Amazon prices in the US are rising sharply, with nearly two-thirds of sellers increasing their prices in 2024, according to new research from SmartScout largely in response to increased FBA fees. But even with those increases, many say their margins are still being squeezed – we explore what that might mean for Amazon brands in the UK…
While UK fee structures aren’t identical to the US store, the direction of travel is very much the same and UK-based Sellers and Vendors are facing their own set of rising costs – from storage charges to fulfilment fees.
And, with many brands already operating on tight margins, is it time to consider your own price increases?
Here’s what we know…
The SmartScout figures reported that 65% of sellers said they’d raised their prices due to fee hikes, but 60% were still reported lower YoY profitability.
As we see it, there’s a lesson here for all brands – just raising your prices won’t alleviate pressures on your margins if you’re still leaking profits elsewhere.
And interestingly, what these figures also showed was that passing cost increases to customers doesn’t necessarily hurt sales – if you can clearly communicate value.
The importance of strong messaging
As Amazon experts, we’d never recommend becoming embroiled in a race to the bottom.
Instead, in this kind of climate, it’s more crucial than ever to reinforce what makes your products worth the price.
Take the time now to refocus on your listings, and optimise them to emphasise your:
- Product quality
- Fast, reliable fulfilment (especially FBA)
- Sustainability or ethical sourcing
- Consumer trust and brand reputation
And you’ll be much better placed to balance rising costs with your customer’s expectations.
How UK Brands Can Respond to Rising Amazon Prices in the US
Our experts have 4 action points for you:
- Make sure you’re reviewing your pricing strategy regularly, using good data to track your costs, your margins and what your competitors are doing. The key is not to delay necessary changes, but not to raise blindly either.
- Take the time to audit your FBA performance – are your fees where they should be? Could storage or inventory levels be optimised?
- Double down on your messaging, making sure your listings, A+ Content and ads highlight your USPs and product values.
- And think beyond price – customers will pay more if they trust you, love the product and get the benefit.
The Bottom Line
Wherever your brand is based, most Amazon businesses are facing the same challenges; rising costs, tighter margins and customers who expect more for their money.
It’s our considered opinion that the brands that survive won’t be the cheapest – they’ll be the sharpest.
If you need some commercial rigour, clarity and vision on your side, our Amazon experts are ready to step in – click here to book a call today.