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Amazon Fees 2024 Edition: What They Aren’t Telling You

Amazon fees keep rising. In early December 2023, Amazon announced its latest round of seller fees. By far, they are the most complex we have seen.

Instead of spending hours trying to dissect the changes, we’re breaking down everything you need to know about these fees. Learn the hidden truth about why the fee updates are so complex (Hint: Think Amazon Global Logistics) and unlock ways to save on rising costs. Buckle up; we’ve got a doozy of an article to help you decode all things Amazon fees 2024.

What are Amazon fees?

Amazon Fees 2024

Amazon sellers can choose various ways to sell on the platform, but the most popular is Amazon FBA or Fulfillment by Amazon.

With Fulfillment by Amazon, sellers pay specific fees to store and ship their inventory using Amazon fulfillment centers. On average, these fees (known as referral fees) range about 15% depending on account type, product size, and weight and come out of your revenue. When you open an Amazon selling account, you can choose between a free individual account or a professional account for $39.99 monthly.

A professional account is popular because the typical $0.99 per item fee levied with an individual account is waived. It’s a great option for those looking to scale an online business.

Amazon imposes various fees aside from referral and monthly subscription fees to sell on the marketplace. Here are a few things to know about Amazon fees:

  • Storage fees are calculated based on how long inventory is kept in fulfillment centers and how long inventory remains.
  • Fees are calculated per cubic foot.
  • Long-term storage fees apply to unsold items in Amazon warehouses past 180 days.
  • Amazon categorizes storage fees into monthly inventory storage fees and aged inventory surcharges.
  • Fees vary depending on product size, time of the year, and whether inventory is standard or oversized.

If you’ve come across an Amazon Facebook group or LinkedIn post, you’ve probably seen sellers going bonkers about the update in the comments, and rightfully so. The fee schedule release had sellers quite distressed.

The reason? The current fee update is complex. While specific fees are being lowered, there are several caveats sellers will need to self-manage.

Why are Amazon fees so high in 2024?

While Amazon may present the recent fee update as a means to decrease costs for themselves and sellers, the truth is murky. If not careful, the changes can severely impact your profit margins. It’s best to learn as much as possible about Amazon fee updates to mitigate unexpected costs and stay informed.

Amazon Fees 2024

The online heavyweight adapts its fee structure yearly to offset some of its operational expenditures due to increases in fuel and transport costs, inflation, and fulfillment needs. Unfortunately for Amazon sellers, these changes can feel like they fall on the backs of their hard-earned dollars.

Everything you need to know about Amazon fees 2024

The changes to Amazon fees will be rolled out throughout 2024. Amazon is anticipating that sellers will see an average increase of $0.15 in fees per unit sold. Yet, they also expect sellers to see a decrease in the average fees paid to Amazon.

Amazon Fees 2024

Let’s review some of the highlights from the fee update below.

Change #1: Inbound placement service fee

March 1st, 2024: One of the most significant changes in 2024. Expect new fees for standard and large bulky-sized products: $0.21 to $0.68 for standard size and $2.16 to $6.00 for large bulky-sized. Sellers can opt for reduced or waived fees by choosing single or multiple shipment locations. (More on this later.)

Change #2 FBA fee reductions:

April 15th, 2024: Increase of $0.20 per unit for standard-sized products and a decrease of $0.61 per unit for large bulky-sized products.

Change #3 SIPP (Ships In Product Packaging) program

Feb 5th, 2024: A fulfillment fee discount from $0.04 to $1.32 for eligible products in the SIPP program, where eligible items are delivered in the original manufacturer’s packaging without additional Amazon packaging to help encourage cost savings.

Change #4 New low-inventory-level fee

April 1st, 2024: A new few levied by Amazon for standard-size products to encourage ‘optimal’ inventory levels. The fee will apply to sellers carrying consistently low inventory levels relative to unit sales. Sellers can avoid this new few by maintaining over four weeks of inventory relative to sales. Be warned– carry excess inventory and additional fees will also be levied.

Change #5 Non-peak monthly storage fee reduction

April 1st, 2024: From January to September, Amazon will reduce non-peak monthly storage fees for standard-size products by approximately $0.09 per cubic foot (roughly $0.87 for standard-size items and $0.56 for oversized items) to help sellers carry optimal inventory levels. Monthly storage fees for non-standard sizes will remain the same.

