Saturday, April 20, 2024

Amazon Retiring The Small and Light Program: What You Should Know About?

For sellers offering small, inexpensive, lightweight products priced at $12 or less, Amazon’s FBA Small and Light program was the preferred choice.

However, Amazon declared on June 29, 2023, that Small and Light would be permanently discontinued in the US on August 29, 2023. Amazon is deciding to stop charging FBA rates for any item priced under $10 in order to make up for the program’s termination.

This article will explain the FBA Small and Light Program’s purpose, the reasons behind its termination, and Amazon’s future plans.

In this article you will learn:

  1. What was the Small and Light Program at Amazon?
  2. Why Did Amazon Decide to Terminate the Light and Small Initiative?
  3. What Benefits and Drawbacks Did Amazon Small and Light Offer?
  4. Amazon’s Replacement to Small and Light
  5. CONCLUSION

What was the Small and Light Program at Amazon?

The Small and Light program was a cost-cutting initiative that allowed sellers to pass along the savings to their customers by lowering fulfillment costs. If sellers were selling small, inexpensive, and quickly-moving products, this was thought to be one of the best ways for them to turn a profit.

In order to qualify for Small and Light, a product had to meet the following requirements:

  1. It had to be no more than three pounds.
  2. less than 18 by 14 by 8 inches in size
  3. Products have to be less than $12.
  4. It needs to be brand-new.
  5. Products having an active ASIN need to have sold at least 25 units in the previous month.

Of course, a product will not qualify for Small and Light even if it satisfies the requirements and is on Amazon’s list of restricted products. If your products are eligible for this program, you can enroll them and reap some serious benefits, but, as we’ll discuss later on, it’s not without a few drawbacks.

Products enrolled in FBA Small and Light also have lower fulfillment costs, which enables faster sales of a larger quantity of inexpensive goods.

Consider a product that weighs and fits within the permitted dimensions of 18 x 14 x 8 inches, but is larger than 15 x 12 x 0.75 inches. Shipping under FBA Small and Light would cost $2.66 per unit, while shipping under standard FBA would cost $3.86.

Why Did Amazon Decide to Terminate the Light and Small Initiative?

The modification was made, according to an Amazon statement, to make it simpler for sellers to fulfill orders while paying less in FBA fees. After July 17, new product enrollment will cease, but qualifying Small and Light items will continue to receive benefits through August 29.

Amazon explained that in order to accommodate their customers’ desire for faster delivery speeds, they decided to lower the shipping rates of all items that cost less than $10, regardless of size or weight. This was done because, according to Amazon, products enrolled in Small and Light were shipped at slower speeds than those provided by the standard FBA.

Current trends indicate that consumers don’t really care how quickly an item is delivered.

According to Statista, 32% of consumers worldwide stated that a slow delivery time would cause them to give up on their cart in 2021. Then, according to Hotjar’s statistics on abandoned carts in 2023, only 22% of consumers put off their purchases because of the slow shipping.

What Benefits and Drawbacks Did Amazon Small and Light Offer?

Benefits

Savings for both buyers and sellers was the main benefit of the Small and Light program, as was previously mentioned.

Returning to our example, shipping for $2.66 instead of $3.86 seems like a small amount ($1.18, to be exact), but if you sell 1,000 units of this item in a month, you will have saved over $1,000! Sellers can now offer their products at a lower price to further entice customers thanks to the extra dollar in savings.

Furthermore, items in Small and Light also qualify for Prime shipping. However, you might suffer long-term consequences as shipping typically takes 3–5 business days rather than the 2-day guarantee.

Additional benefits include Multi-Channel Fulfillment (MCF), no minimum order requirements, and free discounts (with Amazon covering the cost of the discount) on items in the Consumables category that are $5 or less.

Drawbacks

In addition to the slight shipping delay that Prime members encountered, as you previously discovered, there are a few other drawbacks with Small and Light.

Let’s talk about the preparation and shipping requirements first. Amazon takes great care when shipping inventory for products in FBA Small and Light. If the shipment doesn’t match the required requirements, the goods may be held in reserve at a fulfillment center. Additionally, some sellers have reported instances of missing or incorrect items because FBA Small and Light products are small by nature. Thankfully, the products are covered by Amazon’s A-Z Guarantee.

When it comes to Small and Light, most sellers also overlook the fact that it is available abroad. The program was only accessible in nine other countries besides the US, which were

  1. France
  2. Germany
  3. Italy
  4. Japan
  5. Netherlands
  6. Poland
  7. Spain
  8. Sweden
  9. United Kingdom

Amazon’s Replacement to Small and Light

Amazon has introduced a new program called Low Price FBA fees, which is intended to take the place of Small and Light. Amazon claims that customers who enroll in Small and Light for items under $10 will now pay about $0.30 more each item in exchange for faster delivery times.

However, you would now pay $0.77 less per item if your product was under $10 and did not meet the requirements for Small and Light.

The fact that brands don’t need to make any account changes is the best thing about Low Price FBA fees. The low-price rates will be applied automatically to eligible products, and they won’t be charged the 2023 holiday peak fulfillment fees, which will run from October 15, 2023, to January 14, 2024.

When compared to FBA, low-cost FBA rates have lower fulfillment costs while still meeting the standard FBA prep and packaging requirements. The updated comparison of the FBA fees for low-cost products under the new Small & Light program is shown below. You’ll notice that, in comparison to the previous small and light program, the fulfillment fees for large standard items are substantially higher (small standard items remain largely unchanged).

CONCLUSION

In conclusion, products you sell on Amazon for less than $10 will now receive the same shipping speed as more expensive products thanks to Amazon’s new Low Price FBA fees. The drawback is that vendors who previously listed their goods on Small and Light will now have to pay $0.30 more each item.

In order to further enhance the customer experience, Amazon should be commended for lowering its FBA rates for items under $10, but sellers would have saved a lot more money if the Small and Light program had remained in place. Sellers now have to decide whether to increase the price of their goods or maintain the same price and accept a reduction in profit margins.

What do you think about Amazon discontinuing its Small and Light initiative? Please tell us by posting a comment below!