Most sources credit the Greek philosopher Heraclitus with the idea that the only constant in life is change. “Everything changes and nothing remains still,” he left in his writings.
Amazon seems to have taken Heraclitus’s musings to heart this year with the introduction of several major changes to its seller policies.
This past spring, the mega marketplace announced big changes to its FBA storage capacity limits, as well as a plan to start charging for UPS store returns.
If you’re like most Amazon sellers, you probably weren’t surprised to see yet another announcement, this time regarding the closure of Amazon’s Small and Light fulfillment pricing program.
So what are the latest changes? And what do they mean for your business? Let’s dive in.
Goodbye Small and Light
- What Was Amazon’s Small and Light Program?
- Meet the New Low-Price FBA Rates
- What Does the End of FBA Small and Light Mean for You?
- 4 Tips to Continue Winning Without Small and Light
What Was the Amazon FBA Small and Light Program?
On August 29, 2023, Amazon announced that its Small and Light program would be replaced by low-price Amazon FBA fees across the board.
The Small and Light (S&L) program was specifically designed for low-priced products with small profit margins. It offered sellers with lightweight products reduced fulfillment costs on qualified items based on product weight and dimensions.
Fulfillment fees under S&L ranged between $2.47 for ASINs less than 4 oz and $5.40 for items up to 3 lb. The aim was essentially, light fees for light products.
The top benefits of Amazon Small and Light were:
- Free delivery for customers
- Reduced fulfillment fees
- Amazon-sponsored discounts for customers ordering two or more units
These benefits made selling low-priced items profitable when they otherwise wouldn’t have been under Amazon’s standard FBA products pricing.
📚Read Next: The 5 Best Amazon FBA Alternatives to Strengthen Your Fulfillment Strategy.
Why Is Amazon Sunsetting FBA Small and Light?
The reasons Amazon gives for shutting down the Small and Light program are customer satisfaction and simplification.
Here’s Amazon in its official announcement:
We have learned a great deal over the last few years, including how these lower fees have helped enable sellers to offer far more low-price selection to customers and how much customers value the continued improvements we have made in speed. As a result, we have decided to end the US FBA Small and Light program and instead lower the standard FBA rates for all low-price products.
With the S&L program, sellers enjoyed lower FBA fees. The tradeoff was slower shipping speeds compared to standard FBA SKUs. According to Amazon, as Prime customers have gotten more accustomed to two-day shipping and receiving items the next day, they are no longer satisfied with slower shipping speeds.
After the closure of S&L, all products will be shipped with the same faster FBA shipping speeds.
Meet the New Low-Price FBA Rates
Small and Light fulfillment rates will be replaced by lower standard FBA rates for all products priced below $10. These rates now apply to all low-price products, including many SKUs previously enrolled in Small and Light.
Amazon Low-Price Rates
| Size tier | Shipping weight | Low-Price FBA rates excluding apparel | Low-Price FBA rates for apparel | Low-Price FBA rates for dangerous goods |
|---|---|---|---|---|
| Small standard | 4 oz or less | $2.45 | $2.66 | $3.42 |
| 4+ to 8 oz | $2.63 | $2.81 | $3.71 | |
| 8+ to 12 oz | $2.81 | $3.10 | $3.87 | |
| 12+ to 16 oz | $3.00 | $3.38 | $3.60 | |
| Large standard | 4 oz or less | $3.09 | $3.66 | $3.87 |
| 4+ to 8 oz | $3.31 | $3.86 | $4.12 | |
| 8+ to 12 oz | $3.47 | $4.07 | $4.26 | |
| 12+ to 16 oz | $3.98 | $4.55 | $4.57 | |
| 16 oz+ to 1.5 lb | $4.63 | $5.33 | $5.23 | |
| 1.5+ to 2 lb | $4.92 | $5.60 | $5.52 | |
| 2+ to 2.5 lb | $5.33 | $6.06 | $5.79 | |
| 2.5+ to 3 lb | $5.62 | $6.28 | $6.08 | |
| 3+ to 20 lb | $6.40 + $0.16/half-lb above first 3 lb | $6.40 + $0.16/half-lb above first 3 lb | $6.86 + $0.16/half-lb above first 3 lb | |
| Small oversize | 70 lb or less | $8.96 + $0.42/lb above first lb | $8.96 + $0.42/lb above first lb | $9.71 + $0.42/lb above first lb |
| Medium oversize | 150 lb or less | $18.28 + $0.42/lb above first lb | $18.28 + $0.42/lb above first lb | $19.15 + $0.42/lb above first lb |
| Large oversize | 150 lb or less | $89.21 + $0.83/lb above first 90 lb | $89.21 + $0.83/lb above first 90 lb | $101.14 + $0.83/lb above first 90 lb |
| Special oversize | Over 150 lb | $157.72 + $0.83/lb above first 90 lb | $157.72 + $0.83/lb above first 90 lb | $178.51 + $0.83/lb above first 90 lb |
What Does the End of FBA Small and Light Mean for You?
