What Amazon’s Small and Light Retirement Means for Low-Price Products

Amazon recently announced the retirement of its Small and Light program, a move that is bound to impact brands relying on cost-effective fulfillment for their low-priced items. Starting August 29, 2023, sellers must adjust their strategies, especially those targeting price-sensitive product categories.

Key Takeaways

• 🔸 Amazon is retiring Small and Light by August 2023, impacting low-priced SKUs.
• 🔸 Standard Fulfillment by Amazon (FBA) now applies to these products, increasing fees and thresholds.
• 🔸 Brands must revisit their pricing structure and consider bundling strategies to meet profitability goals.
• 🔸 Planning ahead with partners like Fifth Shelf can ease fulfillment challenges.
• 🔸 Diversifying inventory strategies avoids over-reliance on any one fulfillment setup.

Why Did Amazon Retire Small and Light?

Small and Light was designed to cut down storage and fulfillment costs for lightweight, low-cost items. However, as Amazon evolved, operational needs shifted to focus on profitability and scalability. The retirement of this program removes lower-margin benefits for sellers, pushing them into standard FBA, where fees and processes are higher.

Retail Dive highlights that e-commerce programs like this are often retired when logistical expenses outweigh their operational benefits. Many sellers must now adjust their approach to address higher costs while maintaining competitive pricing.

How Low-Priced Products Can Survive the Shift

To adapt, sellers should rethink pricing, adjust packaging sizes, or bundle related items. For instance, bundling can keep perceived value high and help maintain profitability under standard FBA. Reviewing profitability thresholds outlined in the program guide can help brands align with new guidelines.

Another strategy includes partnering with companies like Fifth Shelf, known for offering fulfillment solutions and locked-in shipping rates through 2026. Such trusted partners can assist in mitigating fee increases for brands transitioning from Small and Light.

What Comes Next for Amazon Sellers?

As the retail landscape changes, flexibility remains crucial. Sellers reliant on Amazon's ecosystem should diversify sales channels, optimize their PPC spend using expert strategies like those explained in this guide, and explore cost-saving measures like direct wholesale partnerships (DWP).

Learn more about adapting to Amazon's evolving policies in our detailed post on Amazon Vendor Central. For insights regarding recent shipping adjustments, visit this article.

At Fifth Shelf, we specialize in helping brands like yours navigate Amazon's constant changes. From logistics to growth strategies, we’re here to help turn challenges into opportunities.