Amazon is introducing significant changes to Amazon Seller fees in the new year. This marks one of the most comprehensive FBA fee adjustments in recent years, which means both challenges and opportunities for sellers in 2024.
Here are the 5 changes on Amazon seller fees you need to be aware of:
- Additional Fulfillment Center Transfer Fees (discounts on those fees are available if sellers ship inbound stock to multiple warehouses instead)
- Low Inventory Fees for sellers not shipping enough units / with consistently low FBA inventory
- Long Term Storage & Aged Inventory Fee updates (this includes storage utilization surcharge, removal, disposal, aged inventory, prep, and inbound defect fees)
- Return Fees Increase for products with a high return rate
- Reduced Referral Fee in Amazon for apparel priced lower than $20 & New Lower Pricing Structure for Amazon Vine
These changes will impact sellers in various ways, affecting everything from profit margins to inventory management strategies. Read on for the latest updates and some tips on how to navigate the 2024 Amazon seller fees and FBA fee changes to maintain, and even enhance, your competitive edge on one of the world’s largest online marketplaces.
Overview & Key Dates For Amazon Seller Fees & FBA Fee Changes:
- Starting January 15, 2024- reduced referral fee in Amazon for apparel products priced below $20,
- Starting February 5, 2024- The Ships in Product Packaging (SIPP) program will also offer fulfillment fee discounts.
- Starting from March 1, 2024- Inbound Placement Service Fee, applicable to both standard and Large Bulky-sized products. Fees will average $0.27 per unit for standard-sized products and $1.58 per unit for Large Bulky-sized products.
- Effective from April 1, 2024- The Low-Inventory-Level Fee will penalize sellers for maintaining low inventory levels.
- Non-peak monthly storage fees for standard-size products will be reduced by an average of $0.09 per cubic foot from April 1, 2024.
- Effective from April 15, 2024, FBA Fulfillment Fee Rates rates will reduce by $0.20 per unit for standard-sized products and $0.61 per unit for Large Bulky-sized products.
- Effective June 1, 2024, the Returns Processing Fee expansion will apply to high return-rate products in all categories except apparel and shoes.
Now, let’s go into more detail about what these changes will look like and what sellers can do to avoid excess charges.
Fulfillment Center Transfer Fees
The first notable change is that Amazon will charge additional Fulfillment Center Transfer Fees, which could impact sellers who rely on centralized inventory. However, Amazon offers a silver lining – discounts on these fees are available for sellers who diversify their inventory across multiple warehouses.
This strategy aims to encourage more efficient distribution and logistics management, presenting both a challenge and an opportunity for sellers to rethink their inventory strategy. It will be financially beneficial for sellers to create a new strategy to spread inventory across multiple warehouses. And, this approach not only reduces transfer fees but may also potentially enhance shipping efficiency.
Introduction of Low Inventory Fees
In 2024, Too Much Inventory = Fees, and Not Enough Inventory = (you guessed it) More Fees. Amazon sellers will face the introduction of Low Inventory Fees. These fees are aimed at sellers who are not shipping enough units or who consistently maintain low FBA inventory levels.
This change emphasizes the importance of efficient inventory management, pushing sellers to analyze their sales patterns and stock levels more closely. Sellers must now ensure that their inventory levels are aligned with their sales volume and forecasted demand to avoid these new Amazon fees.
This shift in Amazon’s policy is a clear indicator of the platform’s focus on ensuring product availability and customer satisfaction (at the literal expense of sellers).
Sellers with sporadic or insufficient inventory levels will need to adopt more robust forecasting and replenishment strategies. Utilizing tools and analytics offered by Amazon, along with third-party inventory management solutions, can provide valuable insights and help maintain optimal inventory levels.
Regular audits of inventory performance, adjusting procurement plans, and being responsive to market trends will become crucial in avoiding these new Amazon seller fees and maintaining a healthy selling environment on Amazon. It’s essential to learn how to calculate your Amazon selling fees as well.
Long-Term Storage & Aged-Inventory Fees
On top of low inventory, Amazon’s updated Long Term Storage and Aged Inventory Fees will further impact how sellers manage their stock.
The Aged Inventory Surcharge for items stored between 271 to 365 days is set to increase, promoting more active inventory turnover. Additionally, the introduction of the Storage Utilization Surcharge, applying to those with a storage ratio above 22 weeks, emphasizes the need for better inventory optimization.
Sellers should review their storage practices and inventory health, aiming for efficiency to avoid these extra charges. Regular inventory audits and adjustments to storage plans will be key strategies in adapting to these changes.
Increased Amazon Return Fees
Amazon will increase Return Fees for products with high return rates, particularly impacting categories like apparel and shoes. This change is designed to address the operational costs associated with higher return volumes.
For sellers, this necessitates more focus on product quality and accurate descriptions to reduce return rates. Implementing quality control measures and regularly reviewing customer feedback to tailor your product descriptions and design details can be effective strategies to mitigate these increased fees and ultimately maintain customer satisfaction.
Updated Rates For Supply Chain By Amazon
Amazon is also updating its rates for Supply Chain services, a comprehensive set of solutions for moving products from manufacturers to customers globally. These updates include revisions on Amazon seller fees for Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution.
New discounts are being introduced for products auto-replenished by Amazon, aiming to streamline supply chain processes and reduce costs for sellers.
The updated rates for Amazon’s Supply Chain services in 2024 will impact sellers by altering the cost structure for logistics and distribution. Sellers will need to evaluate these new rates and adjust their pricing, inventory management, and logistics strategies accordingly.
Embracing the auto-replenishment discounts and optimizing the use of Amazon’s logistics services can help mitigate increased costs and maintain profitability. It’s crucial for sellers to stay informed about these changes and adapt their business plans to align with Amazon’s evolving logistics and supply chain landscape.
Reduced Amazon Seller Fees
There is some good news: Amazon will reduce referral fees for apparel items priced below $20, making it more cost-effective for sellers in this category. For items under $15, referral fees will decrease from 17% to 5%, and for those priced between $15 and $20, the fees will drop from 17% to 10%.
Additionally, Amazon Vine introduces a new, lower pricing structure, making the program more accessible for sellers seeking reviews and product visibility. These changes offer a financial advantage, especially for apparel sellers, and open new opportunities for leveraging the Vine program.
The 2024 Amazon seller fees and FBA fee changes present a complex landscape for Amazon sellers. However, with informed strategies and proactive management, these changes can be navigated successfully. By staying adaptable and leveraging Amazon’s resources, as well as taking a proactive approach to listings, sellers can continue to thrive in this evolving marketplace.