Recently (Mid Oct. 2013) Amazon changed their Free Shipping limit from $25 to $35.
If a buyer has a Prime Membership, this doesn’t make one bit of difference to them.
For all other Amazon buyers, this is huge.
If a buyer wanted a product and it was priced at $25 or above… they automatically qualified for Free Shipping.
The Game HAS Changed With “Plus $10”
Game Changer – after over a decade of $25 Free Shipping – Amazon has raised the limit to $35 (pretty steep jump in my opinion). The consensuses around the internet groups is that Amazon would like to move more shoppers into their Prime Membership program.
When I am pricing certain products that I sell, I am usually targeting the “NON-Prime” customer. Products that would be listed by other sellers for $17 – $23 – I would list mine at $25.
That’s why I called it “Magic $25” – because it was a bit magical how I could sell products for a much higher price than other sellers.
Of course, we all know that Magic $25 didn’t work for All Products… many products you sell must be listed for the price it will sell for. In other words, some products are just going to sell for $17 (for instance) and not a penny more. I talk a bit about testing products here: Testing Magic 25.
All Sellers Are Equal Now (Somewhat)
To throw another wrench in the works – Amazon has changed the way sellers are listed on product pages.
In the past, Featured Merchants (those of us who have a track record and good standing with Amazon) would be listed at the top of the pack of sellers. All other sellers were pushed down (these are the sellers that are NEW or have a poor track record).
As of Mid Oct 2013, Amazon has now mingled all sellers together… as if we are all equal.
For instance, a brand new seller (Amazon will show “Just Launched”) can be listed right at the top of all sellers – if that seller has the best price. This doesn’t always happen, but I’ve seen it happen often enough this week to be concerned.
Those of us who have been selling on Amazon for a while have come to learn that getting the “buy box” is not just about lowest price. If you need a refresher about the Amazon Buy Box check out Chris Green’s webinar here: Amazon Buy Box
NOTE: When you do a search on Amazon for any product – what you see can be very different from what another buyer sees. After you watch Chris Green’s webinar you will see that other factors do come into play.
I have been thinking about product pricing this week (related to Magic 25), while I was listing new inventory and reviewing inventory already at Amazon FBA.
What Have I Changed?
Personally, I have a lot (I mean LOT’s) of products that I have priced at $25. Have I changed the price of these products now that the free shipping line has moved?
Yes… In some cases.
First – If the product is my own (I created a bundle or multi-pack and I am the only seller) I price according to profit. I created a bunch of my own product bundles and multi-packs that the $25 price is perfect. No need to change the price as I don’t have competition.
I teach how to buy products that are grouped together and create your own profitable products in my course “Magic $25”. The products I created using the Magic $25 formula were purchased with profit in mind first. At this point they are all still selling just fine at the $25 price.
In the future I will be looking for new multi-pack and bundle options that will be listed for $35. This is an easy way to get unique (only you sell these) products that Amazon buyers desire and will immediately qualify for free shipping.
Second – I looked at every product (priced at $25) that are competitive products (I am competing with other FBA sellers in price). These are products that I have purchased from Thrift Stores OR Wholesale OR Retail Arbitrage. If these products needed to have a lower price to gain better exposure… I lowered. I often (not always) priced within 2% of the lowest FBA seller.
Third – I looked at every product (priced near the $35 price) and raised or lowered to meet that specific price point. I didn’t look (yet) to see how much competition I have on those products. What I am testing is to see if the $35 price will be Magic.
It’s Not All Bad For Sellers
Remember this: Amazon is not out to “bust your business“… don’t take this change personally. All sellers are effected by any change that Amazon makes… it’s a pretty level playing field.
I’ll admit – when I first was notified of this change (moving free shipping from $25 to $35) I was a bit miffed. I have worked very hard to create an easy to use formula for Magic $25 over the last year. I used this formula myself and teach others to use it for profitable selling on Amazon FBA.
I had gotten to the point of Not Needing To Think (you all know I try not to think to much – it hurts my poor little brain).
Looking for the positive – I’d much rather have a Magic $35 than $25 any day of the week!
I have more “wiggle” room for profitable products. Instead of looking for products that cost me $7 or less, I am focusing on products that cost me about $10 and sell for $35 (it was just a matter of changing my formula). This gives me more options for new products and for selling product for a bit more profit than I was expecting.
Just remember – I’m always testing. This is a new “wrinkle” in selling products on Amazon FBA and will take time to see how these changes effect all sellers.
Watch this great video with Chris Green and Karin about Magic $35
That’s my story… and I’m sticking to it…