Essential 2024 Amazon FBA Fee Updates for Sellers

August 8, 2024
Essential 2024 Amazon FBA Fee Updates for Sellers
Reading Time: 6 minutes

As the e-commerce landscape continues to evolve, Amazon remains a powerhouse in catering to the dynamic needs of independent sellers through its Fulfillment by Amazon (FBA) service, which includes a nuanced understanding and management of Amazon FBA fees.

Anticipating the year 2024, Amazon has unveiled significant changes to its Amazon FBA fee structure, reflecting its ongoing commitment to enhancing services and empowering sellers.

In this guide, we delve into the transformative shifts, from a seismic change in the Amazon FBA fee structure to nuanced adjustments in fulfillment fees, aiming to provide sellers with a profound understanding of these updates and strategies to thrive in this ever-changing marketplace.

The Evolution of Amazon FBA Services

Amazon kicks off by underscoring its unwavering commitment to enhancing tools and services for independent sellers. Over the years, Amazon has been a trailblazer in the FBA Amazon service, relentlessly pursuing faster delivery speeds and reduced costs. This section serves as a chronicle of Amazon’s journey, showcasing its dedication to revolutionizing the fulfilment experience for both sellers and customers.

2024 Amazon FBA Fee Structure Transformation

A seismic shift is announced in the Amazon FBA fee structure, emphasizing discrete fees tailored to specific capabilities. Departing from the previous model, this transformation aims to align fees more closely with underlying costs. This section highlights the significance of these changes, explaining how they enhance transparency and empower sellers with unprecedented control over their fulfilment expenses.

Millions of sellers leverage Amazon FBA Program to streamline order fulfilment, but it’s essential to comprehend the costs associated with this service. Amazon FBA fees are subject to frequent changes, making it imperative for Amazon FBA sellers to stay updated.

Changes in FBA Small and Light Program

Amazon surprised sellers by discontinuing the US FBA Small and Light program in June 2023. Instead, starting August 29, 2023, products under $10 qualify for Low-Price FBA rates, significantly less than standard rates. This change aims to simplify and improve benefits for sellers of low-priced items, automatically applying reduced rates without the need for opt-ins.

The Low-Price FBA rates exempt eligible items from holiday peak fulfillment by Amazon fees. Although the program shares prep and packaging requirements with standard FBA, it does not extend to products in the Multi-Channel Fulfillment program.

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Inbound and Outbound Activities Focus

Starting March 1, 2024, Amazon will implement an inbound placement service fee for standard and Large Bulky-sized products, reflecting the cost of distributing inventory to nearby fulfilment centers. The fees, averaging $0.27 per unit for standard-sized items and $1.58 per unit for Large Bulky-sized items, offer sellers flexibility by providing reduced or waived fees based on shipment destinations. These fees will be charged 45 days after product receipt.

FBA Fulfilment Fee Rate Adjustment

Effective April 15, 2024, Amazon announces a decrease in Amazon FBA fulfilment fees for standard-sized and Large Bulky-sized products. Adding to the allure, products priced below $10 will continue benefiting from an additional discount. This segment meticulously breaks down these adjustments, illuminating how sellers can leverage these changes to fortify their competitive edge.

Key Takeaway:

Decoding the 2024 Amazon FBA fee changes is key for your selling strategy. Keep an eye on the new inbound placement service fees, especially if you deal with widely distributed goods. Adjustments to fulfillment fees may also impact your profit margins, so make sure you're ready to adapt and keep those profits flowing.


Referral Fee Discounts

Amazon has announced a reduction in referral fees specifically for apparel products priced below $20, effective from January 15, 2024. For items priced under $15, the referral fees will be reduced from 17% to 5%, while for products priced between $15 and $20, the referral fees will be lowered from 17% to 10%. 

It’s important to note that other referral fees for products outside this price range will remain unchanged. This adjustment aims to provide cost benefits for sellers in the apparel category, encouraging competitive pricing and facilitating a more favourable environment for both sellers and customers.

The Ships in Product Packaging (SIPP) Program

Commencing February 5, 2024, Amazon introduces a fulfilment fee discount, ranging from $0.04 to $1.32 based on item size and weight, for eligible products in the Ships in Product Packaging (SIPP) program. This discount aligns with cost savings for shipping products in their original packaging, providing sellers with an added incentive.

