FBA New Selection Program - Comprehensive Guide for Amazon Sellers

Amazon continues to offer programs to help sellers maximize their profits and streamline their fulfillment operations, and the FBA New Selection program is one of the latest offerings. Designed to provide various benefits to both new and existing Fulfilled by Amazon (FBA) sellers, this initiative comes with several fee waivers, discounts, and rebates that make it easier for sellers to introduce new ASINs (Amazon Standard Identification Numbers) to the FBA network. However, like any program, it’s important for sellers to fully understand the potential advantages and concerns to avoid any pitfalls.

In this article, eMarspro outlines the key aspects of Amazon’s FBA New Selection program and highlights important considerations for sellers.

Key Benefits of FBA New Selection

The FBA New Selection program offers a variety of fee waivers and incentives for both branded and non-branded ASINs that are new to FBA. Some of the notable benefits include:

1- 10% Rebate on Eligible Sales

Sellers enrolled in the program receive an average rebate of 10% for sales of eligible parent ASINs that are new to FBA. The rebate is calculated based on the product category and referral fees charged by Amazon, offering a rebate between 0% and 12%. This rebate is applied to the seller's fulfillment fees the following month and can be used for up to 50 non-standard size units or 100 standard-size units for a period of 120 days after the first inventory-received date.

Potential Issue - Although the rebate can reach up to 12%, the actual rebate will vary depending on referral fees and other factors, such as additional shipping or gift-wrapping charges. This means sellers might not always realize the full potential of the rebate.

Solution - Sellers should carefully review the referral fees for their product categories and consider whether the potential rebate aligns with their profit margins. Regular monitoring of sales performance and costs can help sellers optimize this benefit.

2- Reduced Vine Enrollment Fee

Sellers enrolled in the program can receive a 25% discount on the Vine enrollment fee for eligible ASINs. Vine helps generate early reviews, which are crucial for building customer trust and driving sales. This discount applies to between 3 and 10 units per ASIN and must be used within 60 days of first inbound shipment.

Potential Issue - The Vine discount does not stack with other Vine-related promotions or the New Seller Incentives Vine benefit. Additionally, the discount is a one-time benefit per ASIN, which limits its long-term usability for multiple launches.

Solution - Sellers should strategically use the Vine enrollment benefit for products that need early reviews and where they expect the highest potential for sales growth. Planning the timing of Vine enrollments can help maximize the return on investment.

3- Free Monthly Storage and Liquidations for Standard and Non-Standard Size ASINs

Amazon is offering free storage for the first 100 units of each new standard-size parent ASIN and the first 50 units of each non-standard size parent ASIN for 120 days after the first unit is received at an Amazon fulfillment center. If inventory fails to sell, sellers can liquidate the units at no cost within 180 days of the first inbound shipment.

Potential Issue - Free storage only applies to the first 100 or 50 units received. Sellers with larger quantities could still incur storage fees for any excess units, and if the product doesn’t sell, automatic liquidation might result in minimal recovery value (5% to 10% of the item's selling price).

Solution - Sellers should assess the demand for their products and consider sending fewer units initially to take advantage of the free storage without risking excess inventory. Monitoring inventory turnover is crucial to avoid costly long-term storage fees. If liquidation becomes necessary, sellers should weigh the benefits of recovering a small percentage of the product’s cost versus having the inventory returned.

4- Returns Processing Fee Waiver

For apparel and shoe ASINs, Amazon will waive the return processing fee for up to 20 units per ASIN if they are received within 180 days of the first inbound shipment. This can be a significant cost-saving benefit for sellers in these categories.

Potential Issue - Only apparel and shoes are eligible for the return processing fee waiver, which limits the appeal of this benefit for sellers outside these categories. Additionally, the waiver only covers up to 20 units, so high-volume sellers might still incur return fees after exceeding that limit.

Solution - Sellers in the apparel and shoe categories should take full advantage of this waiver to minimize costs on returns. For other product categories, sellers should prepare for potential return costs and factor these into their pricing and return policies.

5- Global Enrollment for Multi-Store Benefits

Once enrolled in the FBA New Selection program, sellers automatically qualify for the program’s benefits across all Amazon marketplaces where they have an active account, based on their MCID and email address.

Potential Issue - While this global enrollment offers a streamlined approach, sellers must still navigate country-specific challenges such as import regulations, VAT, and differing customer preferences in international markets.