Amazon summarizes how this change will impact sellers in a few different scenarios:
- If products were enrolled in S&L and are priced below $10, sellers will pay about $0.30 more per item
- If products were not enrolled in S&L and are priced below $10, sellers will pay about $0.77 less per item
Many sellers have voiced that Amazon’s announcement puts a positive spin on the news by focusing on the lowered FBA rates for all low-price products. Much of the confusion seems to be around what, exactly, qualifies as a “low-price product.”
We’ll explain.
Maximum “Low-Price Product” Pricing
Amazon recently increased the maximum price to qualify for Small and Light from $10 to $12, expanding the range of qualified items and helping sellers increase profitability on items with lower price points.
With the end of Small and Light, Amazon has also decreased the maximum price back to $10. This means that items priced between $10 and $12 that once qualified for lower Small and Light rates now don’t fall into the “low-price product” category.
For sellers previously enrolled in S&L, this is a massive shift.
While many say they understand Amazon’s reasons for closing Small and Light — and are even willing to absorb the $0.30 per item increase for items priced below $10 — most are not happy with the step back in maximum price.
Overall a much needed change (Not Enrolling Into S&L), however the price decline from $12 to $10 is a massive shift backwards IMO, we have several products that fall just under $12 and they do very well however $10 is too low as our margin is approximately $2.00.
Seller Central user Seller_m1kvtRZcQzPyz
Several sellers also expressed confusion around Amazon’s approach of basing low-price product qualification solely around a product’s price, rather than shipping costs.
The real question here is what does sale price have to do with the cost of fulfillment?
Seller Central user Seller_EcWkJa2ukzYqu
The 30 cent fee increase can be absorbed but the price limit from 12 down to 10 is horrific.. How does the shipping cost more or less based on the price of the item? Fees should be based on shipping cost not price.
Seller Central user Seller_Kz4OWECFfcR8n
Size Measurement Concerns
Another seller pointed out that discrepancies in size measurement could lead to major increases in fulfillment fees if smaller items end up in larger size categories.
This is crazy. First Amazon NEVER measures correctly and even the smallest items end up in the large standard category. In that case, for apparel, an item that was 6oz, the fee has gone from a fee of $2.77 to $3.86 – that’s a 39% increase! … This will result in a huge change for us and we will need to rethink our products and now package more items together.
SellerCentral user Seller_1YkWo4vbgfSN0
4 Tips to Continue Winning Without the Amazon Small and Light Program
The end of the Small and Light program could impact your Amazon business positively or negatively, depending on the factors above. But if Amazon sellers are one thing, they’re adaptable.
We’re confident you’ll make the most of these changes, just like you have with all the other curveballs Amazon’s thrown over the past decade.
Here are four ways to do just that.
1. Review your product offerings
For sellers offering small products priced under $12, the sunset of S&L will likely impact profitability. In particular, if you’ve been selling $10-12 products through S&L, it might be time to reconsider pricing or whether it makes sense to continue offering those products at all.
2. Check inventory status
With faster delivery times in the immediate future, sellers could see order cycle times increase and sales accelerate. Sounds great, right? Absolutely. But you need to be prepared to ride this possible wave of increased sales. If Amazon’s fund reserve period is a bit too long for you, consider a line of credit, revenue advance, or invoice factoring solution to replenish inventory ASAP and ensure you’re able to stay in stock.
3. Expand into new markets
One of the drawbacks of S&L was that it excluded major markets, like Mexico, Canada, and Australia. If selling through S&L has been limiting your global presence, this is your chance to reconsider those additional markets for your cross-border e-commerce strategy.
4. Enjoy your newfound packaging freedom
Small and Light was notorious for its stringent packing and prepping requirements. Poly bags may have been an acceptable tradeoff for reduced FBA fees, but creative packaging tweaks like including inserts are a great way to get more Amazon reviews and increase your revenue.
Moving Forward With New FBA Rates
The sunsetting of Small and Light isn’t the end of the world, but it could have serious profitability implications for stores with small products in the $10-12 range. Once you’ve reviewed Amazon’s new low-price FBA rates, it’s time to come up with a plan to protect your ROI.
You may need to bid farewell to a few of your Amazon listings, beef up your inventory, or look at geographic expansion. Whatever direction you choose, we’ll be right here with the latest updates and strategies for Amazon sellers. Explore our Amazon resources hub and stay ready for whatever comes next.
