Amazon Commissions Are Charged At The Item’s List Price

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Amazon commissions charged on price tag

In an email to sellers, Amazon revealed that effective October 24, 2023, we will calculate Amazon commissions based on the price you provide as quoted, rather than the purchase price paid by the customer. This change will apply to all transactions for which Amazon calculates tax.

For sellers using the VAT calculation service and transactions where Amazon doesn’t calculate tax, we already calculate Amazon commissions based on the price quoted to be charged at the marked price. We will now use the same calculation method for all transactions for which Amazon calculates tax, including Marketplace Promoter (e.g. eCommerce VAT) transactions.

We will update the Amazon Services Europe Business Solutions Agreement to reflect this change. If you continue to use the Selling Service after October 24, 2023, you accept this change.

When the news came out, many sellers found it hard to believe, and some immediately asked customer service, who also gave a positive answer.

If you want to know more about it, click on Amazon Seller Center.

 

Amazon commissions

Amazon commissions

 

The impact of Amazon commission charged at the marked price

  1. Amazon’s European profitability pressure is greater than that of the Americas
  2. If this policy is really in Europe on a trial basis, Amazon profit growth, the probability that the world will follow
  3. Coupons and other discounts used more carefully
  4. Equivalent to reduce the false discounts, directly to put the actual lowest price in the foreground!

Do Promotional Discounts Apply?

This change does not apply to promotions, including seconds, gift certificates or coupons, buy-one-get-one-free and markdowns, Amazon-funded discounts, and Prime-exclusive discounts. For promotions, we will continue to charge a sales commission on the total sales price paid by the buyer.”

Looking at the Amazon backend alone there is an explanation for the “offer” here:

If you use the Amazon VAT Calculation Service to calculate VAT, the amount buyers pay for an item may be different from the price you offer for the item. This is because Amazon VAT Calculator calculates VAT for each transaction based on the applicable tax rules and your Amazon VAT Calculator settings.

 

Amazon commissions

Amazon commissions

 

The “Offer Price” is the total amount of the item provided by the seller after applying repricing rules such as Promotional Pricing, Business Pricing, and Quantity Discounts (if any).

According to this backend explanation, this change should only be for the VAT portion and not for promotional discounts.

Selling on Amazon and finding a reliable Amazon FBA freight forwarding is a big step towards success.

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