As a multibillion-dollar marketplace, Amazon has significant control over online commerce. Unfortunately, its policies are profit-driven and can, on occasion, negatively impact sellers and shoppers alike. The Amazon Add on item program is one such policy that benefitted the company but made many users very unhappy. Amazon essentially refuses to ship low-cost products individually. Instead, it uses a complex algorithm to automatically mark inexpensive items as Add-On, which means customers can only purchase the item if they have at least $25 worth of products in their shopping cart.
While this decision significantly increases Amazon's product portfolio and gives customers a range of items to choose from, it can also impact sales if you suddenly receive the Add-on badge on your product overnight. However, crafty vendors have devised several means to circumvent this without hurting the buyer. In this article, we'll discuss what Amazon Add-on Items are, how they affect Prime members and the sales of Amazon merchants. More importantly, we will also discuss tried and tested solutions to overcome the program's limitations for both sides.
👋 Hi! This post is brought to you by Sellzone, a blog designed by Semrush to help your ecommerce business grow. Semrush is the online visibility platform platform trusted by seven million users and 30% of Fortune 500 companies. Take advantage of Semrush's ecommerce tools by entering Semrush AppCenter.
Follow us on social media to read the latest strategies from the ecommerce community, and don't miss new opportunities to increase your profits:
What are Amazon Add-on Items (products)?
If you've seen a blue badge beneath the price of a product you wanted to buy, you may be wondering,' what is an add-on item on Amazon?' These badges are assigned to low-cost products that are too cheap compared to their shipping costs. The company introduced this program to avoid losing money on affordable products; this market is enormous, and the loss-making shipping costs could drain Amazon's profits.
In short, an Add-on item is a complementary product that can only be purchased alongside other products if the order costs at least $25. An automated system identifies products legible for the' Add-on Item' badge based on their price, with the only exception being the category of 'Gift Cards,' which don't count towards the $25 minimum.
There are several limitations to purchasing Add-on products, including:
- A cart cannot be comprised exclusively of Add-On Items.
- If the order doesn't meet the $25 requirement, all add-on items will be saved for later purchase
- You must include items fulfilled by Amazon to meet the $25 threshold
This program only affects specific categories of products, most of which are often purchased in bulk, such as office supplies or personal hygiene items. Furthermore, Amazon Prime members who shop compulsively aren't as affected either.
Does Amazon Add-On Items affect prime members?
The limitations imposed by the Amazon Add-on Items program also apply to Amazon Prime members; this means that the $25 threshold must be met on a single order if a Prime customer wishes to buy an add-on product. Given that Amazon Prime members typically benefit from numerous discounts on various products, it could be said that meeting the $25 mark is more challenging for shoppers that fill their shopping cart with mainly low-cost products.
The main issue lies in that Prime shoppers can't buy a standalone low-cost product anymore. Instead, they have to:
- Buy a bundle of similar or related products
- Fill the cart with other items until the threshold is reached
- Buy the product at another date with other products
- Search other online marketplaces for that particular item.
Did it affect sales?
This program did affect the sales in several ways; positively for some, negatively for other Amazon sellers. It mainly impacted merchants who specialized in selling inexpensive products the most. Luxury brands and mid-range product sellers were not affected.
Initially, this program was met with negative feedback among shoppers who couldn't buy small-priced items as before, which was reflected in the overall sales for many vendors. Searching for similar or identical products to bypass the add-on item limitations also became increasingly tricky as the system assigned the badges to more and more products daily.
However, numerous opportunities also arose as a direct consequence of this program. Vendors could now justify the increase in price on certain products; bundles became more attractive, and multi-pack products were in higher demand than usual. Sellers could also list their items for the Amazon Subscribe and Save program.
Subscribe & Save Program
The Subscribe and Save Program is open to all customers (Prime and non-prime) who regularly want to purchase certain low-cost items. They can select the items, set a purchase frequency, and enjoy a 10-15% discount while the items are delivered regularly to their doorstep. Free shipping on every order and no limitations on add-on products. This program is also free to add, modify or cancel at any time.
If you select products with Add-on Item badge through this program, the usual limitations are automatically bypassed. For sellers, the only challenge is that categories of S&S-legible products won't necessarily match with the categories of products with Add-on Item badges. Also, many shoppers will not subscribe to monthly purchases of non-essential items, narrowing the list of viable add-on' candidates' even further.
My products became Amazon Add-on Items – how to get rid of the badge?
There are several ways to circumvent the Add-On problem, including raising the price of standalone products, bundling them with other related items, or switching to Fulfillment by Merchant (from FBA). Each approach has benefits and drawbacks, so if you are wondering ‘how to change my Amazon product from being an add on item' let's discuss them in more detail:
Raise the price
The riskiest but most straightforward approach is to raise the price of a product with the Add-on Item badge. If the initial price of your product were, for example, $7.00, raising it to $11.00 wouldn't burden the budget of your customers too much, while there is a high chance that Amazon will remove the Add-on Item badge.
The most notable risk factors revolve around the willingness of your customers to buy a product that used to cost significantly less and Amazon's criteria for' awarding' the badge. The dilemma Amazon sellers face is raising the price by a small amount, favoring the customers and hoping the criteria will be met, or raising it considerably, increasing the odds of the badge being removed at the expense of potentially losing customers. Another challenge is that the dynamics of criteria for the badge fluctuate frequently. The badge could be removed but make a comeback the next day.
To reap the most advantages from this strategy, you can consider it for products that competitors are selling at higher prices or those where the average price is being increased by all sellers. You can use Semrush's Traffic Insights tool to analyze competitor listings using a reverse ASIN lookup and make sure your products are competitively priced.
Bundle low-priced items
Considering that all add-on products need to be shipped to the same address and by the same seller, using the bundling strategy is a much better option to bypass badge limitations. By providing more value to your customers, you increase your chances of them buying the product. This is an obvious choice for merchants that sell various products in similar categories and with relatively similar purposes. For example, you can bundle soaps and loofahs or several stationery items like pencils, erasers, and sharpeners with a pouch. After the program was launched, customers were more willing to purchase bundles if they saw multiple products they liked but couldn't purchase as separate items.
However, bundling is not applicable in all situations. For example, merchants that sell various' mismatched' products that can't be organically bundled (such as a thermometer, a golf stick toy, and a cigarette holder, for example).
Switch to FBM
The last method is to simply switch from FBA to FBM in your Seller account settings. For those who don't know, FBM means you ship the order yourself instead of asking Amazon to fulfill it for you. The FBA program lets you give free two-day shipping benefits to your customers. It would be difficult to make the same promises when fulfilling orders yourself. However, if the costs and fees of shipping won't drastically change by switching from FBA to FBM, you can make the switch for certain items. There are no drawbacks aside from forfeiting all FBA advantages while the Add-on Item issue is resolved.
The Amazon Add-on Item program only severely impacts those sellers who sell several very low-cost, everyday items. Others who have a larger and more varied portfolio are not much impacted. There are also several methods through which you can adapt to the new system and continue to meet sales targets for your low-cost items. You can try each of these strategies or combine them, but it is important to be aware of the potential drawbacks of each approach.
👋 Thanks for reading the post! Follow us on social media, and don’t miss new opportunities to increase your profits:
If your Amazon sales are not doing as well as you expect, you may be thinking of expanding to eBay. Is eBay a better option for e-commerce sellers today? Perhaps not! Read our Amazon vs. eBay analysis to discover which platform will make more money for you.