Amazon adds more fees, which will be implemented in August!

As the peak season approaches, Amazon's changes and adjustments are becoming more frequent. After canceling excess storage fees and increasing Prime exclusive discount fees, Amazon recently added another fee: advertising management fees.

It was learned that on August 1, sellers received emails from Amazon regarding the new advertising management fees in Canada.

▲ The picture comes from the seller’s disclosure

According to the email, starting from August 15, 2024, Amazon will charge advertising management fees for advertisements placed on the Canadian site.

It is worth mentioning that before this, Amazon had already charged this fee for advertisements placed in France, Italy, Spain, the United Kingdom, Austria and Turkey .

Currently, the advertising management fee rates in these regions are: Canada 3%, UK 2%, Italy 3%, France 3%, Spain 3%, Austria 5%, Turkey 7.5% , and may change according to seasonal and other factors.

▲ The picture comes from the seller’s disclosure

As Amazon has recently added many new charging items, the news has also caused an uproar in the industry: many sellers are dissatisfied with Amazon's new advertising management fee, believing that this fee further increases operating costs and squeezes profit margins .

Some senior sellers further pointed out that this fee is different from normal advertising fees, which are charged on the corresponding site, but is calculated based on the clicks of the buyer's account . That is, if an Amazon seller opens an advertisement on the US site and buyers from Canada, France and other countries click on the advertisement, the seller will incur corresponding advertising management fees.

▲ The picture comes from the seller’s disclosure

It is understood that the advertising management fee is also known as the Regulatory Advertising Fee. According to local Digital Services Taxes (DST) or other regulations, when advertising is placed in certain countries or regions, or when advertisers purchase advertising in certain countries or regions, the Regulatory Advertising Fee may be charged.

Judging from the content of the email, in order to comply with the regulations of these countries, Amazon has transferred this part of the cost to the sellers to ensure the continued operation of the advertising service. For sellers, this is undoubtedly adding to the already tight profit margins.

Here, it is also recommended that you understand this fee and how it is calculated so that you can take the additional costs into account when formulating your marketing strategy.

It is also worth mentioning that European sellers, whose costs have long been deeply affected by this fee, have also recently ushered in a major change in tax policy.

It is learned that a new policy regarding European local accounts of Amazon has recently come into effect.

According to Amazon's announcement, starting from August 1, 2024, store opening, logistics and services currently provided by Amazon Services Europe s.àrl (hereinafter referred to as "ASE") will be transferred to Amazon EU s.àr.l. (hereinafter referred to as "AEU").

▲ The picture comes from the seller’s disclosure

Specifically, if the seller's company is established in the UK, Germany, France, Italy, Spain, the Netherlands, Poland, Belgium or Sweden , the local AEU branch will issue invoices to the seller from August 1, 2024. In other words, local VAT rules will apply to the fees charged by Amazon, Amazon will deduct VAT when charging the fees, and the seller's cash withdrawal amount will change.

Judging from the content of the policy, the impact of this policy on European sellers with non-local accounts is not significant. But for cross-border sellers using European local accounts, this news is like a heavy hammer that has increased costs again.

It is understood that after Amazon began to implement withholding VAT on September 1, 2023, some service providers or sellers will choose to register companies in Europe to avoid the platform's VAT withholding requirements and save tax costs. However, some operations do not comply with the platform's rules. Therefore, since 2023, Amazon has launched multiple rounds of sweeps targeting European local accounts.

Based on this, as soon as the new policy came out, many sellers understood it as: European local accounts will also start to charge value-added tax.

However, in fact, some sellers further pointed out that the Amazon charging items in this policy refer to store fees, category commissions, and advertising fees . Unlike the value-added tax for non-European local accounts, this VAT is aimed at these charging items rather than withholding the seller's entire order sales .

According to the feedback from sellers in Europe, Amazon has started to charge commissions and 20% tax on FBA shipping fees from relevant sellers since August 1, but the commission tax on FBM orders has not been collected yet. Therefore, some sellers speculate that this new policy is still in the process of being perfected, but the specific details still need to wait for further actions from Amazon. If you have more knowledge about this new policy, you can also share it in the comments section~

Finally, I would like to remind you that Amazon’s policies have been updated frequently recently, so you need to pay more attention and adjust your strategies in time to avoid unnecessary financial pressure.