Breaking Down 2024 Amazon FBA Fee Changes and Updates
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Unveil the future of Amazon FBA Fees 2024! Dive into strategic Amazon FBA fee updates for sellers, balancing value and efficiency. In this detailed blog post, we’ll meticulously dissect these changes, shedding light on their potential impact on sellers, while also delving into the array of new services and benefits that Amazon is introducing.
Amazon FBA fee Updates
In 2024, Amazon is updating its fees to support sellers and streamline operations. Sellers may see a slight increase of $0.15 per item, significantly less than other companies. Interestingly, some sellers might end up paying even less overall. Amazon’s shipping fees remain much cheaper, staying 70% lower than others.
The focus is on smart inventory placement for faster order processing, boosting sales while cutting transportation costs. Now, there will be separate charges for bringing items in and sending them out. Outbound fees are going down, and new inbound fees offer flexibility, allowing sellers to reduce or avoid certain charges. It’s a move to make things work better for everyone involved. It’s a move to make things work better for everyone involved in the realm of 2024 Amazon FBA fees.
1. Inbound and Outbound Activities
Amazon is cognizant of the pivotal role that proximity plays in the customer fulfillment journey. In response, the e-commerce giant is introducing a nuanced fee structure that seeks to optimize inventory placement and reduce overall costs for sellers.
- FBA inventory and inbound services fees: Standard-sized and Large Bulky-sized products will incur fees averaging $0.27 and $1.58 per unit, respectively. Sellers can mitigate these fees by strategically choosing single or multiple destination shipments, ensuring a streamlined Amazon FBA Inbound process.
- FBA Fulfillment Fee Reduction: Amazon is set to decrease FBA fulfillment fees for standard and Large Bulky-sized products by $0.20 and $0.61 per unit, respectively, making Amazon’s fulfillment services even more competitively priced.
- Ships in Product Packaging (SIPP) Program: Sellers can enjoy Amazon FBA fee discounts ranging from $0.04 to $1.32 for eligible products, promoting eco-friendly shipping practices.
2. Inventory Management
Efficient inventory management is crucial for both sellers and Amazon’s fulfillment efficiency. The fee changes in this category aim to strike a balance between encouraging healthy stock levels and reducing storage costs.
- Low-Inventory-Level Fee: A novel fee structure, effective April 1, 2024, incentivizes sellers to maintain optimal inventory levels, ensuring prompt and cost-effective order fulfillment.
- Amazon FBA Monthly Storage Fees Reduction: Non-peak monthly storage fees for standard-size products will see an average reduction of $0.09 per cubic foot, from $0.87 to $0.78 per cubic foot, starting April 1, 2024.
Key Takeaway:
Strategic Inventory Management: Amazon is placing a significant emphasis on smart inventory placement to optimize order processing and reduce transportation costs. The introduction of nuanced fee structures for inbound and outbound activities encourages sellers to strategically choose shipment options, providing flexibility and cost-saving opportunities.
3. Amazon Referral Fee Reductions
In a bid to support sellers in the competitive world of e-commerce, Amazon is revising referral fees for apparel products, providing financial relief to sellers in the fashion category.
- Referral Fee Reductions: Apparel products priced below $20 will see referral fee reductions, with fees dropping from 17% to 5% for items under $15 and from 17% to 10% for products priced between $15 and $20.
4. Amazon Vine Program and FBA New Selection Program
Amazon is keen on fostering mutually beneficial relationships with sellers through the expansion of benefits in programs like Amazon Vine Program and the FBA New Selection program.
- Amazon Vine Program: A new, lower pricing structure enhances accessibility to insightful reviews, benefiting both brands and customers.
- FBA New Selection Program: An average 10% rebate on sales of eligible new-to-FBA parent products, expanded eligibility for oversize selection, and Vine benefits for eligible sellers, starting March 1, 2024.
5. Supply Chain by Amazon
Recognizing the importance of a seamless supply chain, Amazon is updating rates and introducing discounts for auto-replenished products within the Supply Chain by Amazon services.
- Updated Rates and New Benefits: Changes to fees for Amazon Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution, alongside new discounts for auto-replenished products.
Key Takeaway:
Enhanced Supply Chain Efficiency: The updates to the Supply Chain by Amazon services, including changes to fees and discounts for auto-replenished products, demonstrate Amazon's commitment to enhancing supply chain efficiency. Sellers can leverage these improvements to streamline their operations and improve order fulfillment.
6. Storage Utilization and Other Fees
In a bid to optimize storage space and streamline operations, Amazon is implementing changes to storage utilization surcharge, removal fees, and other associated costs.
- Storage Utilization Surcharge: Enhanced granularity and rates, effective April 1, 2024, with the surcharge applying to Professional sellers exceeding a storage utilization ratio above 22 weeks.
