Analysis: Amazon reduces marketplace fees for low-value goods in Europe

Starting this February, Amazon Europe is reducing referral fees – a commission paid for products sold on the platform – in several high-volume categories. 

Pet clothing and food will see referral fees reduced from 15% to 5% for items priced up to £10 ($12.70/€11.70) or €10 ($11.90). High-volume categories targeted for cuts also include home essentials, food and delicatessen, and vitamins, minerals, and supplements.

The e-commerce giant will also expand reductions in its Fulfillment by Amazon (FBA) fees (a per-unit charge for storing, packing and shipping goods) for low-priced items and place a limit on how much sellers can be charged when running promotions.  

This means that more low-priced products will now qualify for reduced FBA fees, cutting fulfillment costs by an average of £0.40 ($0.51/€0.47) per unit.

“These updates offer more consistency by bringing fees in line with those in other regions, including changes we have made in other regions such as the US, and allow us to lower fees by aligning them closely with our underlying costs,” an Amazon spokesperson tells GlobalPETS.

Impact on SMEs

According to Amazon, over 60% of sales in its stores come from independent sellers, most of which are small and medium-sized enterprises (SMEs). EU-based SMEs alone sold over 1.3 billion products worldwide through the platform in 2024. 

“Sellers set their own prices when selling in the Amazon store. These fee reductions enable them to invest more in their businesses and offer customers competitive prices, creating value for both sellers and customers,” the company adds. 

E-commerce tax changes

A report from the global management consulting firm McKinsey & Company notes that de minimis exemptions – waivers of duties, taxes, and extensive customs procedures on low-value goods – have fueled the expansion of international e-commerce over recent decades.

Over the past year, several European governments have lowered de minimis thresholds or removed exemptions due to fiscal pressures, enforcement priorities or geopolitical dynamics, affecting billions of parcel shipments.

Changes to de minimis exemptions have taken effect worldwide. For example, the US eliminated its $800 (€735) de minimis threshold for all consignments, while the EU removed its duty exemption for imports valued at less than €150 ($164).

McKinsey reports that exporters are redirecting trade flows through alternative channels to mitigate disruptions from these changes. Chinese e-commerce platform Temu – one of the most exposed to these changes – has shifted inventory to warehouses closer to consumers and is building regional fulfillment networks.

Meanwhile, Amazon Haul, the retailer’s low-cost marketplace featuring many products from China, has expanded into the UK, Germany, Mexico and the UAE to diversify away from the US market and adapt to both the loss of de minimis exemptions and higher US tariffs on Chinese imports.

Focus on Chinese e-commerce players

The EU’s removal of the customs duty relief threshold for low-value goods was made in response to a surge in import volumes. In 2024, the value of low-value goods imported directly to the EU by consumers via e-commerce reached €4.6 billion ($5.4B), up from €2.4 billion ($2.8B) in 2023.

European authorities argue that ending the exemption levels the playing field for domestic businesses. 

Approximately 91% of imported goods under €150 ($164) in 2024 came from China, with shipment volumes rising from 1.9 billion items in 2023 to 4.17 billion in 2024.

According to the EU Commission, this increase coincided with “exponential growth” in Shein and Temu’s penetration in the EU market, where the platforms have collectively surpassed 75 million users. The Commission also notes that 65% of small parcels entering the EU were undervalued to avoid customs duties.