Utilise gaps in referral fees more effectively.

Our new beta function optimises margins by taking staggered referral fees into account. Especially for products in certain Amazon categories such as: "Beauty, Health, and Personal Care", it can be advantageous to specifically adjust the price to benefit from lower fees and increase net profit.

We are pleased to introduce a new enhancement to our margin calculation, which is currently in beta. This new feature helps to further optimise margins by taking referral fees into account when calculating prices. This is particularly useful for products in the Amazon categories Baby Products, Beauty, Health, and Personal Care and Grocery and Gourmet, which fall into a tiered selling fee category.

Referral fees in detail

The referral fees are calculated based on the total referral price of a product and are staggered as follows:

  • 8.16 % for products with a total referral price of up to £10.00
  • 15.30 % for products with a total referral price of over £10.00

Example calculation for illustration purposes

Let's assume a product is to be optimised. Here are two scenarios:

  • £0.82 referral fees (8.16 %) for a referral price of £10.00:
  • £1.53 referral fees (15.30 %) with a referral price of £10.01:

Optimisation strategy

If a product is priced between £10.01 - £10.84, it may be more financially advantageous to reduce the price to £10.00. Why? Because it allows you to benefit from lower referral fees of 8.16% instead of 15.30%. This can increase the margin as the lower fees increase the net profit.

Conclusion

Our new sales fee optimisation feature helps to strategically set prices to maximise margins. Smart pricing can ensure that products remain competitive while maximising profits.

More information

This extension is part of our new margin calculation, which is in beta and is already helping to calculate smartly and save time. Read more about margin calculation and its benefits in our previous blog post: Calculate smart and save time: The new beta feature for margin calculation.

🤓 Visit our blog regularly for more useful tips and updates.