not like the updates you make, but we also understand that you are looking out for the best interests of our customers too.
While we may not like that the new change to the shipping, because it’s going to cost us an absolute fortune for certain product verticals, we do understand why you would like to make such a change, as it has the best interests for those customers in the outskirts of the UK mainland.
However, this is the 3rd update in as many weeks and it would not take much effort you bundle these together into a single update.
We’re not asking for the level of communication that eBay provides, just to slow down and give us chance to digest and react to the changes, rather than hitting us with three consecutive blows.
Thank you
Take a read of this, if you haven’t seen your’s yet, it’ll be in the email spam folder:
Subject: Important information about the UK Shipping Settings in your seller account
Dear Seller,
We are writing to let you know about a change to the UK shipping regions in your Amazon.co.uk seller account. As of 21st March 2012, deliveries to the Isle of Man, Guernsey and Jersey, as well as other off-mainland locations, will be included in the main “UK Street” shipping region.
We are making this change in order to ensure a consistent delivery experience for buyers on our site. Customers can now shop in confidence knowing that they will be charged the same rates for delivery to addresses throughout the UK, Channel Islands and the Isle of Man.
Your “UK Mainland Street” delivery rates will be automatically applied to the new “UK Street” region. If you wish to modify your current pricing, click the “Shipping Settings” link on the Settings tab in your Seller Central account, and then click the Edit button at the top of the Shipping Model section.
To find out more about changing your shipping settings, enter “Shipping Settings” in the Search box in the upper-right corner of the main seller Help page, or click “Configure My Shipping Settings” under the Configure Account Settings heading.
Thank you for selling on Amazon.
Amazon Services Europe
What Do You Think?
You can’t even block these locations now, if you start refunding orders from these locations, you’ll get policy warnings and jeopardise your account, if you make no changes then we’ll take a hit to your margins and not all our products are suitable for FBA.
So the only thing that gives, is to increase the shipping values used to even out the excessive courier & shipping rates to these locations.
Am I wrong? Was the message fair? What do you think?
Let me know in the comments box below.
I’ve just spoken to Amazon and they have advised me to state in our conditions, the areas that we won’t deliver to. They said it’s fine to do so.
It’s funny because a month ago, they said there was no solution. Has anyone else been told that this is OK to do?
Amazon must be brought to task over this issue, sending a 50kg parrot cage to jersey is going to cost more than sending it to a uk mainland postcode
Stephen
Its great news for established stock holding sellers as it makes it harder for bedroom dropshippers to sell at 3% on cost and think they are Richard Branson, drop ship suppliers charge a fortune for over water deliveries and i have already adjusted listings on Amazon to make sure the PiTA retail dropshippers I compete with get some nice heavy sales of items with offshore history (yes NI buyers have a pattern)
Howdy,
I just noticed a reply to a thread on the UKBusinessForums, here is the response back from a question asked in relation to the new delivery policy:
Large Appliances Amazon fees going down
Also it was found that for white goods, the fees are being reduced from 15% to 7% from the 1st March, see here for more details, maybe this is because these are absolutely massive and are going to cost a small fortune to delivery to the amalgamated shipping areas?
Matt
I did groan when I saw the postage changes but there is no point getting too worked up about them as there is nothing we can do apart from work hard to make more sales on other channels. If Amazon are going to do things like this, they really should allow merchants to be able to exclude shipping locations at the item level as some items e.g. Cots cost about £30 to send to the channel islands and about £6 to send in the UK and so we will be losing money on each items we send out.
Luckily not that many people live in off mainland UK!!!!
Yes,
Re: VAT
There has been no announcement around VAT for exports the Channel Islands. It is only LVCR that is defunct from April 1st or around there which affects imports. As a side-note the abolishment couldn’t come soon enough for us and is at least a step towards creating a more level playing field. Now we only have to deal with all the overseas sellers that Amazon are encouraging who dodge UK taxes – forget VAT for example! This is another story for another day.
I would be surprised to see the VAT position change in the near future for exports to the CI. Some CI buyers actually ask us to refund VAT which we kindly oblige to their requests – quite rare though in practice.
Re: the postage change with Amazon.
We are lucky that a) only a very small percentage (probably less than 1%) originate from CI et.al. and b) we only tend to ship small light items via Royal Mail so there are no surcharges for us to pay. We did charge an extra £1 shipping though for offshore destinations simply because we could. So not a big deal for us. Also as somebody mentioned as most consumers don’t ask for a refund on VAT these transactions are still generally much more profitable for us.
Re: Amazon grouping announcements together.
Yes we would prefer this but this is just the way Amazon operate and probably always will. They are customer centric – not 3rd-party seller centric.
Yes, I also agree that many of the changes being made by Amazon would tend to suggest they are trying to push more sellers on to FBA by using other techniques. Amazon are certainly keen to push FBA. We are very selective about what we use FBA on however and will continue to be no matter what hurdles and extra plates Amazon throw at us to spin. We will not be coerced in this fashion and we will adapt our business model if required. Of course I could be wrong and it is not FBA related but people can make their own minds up about that one.
Another day and another Amazon plate to spin – might make this my new tagline lol.
Steve :)
What a daft thing to say that Amazon are customer centric, not 3rd party centric, we use our third party to help us with our business, therefore any update and work with a third party helps us (the customer!).
Hello Barbara,
I have read your post several times but sorry I can’t seem to make sense of it.