- Removal and Disposal Fees: Amazon has recently increased fees due to rising service costs, starting February 5, 2024. Sellers can review the updated Removal and Disposal fee details here.
- Aged Inventory Surcharge: An increase for inventory stored between 271-365 days, effective from February 15, 2024.
- Amazon FBA Prep Service Fees: Fee changes involve an increase in fees for FBA Label Service and opaque bagging service for envelopes, parcels, and standard-size units, effective February 5, 2024, while bagging, bubble wrap, and taping service fees remain unchanged.
7. Product Size Tiers and Inbound Defect Fees
To enhance accuracy in shipping and maintain efficiency, Amazon is introducing new size bands and inbound defect fees.
- New Size Bands: Introducing 2-oz intervals for the small standard size tier and 4-oz intervals for large standard over 1 lb, including the introduction of Large Bulky and Extra-Large size tiers.
- Inbound Defect Fees: Effective March 1, 2024, addressing additional costs for misdirected shipments, late arrivals, and multiple destination discrepancies.
8. FBA Returns Processing Fee
Amazon is aligning its fee structure with sustainability goals by expanding the returns processing fee to high return-rate products.
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- FBA Returns Processing Fee Expansion: Starting June 1, 2024, the fee will apply to products with the highest return rates, excluding apparel and shoes, to address operational costs and reduce waste.
9. US Multi-Channel Fulfillment Fees
Starting February 5, 2024, there will be adjustments to US Multi-Channel Fulfillment (MCF) fees and size tiers. On average, MCF fees will see a 3.5% increase across all delivery speed options, staying below the 5.9% average increase from other carriers.
For units weighing less than 1 lb, MCF fees will remain the same or slightly decrease for standard speeds. Additionally, we are introducing a new smaller size tier of 4 oz and replacing the current Oversize tiers with Large Bulky and Extra-Large size tiers.
10. Amazon’s Fee Changes and Benefits for Canadian Sellers
In preparation for 2024, Amazon expresses gratitude for the partnership and achievements in delivering a vast product selection to Canada Prime members swiftly. Aiming to enhance service and reduce collective costs, fee changes are set for February 5, 2024. These include the introduction of Low-Price FBA fees, offering discounts for products under $11 CAD, and fulfilment fee discounts for items in the Ships in Product Packaging program.
FBA fulfilment fees will see an average increase of $0.20 CAD per unit. A returns processing fee for Clothing & Accessories and Footwear starts on June 1, 2024. New fees for low inventory levels and aged inventory storage beyond 365 days are also introduced. Additional services and benefits include a revised Amazon Vine pricing structure and expanded benefits in the Canada FBA New Selection program.
Key Takeaway:
Impact on Canadian Sellers: The fee changes specifically tailored for Canadian sellers, including the introduction of Low-Price FBA fees and fulfillment fee discounts, aim to enhance service and reduce collective costs. Sellers in Canada can explore these changes to optimize their operations and benefit from the new fee structures.
11. Amazon Warehousing and Distribution (AWD) Fee Updates
Commencing March 1, 2024, Amazon Warehousing and Distribution (AWD) will implement two-tier charges: Base Rate for those using their transportation/carrier and Integrated Rate for those utilizing Amazon Global Logistics or Partnered Carrier Program. The rates encompass AWD storage, processing, and transportation fees, each with corresponding discounts off the base rate. Revised fees will be effective for March 2024 storage and replenishment orders confirmed on or after March 1, 2024.
Integrated rates eligibility is based on recent shipments with Amazon Global Logistics or Partner Carrier Program. Multi-Channel Distribution replenishment orders have specific processing and transportation fees. Users of AWD’s automated replenishment feature receive waivers on selected FBA surcharges, including low inventory-level fee, storage utilization surcharge, inventory storage overage fee, and FBA inbound placement service fee for all AWD shipments.
12. North America Remote Fulfillment Fee Changes
Commencing on February 5, 2024, Amazon will implement new fees for North America Remote Fulfillment, covering cross-border fulfillment to Canada, Mexico, and Brazil. These fees replace standard fulfillment fees in these regions, while regular US fulfillment fees apply to sales within the United States. The fees, based on the buyer’s order shipment time, are structured per unit and determined by the product’s size tier and shipping weight.
The 2023 non-peak fulfillment fee applies from January 15, 2024, to February 4, 2024, with new fees taking effect on February 5, 2024. Each region (Canada, Mexico, Brazil) has distinct fee structures and size tiers. Additionally, dimensional weight, product volume, and dimensions are considered for determining shipping weight. The fees are dependent on the shipping weight, size tier, and fulfillment fee per unit in the respective local currency (CAD, MXN, BRL) based on the 2024 fee structure.