Solution - Sellers expanding into multiple Amazon marketplaces should familiarize themselves with local rules and fulfillment requirements. eMarspro can assist with international selling strategies to ensure smooth operations and compliance in foreign markets.

Seller Eligibility Criteria

To participate in the FBA New Selection program, sellers must be professional Amazon sellers. Those with an Inventory Performance Index (IPI) score below 300 are not eligible for the program benefits, and if the score falls below 300 at any future evaluation date (April 1 or September 1), the seller will be removed from the program.

Potential Issue - If a seller's IPI score falls below 300, they risk losing access to the benefits, which could result in increased fees or a loss of rebates and discounts. Sellers with inconsistent inventory management could struggle to maintain the required score.

Solution - Sellers should regularly monitor their IPI score and take steps to improve inventory management, such as addressing overstocked items and ensuring faster sell-through rates. Tools like the Amazon Inventory Performance Dashboard can provide insights into ways to maintain a high IPI score.

Key ASIN Eligibility Requirements

Only new-to-FBA parent ASINs are eligible for the FBA New Selection program. This means the ASIN must not have previously been sold through the FBA program. Items in the Media categories (Books, DVDs, Music, etc.) and used items are not eligible. Additionally, the rebate benefit is only available for unbranded child ASINs with low seller-fulfilled sales (five or fewer units per week).

Potential Issue - The limitation of eligibility to new-to-FBA ASINs could restrict sellers who frequently reintroduce existing products into FBA. Also, sellers of media products or used items won’t benefit from this program.

Solution - Sellers should focus on introducing new products to the FBA program to maximize eligibility. For media and used-item sellers, alternative Amazon programs might be a better fit.

Frequently asked questions

1- How is the rebate calculated?

Enrolled sellers can earn a 10% rebate on average from their qualifying sales. To estimate your rebate, multiply your qualifying sales by the minimum rebate rate in the corresponding product category.

The rebate benefit is calculated based on the referral fees for each product category. To determine the rebate, Amazon calculates the referral fee percentage per category that applies to each sale minus 5%. This results in a referral fee of 5% for most product categories.

Based on this calculation, a rebate between 0% and 12% is applied to your fulfillment fees the following month that it’s earned. The maximum rebate that you can earn is 12%.

The rebate amount will be applied to your fulfillment fees on next month’s fulfillment fees at the order level and any unused amount expires one year after first applied to your account. When payments cover the entire fulfillment fee on a given order, the rebate will be applied in the background, and the fulfillment fee section will not be shown as a separate line item in the transaction.

Your actual rebate rate may vary based on factors such as additional shipping and gift-wrapping fees, which can vary between sellers.

2- Where can you track my benefits for the program?

After enrollment, you'll have access to the FBA New Selection dashboard. The dashboard shows your engagement with the program, including the benefits that you receive and the ASINs that qualify.

3- How do liquidations work?

Amazon sends your inventory to wholesale liquidators, allowing you to recover typically 5% to 10% of an item’s average selling price. Liquidating inventory offers an alternative to having your inventory disposed of or returned to you.

While FBA New Selection only provides one free value-recovery option through the program in the US, you can still remove inventory through other removal channels, if preferred.

For eligible parent ASINs that fail to sell a single unit in the first 180 days, Amazon will automatically liquidate this inventory for free.

4- Are you limited to sending 100 or fewer units to fulfillment centers?

No, you can send in as many units as you like. However, only the first 100 units of each eligible standard-size ASIN, and the first 50 units of each eligible non-standard size ASIN that are received at fulfillment centers will qualify for the fee waivers.

5- Can you receive both the New Selection rebate and the New Seller Incentives bonus?

For new brand owners, the New Seller Incentives bonus will apply first. You can receive the New Seller Incentives bonus for one year after eligibility is determined, or for your first $1 million in branded sales, whichever comes first. Afterwards, you will qualify for the New Selection rebate.

Final Thoughts from eMarspro

The FBA New Selection program offers valuable benefits to sellers looking to introduce new ASINs to Amazon’s fulfillment network. However, it’s important to fully understand the limitations and eligibility criteria to avoid unexpected fees or missed opportunities. Sellers should use this program strategically to ensure they maximize the value of the rebates, storage waivers, and return processing benefits.

At eMarspro, we’re committed to helping sellers navigate these programs and optimize their performance on Amazon. Contact us today for expert guidance on leveraging Amazon’s FBA New Selection program and other seller opportunities.