VP Worldwide Selling Partner Services, Dharmesh Mehta, shared an overview of upcoming changes to Amazon US Referral and Fulfillment fees, separating fees inbound and outbound services to provide sellers with more transparency and control over their fulfillment costs.
This year we are breaking our fees into fees for sending products into our fulfillment network (“inbound”) and shipping products out of our network (“outbound”). This allows us to create incentives for sellers to use our network more efficiently so we can share the cost savings, including the ability to avoid inbound fees altogether and pay lower overall outbound fees.
We are excited to provide sellers with more transparency and more control over their fulfillment costs. On average, this year’s fee changes are significantly less than those announced by other major fulfillment services, and many sellers will see a decrease in the average fees paid to Amazon per unit sold.
We continue to work closely with our selling partners to give them the information they need to make more informed decisions and take more direct actions to further drive up unit growth and drive down costs, and we look forward to further supporting our selling partner community in 2024.
Amazon says they will be lowering outbound fees while creating new inbound fees that sellers can reduce or avoid entirely based on how they inbound products.
We will introduce an inbound placement service fee for standard and Large Bulky-sized products to reflect our cost of distributing inventory to fulfillment centers close to customers.
These fees will average $0.27 per unit for standard-sized products and $1.58 per unit for Large Bulky-sized products. We will give you the option to pay reduced fees or even no fee based upon whether you send your shipment to a single location or multiple locations.
These fees will be effective starting March 1, 2024, and the fees will be charged 45 days after products are received. Go to the Inbound placement service fee page for more details.
On average, we will decrease FBA fulfillment fee rates for standard-sized products by $0.20 per unit and for Large Bulky-sized products by $0.61 per unit.
These fees will apply starting April 15, 2024, the same date that the first inbound placement fees will begin to be charged. Products priced below $10 will continue to have an additional $0.77 discount on per-unit fees.
Go to the FBA fulfillment fee rates page for more details.
In addition, to reflect the cost savings when products can be shipped in their existing packaging, we will offer a fulfillment fee discount ranging from $0.04 to $1.32, depending on item size and weight, for eligible products in the Ships in Product Packaging (SIPP) program. These discounts will apply starting February 5, 2024.
Go to the Ships in Product Packaging (SIPP) program page for more details.
Amazon is also looking to incentivize keeping inventory levels up with fees for low inventory levels and reducing non-peak monthly storage fees for some standard-size products.
We will introduce a low-inventory-level fee for standard-sized products. The fee applies if you carry consistently low levels of inventory relative to unit sales, as this inhibits our ability to distribute products across our network, degrading delivery speeds and increasing our shipping costs.
Sellers can avoid this fee by maintaining more than four weeks of inventory relative to sales. These fees will apply starting April 1, 2024. Go to the Low-inventory-level fee page for more details.
To help enable you to carry sufficient levels of inventory, we will reduce the non-peak monthly storage fees for standard-size products by an average of $0.09 per cubic foot, from an average of $0.87 per cubic foot to $0.78 per cubic foot, from January through September.
Monthly storage fees for non-standard-sizes will remain unchanged. This change will apply starting April 1, 2024.
Go to the monthly storage fees page for more details.
Amazon is also expanding the following services or benefits:
We will reduce referral fees for apparel products priced below $20. For items priced under $15, we will decrease referral fees from 17% to 5%. For products priced between $15 and $20, we will decrease referral fees from 17% to 10%. Other referral fees will remain unchanged. These reduced fees will apply starting January 15, 2024.
We introduced a new, lower pricing structure for Amazon Vine. This program is designed to help brands get insightful reviews and help customers make informed buying decisions. The new fee tiers apply to products enrolled in the program on or after October 19, 2023. Go to the Amazon Vine page for more details.
We will expand benefits as part of the US FBA New Selection program. We will provide an average 10% rebate on sales of eligible new-to-FBA parent products, newly including these benefits for non-branded selection. In addition, we will provide expanded program eligibility for oversize selection and newly offer Vine benefits for eligible sellers and associated selection.
Changes will take place starting March 1, 2024. Go to the FBA New Selection page for more details.
We will introduce updated rates and new benefits for Supply Chain by Amazon, an automated set of supply chain services that provides an end-to-end solution to quickly and reliably move your products from manufacturers to customers around the world.
We are updating the fees for Amazon Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution. We will also provide new discounts for products that are auto-replenished by Amazon. Go to the Supply Chain by Amazon page for more details.
And finally, Amazon is expanding the returns processing fee to products in all categories excluding apparel and shoes to address operational costs of processing returns.
We will expand the returns processing fee to apply to high return-rate products in all categories, excluding apparel and shoes. This fee will address the operational costs of returns and reduce waste.
The returns processing fee will only apply to products that have the highest return rates relative to other products in their category and will apply starting June 1, 2024. Existing returns processing fees for apparel and shoes will remain unchanged on average.
Go to the Returns processing fee page for more details.
Despite Amazon's claims of transparency and cost controls, sellers themselves say no matter the spin, their fees will be going up and this announcement just makes everything more complicated.
How will these fulfillment and referral fee changes impact your Amazon business? let us know in the comments below!