Overcoming Amazon Fee Changes 2024 with Winning Tactics!
For many FBA sellers, 2024 has brought a wave of adjustment to Amazon fee changes. While there was a welcome decrease in the base FBA fulfillment fee, the introduction of new fees, such as the Amazon Inbound Placement Fee, has caused concern.
“Optimizing fulfillment fees and inventory management are crucial aspects of success on the platform. This includes closely monitoring international shipments, maintaining adequate stock levels, and potentially considering third-party logistics (3PL) services in strategic, local locations.”, says Burak, CEO of Forceget.
For More Information: Amazon Fee Changes 2024: Winning Strategies to Beat the System!
Which Fees Has Amazon Increased
Inbound Placement Fee: This new fee applies to sellers who choose specific placement options for their inventory within Amazon fulfillment placement centers.
This can impact sellers who require specific storage locations for their products due to size or seasonality.
FBA Capacity Limits: Amazon has implemented capacity limitations within its Amazon FBA capacity limits.
When these limits are reached in specific categories, additional placement fees may be applied to inbound shipments.
FBA Removal, Disposal and Liquidation Fees: The FBA removal fees associated with removing, disposing of, or liquidating unsold inventory have seen some adjustments in 2024.
It’s crucial to stay updated on these changes to manage these costs effectively.
What are the New Amazon Fees in 2024?
“Amazon’s fee structure can be intricate, yet with recent changes including a reduction in standard-sized FBA fulfillment fees balanced by the introduction of new charges like inbound placement fees. To best navigate through this, explore Amazon’s detailed fee schedule which outlines size and weight tiers affecting fulfillment costs. Consider optimizing your packaging with smaller, lightweight materials to potentially qualify for lower tiers, but always prioritize product protection during shipping.”
When it comes to reduced fees, starting from April 15th, there’s an average decrease of %0.20 per unit for standard-sized products and $0.61 for large bulky items.
For standard-sized products, non-peak (January – September) monthly storage fees went down by an average of $0.09 per cubic foot effective April 1st.
Apparel selling fees have been decreased of $20:
- Items under $15: selling fee went from 17% to 5%.
- Items between $15 and $20: selling fee went from 17% to 10% which was effective as of January 15th.
Increased fees include inbound placement service fees which are applied on standard or large bulky-sized products, starting at an average of $0.27 and $1.58 per unit, respectively from April 15th.
Storage fee for old inventory increased for items stored over 271 days which was effective as of February 15th.
What is Amazon FBA Inbound Placement Fee?
The Amazon FBA Inbound Placement Fee is charged for selecting specific placement options for your inventory within Amazon fulfillment centers.
The cost varies depending on the chosen placement type (standard, reserved, or overflow) and the size of your products.
- Standard placement is the most common option and comes with no additional fee.
- Reserved placement offers sellers more control over the location of their inventory within fulfillment centers, but it comes at a cost.
- Overflow placement is used when Amazon doesn’t have space for your inventory in its standard locations and needs to store it in less accessible areas.
“In the past, Amazon offered free fulfillment center transfer for some inventory. However, this policy has changed. Currently, there are no specific fees for transferring inventory between Amazon fulfillment centers.”
“However, it’s important to consider the impact of Prime delivery speeds. While Amazon doesn’t charge a separate fee for fulfillment center transfers, having inventory closer to your customers can help ensure faster Prime delivery. This can be particularly important for sellers who participate in the “Buy with Prime” program, where Prime fulfillment is mandatory.”
What is Amazon FBA Fulfillment Fee?
The FBA fulfillment fee covers picking, packing, shipping, and customer service for your products sold through FBA.
While the base fee saw a slight decrease in 2024, it’s important to factor in potential additional fees like Amazon FBA Inbound Shipping Cost and the dimensional weight of your products.
Understanding the FBA fees structure and how it can impact your bottom line is necessary for making informed decisions about your fulfillment strategy.
What are the FBA Capacity Limits?
FBA capacity limits refer to limitations Amazon places on the amount of inventory sellers can store in their fulfillment centers. These limits are implemented to ensure efficient warehouse operations and product flow.
“It’s important to be mindful of Amazon’s FBA capacity limits, which determine how much inventory you can store in their fulfillment centers. Exceeding these limits can result in storage overage fees. On the other hand, consistently maintaining inventory levels below certain inventory levels (typically around 30 days supply) can trigger Amazon’s low inventory fee. This fee is intended to encourage sellers to maintain sufficient stock to meet customer demand and avoid stockouts.”
When specific categories reach capacity, Amazon may:
Restrict inbound shipments: This means they may temporarily stop accepting new inventory shipments in that category until space becomes available.
Implement additional fees: Sellers attempting to send in inventory during capacity limitations may lead to extra charges on top of the standard FBA fulfillment fees.
What are FBA Removal, Disposal and Liquidation Fees?
Amazon FBA Removal Fees apply when you request Amazon to return unsold or unwanted inventory from their fulfillment centers back to you.
The cost is determined by the size and weight of your items. FBA removal fees can vary depending on the origin and destination locations, so it’s important to factor this in when considering removal requests.
If you choose not to have your inventory returned and instead want Amazon to dispose of it, you’ll increase the FBA disposal fee. These fees also vary depending on the size and weight of your products, and may also be influenced by the disposal method used.
“There are situations where disposing of excess or slow-moving inventory can be a good business decision. While Amazon doesn’t directly dispose of your inventory, they do offer an FBA liquidations program that allows sellers to sell unwanted inventory to third-party liquidators at a discounted rate.”
In some cases, Amazon may recycle or donate your products, but this is not guaranteed.
If you have any environmental or ethical concerns about your products being disposed of, removal may be a preferable option, although it will come at an additional cost.
FBA Liquidation Fees allows Amazon to sell your excess inventory on your behalf through a third-party liquidator. There are two components to the liquidation fees:
Liquidation Referral Fee: This is a percentage (currently 15%) taken from the gross proceeds of the sale by the liquidation company.
Liquidation Processing Fee: This fee covers the cost of Amazon preparing your products for liquidation and is determined by the size and weight of your items.
How to Overcome These Fees?
Focus on selling products with higher profit margins to absorb potential Amazon fee changes. Consider cost optimization strategies like private label manufacturing to potentially reduce product costs.
Implement proactive inventory management practices to minimize storage and fulfillment fees. Use forecasting tools and data analytics to predict demand and optimize inventory levels.
Opt for alternative fulfillment solutions outside of FBA for specific products. Consider using a hybrid approach where you fulfill high-volume or low-margin items yourself and leverage FBA for other products.
Pay close attention to the dimensional weight of your products, as this can significantly impact Amazon FBA inbound shipping cost. Consider repacking products to reduce their dimensional weight and minimize fulfillment costs.