For many customers, Amazon has become the go-to online platform for anything and everything they need. No matter how small or random an item you’re looking for, Amazon will have it. Whilst the extensive product range is one of the major unique selling points of the internet giant, it also poses new challenges. One of them being the problem of selling low-cost, light-weight items at a profit.
To tackle this challenge, Amazon came up with the Add-on Program.
What are Amazon Add-on Products?
Amazon add-on products are small, light-weight and low-cost FBA items. Due to the expensive shipping costs involved in sending these articles individually, Amazon decided that these items can only be shipped as part of a larger order with a minimum value of $25. Items classified as Add-on are marked by the blue stamp on the top right corner of the product page.
Consequently, Amazon customers cannot purchase products such as hygiene, snacks and office supplies individually anymore.
Whilst this might pose constraints on customers and sellers, it makes economic sense for Amazon:
- For many items, the shipping costs Amazon payed were higher than the referral fee they received. As a result, Amazon made a loss on these items.
- Many add-on products were previously only available in bulk, or not available at all. Keeping Amazon’s customer-centric approach in mind, the add-on program makes total sense, as it significantly increases the variety of products available on the platform.
However, the Add-on program has not been received favourably by the Amazon community.
The Controversy Around Amazon Add-on Products
Since its introduction, the Amazon add-on program has caused controversy amongst customers as well as Amazon sellers.
Minimum Order Value of $25 for Add-on Items Infuriates Amazon Customers
Whilst customers have access to more products, it also means that ordering a pack of toothpaste from the comfort of your couch is no longer possible. Especially for Prime members this is a major draw back.
Even though free shipping is extended to add-on items, finding products to get to $25 can be more cost and time-intensive than going to the store around the corner.
Amazon Sellers Worried about Crashing Sales Numbers for Add-On Items
The effect of Amazon’s add-on program has many sellers selling low cost items worried. Whilst some might argue that the minimum order value forces customers to select additional items and thereby increases overall sales, most sellers report crashing sales numbers instead.
Since many customers come to Amazon looking to order a specific item and cannot do so without having to spend more money to get to $25, they leave to buy the products somewhere else. Some might switch to other online retailers like Walmart and Ebay, others will simply make the trip to a brick-and-mortar store instead.
What can I do when my Amazon products are turned into Add-on items?
Unfortunately, the algorithm used by Amazon to determine add-on products is not known. Rumour has it that it has to do with price and weight, but the exact cut-offs remain a secret. Even if two products have the same specifications, one might be an add-on and the other one isn’t.
If your item have been turned into add-on items by Amazon, there are a few things you can do as a seller to avoid plummeting sales:
- You can increase the price. Some sellers found that for them, the cut-off price was 9.99$. Raising your product price to 10$ might remove the add-on product label and you can continue selling your items as usual. The drawback of this strategy is that for many products (especially those classified as add-ons), this price would deter customers from buying them in the first place.
- Bundle add-on products with other items to raise the price. This is the usual business case of upselling – you bundle two complementary products together to sell more, and in this case to raise the price above the mark of add-on items. However, whilst this is a viable option for sellers with a relatively small range of products, it will be very time-consuming for larger sellers and vendors.
- Offer multi-pack options of the same item. On the same product listing as the add-on item, add the option of buying a multi-pack. This increases the chances of you making the sale, as people might be more likely to purchase a larger quantity of the product they actually want and don’t go off looking for more products to buy from other sellers to reach the minimum order value.
- Switch to FBM. This strategy takes care of your add-on product problem, but it also derives you of the benefits provided by FBA.
- Make use of Amazon’s Small and Light Program. This is a program for light-weight (15 ounces or less), low-cost (less than 15$), small (16x9x4 inches or less) and fast-moving (25+ units per month) items offered by Amazon. Signing up your products for this options removes the minimum order value of $25 and includes free shipping.
- Extend your product range to more expensive products. More expensive products often offer a higher margin. With proper product research and niche analysis, you can uncover products that sell and not only avoid the problem of add-on products, but increase your profits on Amazon overall.
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