In my reference to Amazon are customer centric not third party seller centric I was referring to the fact that Amazon’s number one priority is their customers – not third party sellers. Customer satisfaction has always been Amazon’s ethos. There is lots of information on the web documenting Amazon’s approach to business.
Steve
This will mean we lose money on every sale under £500 (which is the majority). We source from 18 different suppliers and some have two or three courier contracts. I can’t see an option other than cancelling orders.
Hi Matt,
When you say the VAT advantage will soon be gone, can you clarify?
I know that LVCR stops in April, but thats only for stuff coming from the CI to UK isn’t it?
Sending to CI will still be an export and zero rated wont it?
Never thought about people shipping pallets, that’s not a situation I would envy being in. I suppose the only thing there is that everyone else will be in the boat.
Your letter was quite right of course, Amazon don’t communicate in the same way as eBay and we don’t get the same notice. They could, for once, take something from eBay instead of the other way round.
Dave
Hola Dave,
See Steve’s comment below, he covers VAT issue really well. My apologies for any confusion caused on that.
Steve also makes an interesting point over the points of views, I had not looked at it in this manner and explains the difference between the two marketplaces very well.
Matt
Mmm…..this is going to take some fathoming out for us, as we ship a wide range of parcel dimensions and weights. ?Is Amazon’s business plan to become a standalone retailer, sourcing any volume-selling products directly from manufacturers themselves, leaving third-party sellers with low-volume niche products? Seems like it to me – we’ve been successful with 2 products on Amazon.co.uk, both of which we’re now not able to compete with due to amazon buying directly from the manufacturers – we expect this trend to continue. Hey-ho, another new issue to contend with in the fast-moving ecommerce arena – amazon has laid down the challenge to us!
Howdy Richard,
Amazon cannot compete with you, you’re too nimble.
Amazon has and will continue to make it more difficult for most eCommerce businesses. You’ll just adapt faster in the areas where it cannot get to quickly, its always a cat-and-mouse game and the odds are weighted in your favour, not Amazon’s.
Matt
Richard – perhaps establishing your own brand is the way to go (trademark protected of course). You have exclusivity then and not even Amazon themselves can sell it as it has your brand all over it. This is what we do and very successfully. In fact, we rarely sell other brands these days and concentrate on our own.
There is a lot to learn but it is a much better strategy in the long term we feel. You have to monitor for 3rd-party sellers however piggy-backing on your listings closely. We have only just recently had to issue a cease-and-desist letter via our lawyers to a particularly stubborn seller who was infringing our mark. Amazon will act if you report it to them but Amazon are asking for more evidence these days. Sorry if I am going off topic.
Steve :)
We’ve just started on that Steve, and our first container of our own products arrived earlier this week. As you say, this protects you in all kind of ways, although we have not protected anything yet by trademark – must get on to that. I agree that this is the best long-term strategy, as it also builds value for our businesses.
Your message to Amazon is spot on.
Could this be part of a stealth plan to encourage more sellers to go FBA?
Just a thought :-)
Hola Kev,
I wondered that for a few moments, but over sized items are excessively expensive for FBA, so I kinda ruled this out.
I understand why they’re doing this, the outer areas are under severed and is a barrier to the UK that needs to be addressed. The knock on effects to the courier companies will quite precise (and hopefully positive), as I mentioned to Dave above, I’m pretty sure most courier companies will be getting calls from businesses saying “You seriously want me to pay a £12 surcharge?”
Matt
Howdy Matt
Its 0:22 on the 1st of March and this has just made me :O … sleep probably won’t come easy now as I sit here and wonder how on earth a lot of people are going to get around this without putting shipping charges up. Let alone the whole customs nightmare that can come with the channel islands.
Your message is spot on by the way, eBay manage they’re updates much better than Amazon…FACT
Thanks again for breaking this news in an easy to see and read manner…’plain english’
Dave
Hola Dave,
I was thinking of you when I wrote the letter. You’re pretty much screwed for the vast majority of the product range.
You can’t even elect not to despatch to those locations now, the pallet delivery cost to the channel Islands, Northern Ireland & highlands is going to be horrific.
By the way, I have 3 projects I’d love for you to get involved in, I’ll drop you a note on these in a few minutes.
Matt
Hey Matt
Cheers for the reply, definitely a bit of an issue for us as an Amazon seller, it just looks like everything Amazon do at the minute is another hurdle for us. As the comments below show, for a lot of sellers, it won’t be a huge impact but for our product range then yep its gonna be a toughie…But where there’s a will there’s a way :)
Regarding your 3 projects I think all of them are FANTASTIC and would love to be involved in whatever way I can. The community here at Last Drop Of Ink are going to have a lot of cool stuff to look forward too it would seem ;)
Dave
My first thought on this is that it won’t be too bad. Off the top of my head we pay about £5.50 for a parcel in mainland uk with Parcelforce and (I think) about a tenner to Channel Isles, so we will be losing a fiver profit if we ship there at the same cost.
However, we charge the same price to Channel Isles customers but there is no Vat to pay so as long as the sale price is over £25 we save a fiver on VAT which cancels out the loss in the shipping.
It’s late, and I’ve. It thought it through fully so I might have missed something important but I don’t see it as a serious problem. At least not for us as we only ship a small percentage to CI
There are of course highlands and islands etc but If you ship enough to these areas for it to be important then you can probably get a discount on your parcels anyway with a little negotiation.
Howdy Dave,
Ah the VAT advantage will be gone soon from the Channel Islands :(
I’m wondering how many conversations will be made today by businesses to their courier companies for the surcharges they apply?
Matt