Key Takeaway:

Maximize your Amazon FBA profits by taking advantage of referral fee discounts and new programs like the SIPP. Discounts on apparel items under $20 can significantly boost your margins, while the SIPP program simplifies shipping and enhances customer experience with original product packaging.


Low-Inventory-Level Fee

Starting April 1, 2024, Amazon will implement a low-inventory-level fee for standard-sized products. This fee is incurred when sellers consistently maintain low inventory levels relative to unit sales, affecting distribution efficiency and leading to increased shipping costs.

Monthly Storage Fee Adjustments

To support sellers in maintaining adequate inventory, Amazon will decrease non-peak monthly storage fees for standard-size items by an average of $0.09 per cubic foot, lowering the cost from $0.87 to $0.78 per cubic foot from January to September. Monthly storage fees for non-standard sizes will remain unchanged. This adjustment becomes effective on April 1, 2024.

Key Takeaway:

Amazon's FBA storage fee changes are all about promoting efficient use of warehouse space. From January to September 2024, you might see lower fees for standard-size items during non-peak periods. Your new monthly costs will be calculated based on product size and how long it stays unsold in the warehouse.


Updates to Amazon Vine and FBA New Selection Program

Enhancing benefits within the US FBA New Selection program, Amazon introducing an average 10% rebate on sales for eligible new-to-FBA parent products, now extending to non-branded selection. Amazon also expanding program eligibility for oversize selection and introducing Amazon Vine Program for sellers benefits for eligible sellers and associated selection. These impactful changes are set to roll out on March 1, 2024.

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Supply Chain by Amazon Enhancements

Introducing revised rates and enhanced benefits for Supply Chain by Amazon, an automated suite of supply chain services offering a seamless end-to-end solution for global product movement. Updates cover fees for Amazon Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution. Additionally, new discounts are available for products automatically replenished by Amazon. For in-depth information, refer to the Supply Chain by Amazon page.

Returns Processing Fee Expansion

Amazon has announced an extension of the returns processing fee to encompass high return-rate products across all categories, with the exception of apparel and shoes. The introduction of this fee is aimed at mitigating operational costs associated with returns and promoting waste reduction.

Effective from June 1, 2024, the returns processing fee will be specific to products exhibiting the highest return rates relative to their counterparts within their respective categories. It’s worth noting that existing returns processing fees for apparel and shoes will remain unaffected on average.

FAQs in Relation to Amazon FBA

What is the main focus of Amazon’s FBA fee structure transformation in 2024?

Amazon is shifting towards discrete fees tailored to specific capabilities, aiming to align fees more closely with underlying costs. This transformation enhances transparency and gives sellers more control over their fulfilment expenses.

How do the inbound placement service fees work, and when will they be implemented?

Starting March 1, 2024, Amazon will introduce inbound placement service fees for standard and Large Bulky-sized products. These fees reflect the cost of distributing inventory to fulfilment centers and offer flexibility with reduced or waived fees based on shipment destinations.

What adjustments are made to the FBA fulfilment fees for standard-sized and Large Bulky-sized products?

Effective April 15, 2024, Amazon will decrease FBA fulfilment fees for standard-sized and Large Bulky-sized products. Additionally, products priced below $10 will enjoy an additional discount.

What are the Ships in Product Packaging (SIPP) program, and how does it benefit sellers?

Starting February 5, 2024, Amazon introduces a fulfilment fee discount ranging from $0.04 to $1.32 for eligible products in the SIPP program. This aligns with cost savings for shipping products in their original packaging.

How does the returns processing fee expansion impact sellers, and when will it be effective?

Amazon is extending the returns processing fee to high return-rate products, effective from June 1, 2024, across all categories except apparel and shoes. This fee is introduced to mitigate operational costs associated with returns and promote waste reduction.


Conclusion

As we approach 2024, the curtain rises on a new era in Amazon FBA Fee Changes. This guide, a compendium of insights, empowers sellers with a profound understanding of each facet of the changes.

By embracing these transformations, making informed decisions, and adapting strategies, sellers can not only optimize costs but thrive in the competitive Amazon marketplace.

In the ever-evolving world of e-commerce, as the curtain falls on 2023, sellers are beckoned to embark on a prosperous journey, leveraging the tools and services provided by Amazon to attain unprecedented success.

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