Fulfillment Fee Rebate: How to Reduce Amazon FBA Fees in 2024

In 2024, Amazon introduced adjustments to its fee structure, most notably an increase in fulfillment fee rebate for certain product categories. 

This has understandably prompted sellers to explore strategies to minimize or offset these expenses. Fulfillment fee rebates, combined with reimbursement services and optimized inventory management practices, offer effective solutions for navigating this challenge. 

It’s important to remember that Amazon’s fulfillment fees are designed to cover the Amazon FBA cost associated with storing, picking, packing, and shipping your products. 

While the fee increases may seem like a burden, they also reflect the rising costs of labor, transportation, and warehouse space. 

fulfillment fee rebate

Amazon FBA Fees 2024

Fulfillment by Amazon (FBA) offers sellers a convenient solution for order fulfillment, storage, and customer service. 

However, FBA fulfillment fees can significantly impact your bottom line. 

Pick & Pack Fees: These fees are charged for pet items and are based on the size and weight of your product. They cover the costs associated with Amazon’s warehouse staff picking your products from storage shelves, packing them for shipment, and preparing them for dispatch. 

Inventory Storage Fees: Inventory storage fees are charged monthly based on the amount of space your products occupy in Amazon’s fulfillment centers. These fees are tiered, with higher storage costs for products that have been in storage for longer periods. Effectively managing your inventory levels is crucial to minimizing storage fees. 

Order Fulfillment Fees: Order FBA fulfillment fee is charged per item shipped and cover the costs associated with transporting your products from Amazon’s fulfillment centers to your customers. FBA pricing is determined by the product’s weight, dimensions, and destination zone. 

Optimized Inventory Management

Effective inventory management is crucial for reducing Amazon FBA fees. By proactively forecasting demand and maintaining optimal stock levels, you can avoid stock outs that lead to lost sales and negative customer feedback, and excess inventory that accumulates storage fees. 

Monitor and Manage Inventory Levels

Regularly analyze your historical sales data to identify sales trends and seasonality. Use sales forecasting tools to predict future demand for each product. 

Develop a data-driven inventory plan based on your sales forecasts. Set reorder points to ensure you have enough stock to fulfill orders without stockouts. Regularly monitor your inventory levels and adjust your reorder points as needed to account for fluctuations in demand. 

Consider using inventory management software or tools offered by Amazon Seller Central to automate these processes and streamline inventory management. These tools can help you track inventory levels in real time, generate reorder alerts, and optimize your fulfillment strategy. 

Evaluate Storage Options

Analyze the cost-effectiveness of storing your products in Amazon’s fulfillment centers. Consider factors like product size, weight, and historical sales velocity. 

If you have slow-moving or bulky items, storing them yourself or using a third-party fulfillment center might be more cost-effective than Amazon’s fulfillment options. Additionally, explore Amazon’s removal order options to remove excess inventory from fulfillment centers and avoid ongoing storage fees. 

If you plan to relaunch these products later, consider using Amazon’s partnered carrier program to reduce inbound shipping costs when you send them back to Amazon. 

Fulfillment Fee Rebate with FBA New Selection Program

The FBA new selection program incentivizes sending new products to FBA by offering a rebate on fulfillment fees for a limited time (eligibility criteria apply). 

Explore this program if you’re launching new items or expanding your product catalog on Amazon. 

Take advantage of the free storage and removal or return options offered by the program to further reduce upfront costs associated with introducing new products to FBA. 

Adjust Product Dimension Weight

Accurate product dimensions and weight are necessary for avoiding excessive fulfillment fees. 

Use accurate measuring tools to determine your product’s length, width, and height in inches (avoid rounding), Even slight discrepancies can lead to higher fees if your product gets categorized as oversized. 

Include the weight of your product’s packaging in the total weight entered on your listing. 

Product Bundling

Creating strategic product bundles to potentially reduce per-unit fulfillment fees. 

By bundling complementary products, the total weight of the bundle might fall into a lower fulfillment fee tier compared to the individual items shipped separately. This can lead to cost savings, especially for lighter products. 

Ensure the bundled products are complementary and appeal to customer needs. Don’t force unnatural pairings that might not sell well. 

Clearly describe the bundled products in your listing and include high-quality images showcasing the entire bundle. 

Multi-Channel Fulfillment (MCF)

MCF is a valuable option for sellers who fulfill orders through their own channels or use fulfillment centers outside of Amazon’s FBA network. 

MCF allows you to store inventory in fulfillment centers closer to your customer base. This can significantly reduce fulfillment costs, especially for high-demand, fast-selling products. Faster delivery times can enhance customer satisfaction and potentially boost sales. 

Carefully evaluate the costs associated with managing your own fulfillment or partnering with a third-party fulfillment center (3PL) outside of FBA. 

MCF requires management from multiple channels, which can add complexity to your operations. Ensure you have the necessary systems and processes in place to handle fulfillment efficiently. 

Work with Third-Party Logistics Partners (3PLs)

Partnering with a 3PL can be a strategic move for some sellers, particularly those dealing with high-volume or bulky items. 3PLs can offer several advantages that can translate to significant cost savings and operational efficiencies. 

3PLs often have economies of scale that allow them to negotiate lower shipping rates with carriers compared to what you might be able to secure on your own, which can significantly reduce your fulfillment costs, especially for large or heavy products. 

Many 3PLs specialize in warehousing and distribution, with extensive experience in optimizing storage space, picking and packing processes, and expediting order fulfillment. Their expertise can help you streamline your fulfillment operations and potentially reduce fulfillment errors. 

As your business grows, your fulfillment needs will evolve as well. 3PLs can provide the scalability you need to accommodate increasing order volumes without significant upfront investments in infrastructure or labor. 

Many 3PLs offer a wide range of value-added services beyond basic storage and shipping, such as kitting, labeling, returns processing, and even gift wrapping. These services can help you enhance your customer experience and free up your resources to focus on core business activities. 

Use Amazon Seller Reimbursement Services

Even with meticulous planning and execution, discrepancies can sometimes occur within the complex world of FBA Fulfillment by Amazon. 

Fortunately, Amazon offers Seller Reimbursement Services, a mechanism for sellers to recoup potential losses due to fulfillment errors or fee miscalculations. 

Regularly review your reports for potential discrepancies like lost/damaged inventory, incorrect fees, or return shipping errors. 

Seller Central offers a user-friendly interface for submitting reimbursement requests. 

  1. Navigate to the “Reports”section in Seller Central. 
  2. Locate the specific report highlighting the discrepancy (e.gFBA inventory Adjustments Reports). 
  3. Identify the relevant item or transaction. 
  4. Use Seller Central’s tools to initiate a reimbursement request, providing clear documentation to support your claim. This documentation might include pictures of damaged products, proof of purchase for the product, or communication records with Amazon customer service.