Approximately 91% of Amazon sellers express satisfaction with the prompt delivery of their products globally. This efficiency is primarily attributed to the FBA (Fulfillment by Amazon) service – a specialized logistics program by Amazon enabling sellers to stock their goods in Amazon warehouses.
What advantages do sellers gain by utilizing FBA? Amazon warehouses are strategically positioned across the globe. Storing your products in these warehouses allows for expedited delivery to customers, emerging as a pivotal factor in fostering customer loyalty.
Furthermore, utilizing FBA presents the opportunity to economize on storage expenses, owing to the absence of external cross-border fees. FBA facilitates payment solely for domestic shipping fees in the countries where the Amazon warehouses housing your products are situated.
Amazon has recently implemented alterations to the payment structure for FBA commissions in the United States. These changes will occur in three phases:
Accordingly, the fees will undergo changes on February 5:
Commissions for Regular Products:
This ranking and commission change are beneficial only to sellers whose products had a lower weight than the maximum weight that Amazon previously ranked. In conclusion, starting February 5, 2024, Small Standard Size and Large Standard Size products will be ranked in smaller intervals (2 and 4 ounces, respectively), resulting in a total of 21 fees instead of 13. This change may reduce fulfillment fees for product owners with weights within the new intervals.
The 2nd significant change is scheduled for April 15. Amazon plans to reduce the commissions for Small Standard Size and Large Standard Size products.
This reduction will result in lower commissions for:
In conclusion, starting April 15, 2024, sellers of Small Standard Size products may experience a reduction in commissions by 15-17 cents, and Large Standard Size products by 17-33 cents.
The Monthly Storage Fee, which is the charge for storing products in Amazon warehouses, calculated for each unit separately and debited monthly, is also undergoing changes, but these changes won’t apply universally.
Effective April 1, 2024, the Monthly Storage Fee for Small and Large Standard Size products will undergo a reduction of $0.09 per cubic foot. It’s important to note that this adjustment is applicable exclusively during the off-peak sales period, spanning from January to September.
The revised fee structure is as follows:
It’s crucial to emphasize that all other storage fees will remain unchanged, ensuring stability in cost structures for various product categories.
Commencing April 1, 2024, Amazon will implement modifications to the storage utilization fee, introducing charges for products with a storage utilization index of 22 weeks or more. This marks a reduction from the previous threshold of 26 weeks. Previously, these fees were differentiated based on size and categorized into four tariffs (up to 26 weeks, 26-39, 39 weeks and more, for new sellers). The updated structure will now feature additional tiers (up to 22, 22-28, 28-36, 36-44, 44-52, 52+, for new sellers).
In essence, it can be inferred that this adjustment will result in increased fees for all sellers, and sellers with an index of less than 22 weeks will now be obligated to pay this fee.
Effective February 15, 2024, Amazon will implement changes to the aged inventory fee for products stored in Amazon’s warehouses for a duration of 271 to 365 days. It is important to note that this adjustment does not impact clothing and accessories, and for inventory with a shorter storage duration, the fees will remain unchanged.
In summary, the commission will experience an increase ranging from $1.65 to $1.7 compared to the previous period until February 15, 2024:
Effective February 5, 2024, Amazon is revising the fee structure for packaging products in bubble wrap, specifically for Standard Size products. Sellers should be aware of a fee increase of $0.24 for this specific packaging service. It’s essential to note that fees for all other products, packaging types, and services will remain unchanged.
Introducing the Ships in Product Packaging (SIPP) Program!
Amazon is launching the Ships in Product Packaging (SIPP) program, an initiative offering sellers exclusive discounts on FBA fees for each product unit. Sellers qualify for this preferential program when their products are shipped in their original packaging, eliminating the need for additional Amazon packaging.
Here are the program details:
Starting April 1, 2024, all sellers will face an additional fee for low inventory levels specifically for Small and Large Standard Size products.
Amazon states that due to suboptimal distribution of small stock, products face slower delivery as they move between fulfillments. Amazon incurs higher transportation costs in this process, justifying the introduction of this fee.
Check your “historical days of supply” on the FBA Inventory tab in Seller Central to understand this metric better.
For sellers with rapidly selling products and smaller inventory quantities, this may pose a challenge.
Therefore, to avoid incurring this fee, we recommend replenishing your stock on time and ensuring a margin, especially if your product tends to sell quickly.
Exemptions from this fee include:
Commencing March 1, 2024, a new fee will be implemented for Small and Standard Size products that fail to meet FBA requirements:
Starting March 1, 2024, a new commission for placing products on FBA will be introduced. The amount of this fee will depend on the size of the product and the number of fulfillment centers to which the product is delivered.
The commission’s amount will be displayed when you create a shipment, and you can choose the option yourself.
For example, for owners of Small and Large Standard Size products, the commission for delivery to one fulfillment center will be $0.21-0.68. For those who send their products to multiple centers independently, the discount can be up to 100%.
For owners of Large Bulky Size products, the commission for delivery to the first location is $2.16-6; for delivery to several locations, you can also get a discount of up to 100%.
Factors influencing the discount:
New commissions can affect your costs and financial performance. An analysis and an optimized sales strategy will help minimize the negative impact of these changes on your business.
Thanks to our experience and a deep understanding of the specifics of FBA commission changes, we are ready to provide you with professional support and advice. Contact us for an individual consultation and to develop an effective action plan.
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