The add-on items program is Amazon’s way of trying to limit the financial impact of shipping these small, low-cost items. Since Amazon Prime members enjoy free two-day shipping, Amazon has to pay the cost to ship the products. This means Amazon is likely going to lose money on these kinds of items because of shipping costs and the low cost of the items.
According to Amazon, “The Add-on program allows Amazon to offer thousands of low-priced items that would be cost-prohibitive to ship on their own. These items ship FREE with Amazon Day delivery or with qualifying orders over $25.”
Historically, Amazon sent these items for free to Prime members in order to build brand loyalty. But the decision was ultimately made to move some of these items to the add-on program. In order to purchase add-on items on Amazon, customers must place an order totaling at least $25, which can include a mixture of add-on and non-add-on items or all add-on items.
Non-Prime shoppers can use a similar program called ‘Free Super Saver’ in which they can get free shipping on items in the program in an order totaling at least $50.
But how have add-on items on Amazon impact sellers?
For those that sell these lower cost, smaller products, it has caused rising concerns that sales will suffer due to the $25 order minimum customers have to meet in order to purchase the add-on items. There is speculation that customers who are only looking to purchase these inexpensive, lightweight products and do not want to spend at least $25 will just visit another online marketplace like Walmart or eBay, or purchase it in-store instead.
Even though it is not known exactly how items are chosen for the add-on items program, there are still some ways to combat having items placed in marked as add-on. The first is to increase the price of the item to at least $10. This obviously may deter customers from purchasing your product depending on how realistic that price is for your specific product. You could also take several items and bundle them together or offer a multi-pack of one item in order to justify charging a higher price.
Another obvious solution to avoiding having your items placed in the add-on program is to fulfill orders yourself. This eliminates the problem, but it means you will be responsible for all fulfillment. You could potentially use Seller-Fulfilled Prime to keep the Amazon Prime designation for your products.
If you sign up for Amazon’s Small and Light program, you will also avoid the add-on program. The Small and Light program allows customers to get free shipping on your items without the $25 order minimum. Check out this video about Small and Light for more information.
Sellers are no doubt going to be frustrated if their products end up being automatically selected by Amazon’s algorithm for the add-on items program since they have no choice but to comply. And while some customers may be upset about having to order at least $25 worth of items in order to buy a tube of lipstick or a pack of sparkly Play-Doh, Amazon feels it’s acting in the best interest of the customer with the add-on items program by still offering free shipping on small, inexpensive products. Ultimately, however, Amazon is going to act in its own best interest and turn profits when it can. And the add-on items program is a clear indication of that fact.