2024 Amazon FBA fee changes
| Category | Fee Change | Effective Date | Fee Change Trend |
|---|---|---|---|
| Amazon Vine Program | New lower pricing structure enhancing accessibility | October 19, 2023 | ↓ |
| Referral Fee Reductions | Below $15: 17% to 5%, $15 to $20: 17% to 10% | January 15, 2024 | ↓ |
| Ships in Product Packaging (SIPP) | Fulfillment fee discounts ranging from $0.04 to $1.32 | February 5, 2024 | ↓ |
| Removal and Disposal Fees | Increased fees due to rising service costs | February 5, 2024 | ↑ |
| Prep Service Fees | Increase in fees for FBA Label Service and opaque bagging service for envelopes, parcels, and standard-size units | February 5, 2024 | ↑ |
| US Multi-Channel Fulfillment Fees | Adjustments to US Multi-Channel Fulfillment (MCF) fees and size tiers | February 5, 2024 | ↑ |
| Fee Changes for Canadian Sellers | Fee changes in Low-Price FBA fees, fulfillment fee discounts, returns processing fee | February 5, 2024 | ↑ |
| North America Remote Fulfillment Fee | Revised fulfillment fee structures and rates for different size tiers and shipping weights in Canada, Mexico, and Brazil. | February 5, 2024 | N/A |
| Aged Inventory Surcharge | Increase for inventory stored between 271-365 days | February 15, 2024 | ↑ |
| Inbound Placement Service Fees | Standard-sized: $0.27 per unit, Large Bulky-sized: $1.58 per unit | March 1, 2024 | ↑ |
| FBA New Selection Program | 10% rebate, expanded eligibility, and Vine benefits | March 1, 2024 | ↑ |
| Inbound Defect Fees | Additional costs for misdirected shipments, late arrivals, and multiple destination discrepancies | March 1, 2024 | ↑ |
| Amazon Warehousing and Distribution Fee | Fees were decreased, with the base rate and integrated rate charges being reduced for AWD storage, processing, and transportation fees, along with a percentage discount off the base rate. | March 1, 2024 | ↓ |
| Monthly Storage Fee Reduction | Average reduction of $0.09 per cubic foot for standard-size products | April 1, 2024 | ↓ |
| Low-Inventory-Level Fee | Incentivizing optimal inventory levels | April 1, 2024 | ↓ |
| Storage Utilization Surcharge | Enhanced granularity, applied to Professional sellers exceeding 22 weeks | April 1, 2024 | ↑ |
| FBA Fulfillment Fee Reduction | Standard-sized: -$0.20 per unit, Large Bulky-sized: -$0.61 per unit | April 15, 2024 | ↓ |
| Returns Processing Fee | Applied to high return-rate products (excluding apparel and shoes) | June 1, 2024 | ↑ |
| Supply Chain by Amazon | Changes to fees and discounts for auto-replenished products | To be announced | N/A |
Why is Amazon Implementing These Changes FBA fees in 2024?
2024 Amazon FBA fee changes claim to enhance efficiency, but sellers might find themselves grappling with increased costs. While some fees decrease, others rise, squeezing sellers’ profits. These adjustments, cleverly presented as efficiency measures, ultimately reflect Amazon’s relentless pursuit of profit. Sellers face challenges in maintaining their margins, highlighting the need for fair competition, potentially through legal actions. Stay vigilant for further updates in this ever-changing e-commerce landscape.
FAQs In relation to 2024 Amazon FBA Fee Changes
1.What are the key updates in Amazon FBA fees for 2024?
Amazon is introducing nuanced fee structures, fee reductions, and new programs to optimize inventory management, enhance supply chain efficiency, and reduce costs for sellers.
2. How will the changes impact sellers’ storage costs?
Sellers can expect a reduction in monthly storage fees for standard-size products, encouraging efficient inventory levels and prompt order fulfillment.
3.Are there any fee reductions for referral fees in 2024?
Yes, Amazon is providing referral fee reductions for apparel products priced below $20, offering financial relief to sellers in the fashion category.
4.What is the rationale behind the introduction of the Low-Inventory-Level Fee?
The new fee structure, effective April 1, 2024, incentivizes sellers to maintain optimal inventory levels, ensuring timely and cost-effective order fulfillment.
5.How does Amazon plan to support Canadian sellers with fee changes?
Fee changes for Canadian sellers include the introduction of Low-Price FBA fees, fulfillment fee discounts, and additional benefits, aiming to enhance service and reduce collective costs.
Conclusion
As the e-commerce landscape evolves, so do the strategies employed by Amazon to maintain its status as a leader in the industry. Sellers navigating these 2024 Amazon FBA fee changes should view them as opportunities to optimize their operations, reduce costs, and enhance the overall customer experience.
