Did you hear about the recent change Amazon made to free shipping requirements?
There wasn’t a lot of fanfare, but Amazon lowered the threshold for non-Prime members to qualify for free “Super Saver” shipping, going down to a $25 minimum order of Prime-eligible items from $35. It’s not really surprising – companies like Walmart have a $25 minimum for free shipping and Amazon is always looking to be competitive.
For FBA sellers, this represents an opportunity.
Why? Because access to free shipping just got more attractive for non-Prime members. If I’m a non-Prime member with $20 of eligible items in my cart and I’m looking at a $7 shipping charge, I’m probably going to add another item to take my total up to the $25.
As a buyer, I’m likely to also deliberately look for Prime-eligible products, then when I receive my order within two days, heck, I’m pretty impressed with Amazon Prime. This might be enough to encourage me to sign up for an account.
Good news, FBA sellers, so here’s how you should be taking advantage of it:
Assess your pricing
That $25 price point is obviously the magic number when it comes to encouraging non-Prime members to purchase from you. If you’re selling products which are priced just below $25 (let’s say from $21 and up), consider whether raising the price to $25 might work.
This is something you’re going to have to test and assess obviously – on the one hand, you can encourage the non-Prime business because they’re not paying $21 plus $6 shipping, while on the other hand, Prime members are already eligible for the free shipping and raising the price isn’t good for them. Monitor what any competitors are doing with pricing – you can use a tool like Keepa to stay on top of price changes and history.
Keeping track of the competitive landscape will be a vital activity for you in this case (and should be part of what you do in your FBA business anyway). You might be fortunate enough to have a very unique product, in which case you get to call the shots on pricing, but otherwise, keep an eye on how your competitors are doing. Tracking tools like CamelCamelCamel will also give you an idea of their sales volumes. Unfortunately, you won’t know how many sales are to Prime vs. non-Prime members though.
While Amazon keeps its exact numbers of Prime members close to its chest, it is estimated that figure is now somewhere close to 85 million members in the US. Your task will be to encourage more non-Prime sales without missing out on the sales from the valuable Prime customer base.
If putting the price of your product up to $25 isn’t going to work for you, here are some other ideas:
Look to bundle products
Bundles are a great way to offer value and to take advantage of that new $25 rule. If you have lower-priced items, perhaps you can offer two or three bundled together for $25. If your product is usually priced closer to $20 – $23, perhaps there is a low-cost accessory which is relevant to the main product and can be bundled with it.
Bundles can be a smart way to differentiate yourself from competitors and to pave a way to winning the buy box. This can even work if Amazon themselves are a competitor. The Selling Family tells a story of how they bought some very popular Burt’s Bees products at closeout prices and listed them on Amazon. With Amazon as a key competitor, they didn’t sell very quickly individually, but as soon as they bundled the products together (by identifying products which people often bought together anyway), sales took off.
A positive thing about bundling in terms of taking advantage of that $25 rule is that you can please both Prime and non-Prime buyers. It’s about delivering value and providing a unique opportunity.
If you take the bundling route, just be sure to familiarize yourself with Amazon’s (fairly strict) rules on product bundling.
Here are a few things you should note:
- Your bundle may not include as a primary product anything from the Video Games category, or Books, Music, Video, or DVD (BMVD) products.
- BMVD products may be included as a secondary item in the bundle. Amazon gives the example of a yoga mat (primary product), bundled with a yoga DVD.
- Bundles must consist of items that are clearly complementary (really, this makes sense from your own marketing perspective too). It’s simple really, something like socks with a cheese grater won’t make it!
- All products in the listing must comply with Amazon’s listing guidelines.
- The referral fee is based on the fee for the primary product.
- A bundle is considered to be made up of items which each have their own unique ASIN, this means that items sold pre-packaged don’t count. Packaging items together before sending them into Amazon may be another option for you – the package then has its own unique ASIN.
- Your bundle must have its own standard product identifier (UPC), which you are responsible for obtaining. Using the UPC from any product within the bundle to identify all can get your listing removed.
- You are not allowed to include generic (no brand) products in a bundle as it might mislead shoppers into thinking that it is the same brand as an identifiable brand you have in the bundle.
- You must accept the entire bundle back as a return and refund it as a single unit.
The overall bottom line is that a bundle should enhance the customer experience of the product by placing complementary products together. A multipack is not considered a bundle (you can get into trouble for calling your multipack of t-shirts a bundle) and you can’t change items in the bundle once created. You will need to create a whole new bundle if you change anything.
If your bundle is unique, this is a great way to own the buy box, until competitors copy your bundle, of course This is again going to come down to monitoring listings and perhaps using an automatic repricing tool (such as Repricer Express) to keep your listing in the winning position.
For our money, bundles seem the ideal way to keep both Prime and non-Prime shoppers happy where you have products priced below $25 (although if you’re priced only just under, boosting it to $25 may not make a lot of difference). Just for some context, when Prime shoppers are browsing they will see “Prime eligible” next to your listing, while non-Prime members will see “free shipping over $25.” This can be helpful as most people like to know their total upfront and if your pricing is already showing at $25 or more, they know they’ve got free shipping right away.
We feel that overall, the new $25 “Super Saver” shipping minimum is good news for FBA sellers (although possibly not so much for those who do FBM as the lower minimum makes it more difficult for them to compete on price).
The key for FBA sellers is to keep that $25 minimum in mind and look for ways to entice non-Prime members, without annoying the many millions of Prime shoppers. This might mean adjusting a product price up slightly to meet $25, leaving products above $25 as they are (or at least not dropping below $25 when competing with others), selling multipacks or bundling complementary items together.
This new policy creates a lower threshold for non-Prime members to experience the two-day Prime service, which just might lead to more people joining.