Amazon announced, in tandem with its yearly fee changes, that it’s introducing an “exciting FBA new selection program” for Amazon US, EU, and JP marketplaces.
The announcement, posted to Amazon Seller Services Forums, is as follows:
Starting April 1, 2020, participants in the FBA New Selection program can qualify to get free monthly storage, free removals, and free returns processing on eligible new-to-FBA ASINs. In addition, participants who are new to FBA can qualify to get a $100 discount on Amazon Partnered Carrier shipping.
Basically, the FBA New Selection Program is Amazon’s way of encouraging new and established Sellers and brands to send more products into FBA by waiving select fees for 90 days, up to 180 days.
That’s a deal that’s hard to say no to, though, as qualifying Sellers who participate in the FBA New Selection Program will receive a (brief) break from paying monthly storage fees, removal fees, and returns processing fees.
Opting-in to Amazon’s FBA New Selection program might be the right choice for your business, depending on your category, product line, and account health. Read on to find out more about what the FBA New Selection program is, or scroll to the bottom to see how you can use it to increase revenue for your business.
The Perks of Opting-In to FBA New Selection
The benefits of the program include:
- Fee waivers that apply to up to 500 new-to-FBA parent ASINs (reset every April 1st)
- Free monthly storage for the first 50 units of each new parent ASIN in the 90 days after the first unit is received at an Amazon fulfillment center
- Free removals for any of the first 50 units within 180 days, after the first inventory-received date
- Free returns processing for 5 product categories (Apparel; Shoes, Handbags & Accessories; Jewelry; Luggage; and Watches) for up to 50 units of each parent ASIN
- $100 discount used towards inbound transportation charges for new FBA sellers who have not sent inventory to FBA before. Shipments must be sent to a fulfillment center through an Amazon Partnered Carrier
The new program is like an extension of the monthly storage and removal fee promotion for new ASINs introduced to Sellers in March 2019. Sellers who are participating in that promotion have been automatically enrolled in the FBA New Selection Program.
The fee waivers that Amazon provides are only valid for a limited time. The shortest timeframe that select fees can be waived is 90 days, though some fees may be waived for up to 180 days.
Potential Drawbacks of the FBA New Selection Program
Amazon reserves the right to, “change or cancel the Program at any time by giving you 30 days’ prior written notice. “
That means, that if for any reason Amazon decides to terminate your participation in the program, you’ll have a 30-day grace period before you are charged the regular storage, referral, and FBA fees.
Not a problem if you have 50 per unit of each Parent ASIN, however, this could become a headache if you decide you’d like to remove all of your inventory from FBA.
How to Qualify for the FBA New Selection Program
Amazon has outlined a few of the minimum requirements to qualify for these fee waivers. Proceed with caution though, because there are some sneaky stipulations, such as category restrictions, for you to qualify for select fee waivers.
To take advantage of the FBA New Selection program benefits, Sellers must have a Professional account with an inventory performance index score of 400 or higher. This means that your account will have to meet certain profitability, inventory, and performance metrics.
In addition to the minimum IPI score, only Sellers with no storage limit (typically new sellers that have been active for less than 26 weeks or Sellers with an IPI of greater than or equal to 400) are eligible for fee waivers through the program.
Amazon specifies that the Parent ASINs must be new to FBA, and ASINs cannot be in Media categories.
That means that products like Books, DVDs, Music, Software and computer/Video Games, Video, Video Game Consoles, and Video Game Accessories are not eligible to be included as part of the 500 new-to-FBA Parent ASINs. Our experts speculate that this is because of the high return rate for products in those categories.
Additionally, to be eligible for free returns processing, an ASIN must be in the Apparel; Shoes, Handbags and accessories; Jewelry; Luggage; or Watches categories.
Use FBA New Selection to Your Advantage
New Amazon Seller
If you’re a new brand that’s not utilizing Amazon as a sales channel, now may be the time to test if it’s profitable for you.
With the New Selection program, many new sellers and big brands who sell products in the Apparel category, for example, won’t have to worry about some of the logistical investments of importing thousands of variations of the same t-shirt.
Those Sellers can also benefit from the free returns processing, though returned items will need to be received at a fulfillment center.
Established Amazon Seller
Although Amazon’s ultimate goal may be to encourage new brands to begin selling on Amazon, this program also presents a unique opportunity for Amazon Sellers to create new products or product bundles without having to pay the increased fee prices.
Established Sellers should look at their best-selling products or products that are often purchased together for inspiration.
If you redesign a product’s packaging to improve the appeal of your best-selling item or begin creating product bundles, you can then create a qualifying, new-to-FBA ASIN that reaps the benefits from the program.