Change #6 Return processing fee

June 1st, 2024: Amazon will apply a returns processing fee for high return-rate products (excluding apparel and shoes).

Here are other updates to consider:

  • The oversized category has been updated to the “Large Bulky Size” category with several new size tiers.
  • Placement fees do not apply to Amazon Global Logistics sellers
  • Significant fees ($0.89+) will apply for standard-size items consistently with less than 28 days of inventory.
  • 181 to 210 days aged inventory fees are $0.50 per cubic foot, calculated monthly until inventory is removed or sold.
  • Inventory that remains for 365 days is $6.90 per cubic foot or $0.15 per unit.
  • Jan 15th, 2024: Reduced referral fees for apparel products below $20 per unit. For products under $15, referral fees will decrease from 17% to 5%. For products priced between $15 and $20, referral fees will decrease from 17% to 10%.
  • New lowered pricing for Amazon Vine
  • Enhanced benefits for the New Selection program in the USA, where Amazon will provide a roughly 10% rebate on eligible sales for new-to-FBA parent products.

The truth about Amazon Global Logistics

Amazon Fees 2024

One of the caveats of the new fee schedule relies heavily on Amazon Global Logistics. Amazon Global Logistics “is a door-to-door ocean freight transportation program.” It’s part of a set of fully automated services called Supply Chain by Amazon. With Amazon Global Logistics, sellers can ship inventory directly from China to Amazon fulfillment centers with ‘so-called’ competitive rates.

The hidden truth is that this year’s fee increases are mainly due to the online giant promoting its Amazon Global Logistics service. Sellers are now forced to assign inventory to multiple fulfillment centers instead of one primary location as in years past. Amazon then charges sellers to store inventory in various warehouses, leaving them with few options but to weigh Amazon Global Logistics with a 3PL or their own freight forwarders.

The updated placement service fees for standard-sized items aren’t really a cost-saving measure when sellers are forced to either pay the new placement fees or AGL rates. Before jumping to AGL, you’ll need to do some serious number crunching comparing third-party logistics partners with the AGL service. Being prepared will be everything to the success of your logistics.

How to save on rising Amazon fees

The best way to mitigate fee changes and increases is to be armed with a strategy to reduce costs and ultimately save your bottom line. Here are a few ways you can do just that.

#1 Avoid irregularly shaped packaging

Create regular-shaped products that are smaller and lighter so you can leverage master cartons that can fit more. Master cartons can help you unlock better shipping rates to lower expenses.

#2 Vacuum sealing

Some products can be transported in different sizes or shapes. Vacuum sealing removes air from product packaging to temporarily shrink products during shipping. Consider this option to reduce fees.

#3 Value Incentives

Consider increasing your product offer so you can, in turn, increase your price. Strategic value incentives with price increases can help you mitigate increased fees by offering customers more bang for their buck.

#4 Double-check packaging measurements

If you don’t provide Amazon with correct measurements, guess what? They’ll measure for you and won’t always align with your initial results. Double and triple-check your measurements by running a free product report before sending inventory to Amazon fulfillment centers.

#5 Ensure product packaging is below the large bulky size category

Large, bulky-size products increase costs and can be difficult to ship to customers. Perform due diligence in product and packaging research and avoid this size tier altogether.

#6 Avoid dreaded refunds

On Amazon, refunds can cost you more in Amazon fees. To save, ensure your product meets safety requirements and Amazon’s code of conduct. Optimize your product listing for accurate product details with accurate images so customers do not need to request refunds. You’ll benefit from better product reviews (happy customers) and fewer refund fees.

#7 Enroll select ASINS in SIPP (Ships In Product Packaging)

If your product does not require unique packaging like a beauty product, for example, you can consider enrolling in the SIPP program. To help encourage cost savings, eligible items under SIPP receive a rebate for delivery in the original manufacturer’s packaging without additional Amazon packaging.

#8 Estimate fees in advance

Calculating Amazon fees helps you understand if a product is within your margins during the product research phase so you can avoid costly oversized fees or other unexpected costs. Try Amazon’s FBA Fee calculator to determine various fees for different products.

#9 Research 3PL options

You’ll have to perform some research to discover if third-party logistics providers are the cheaper option. It’s debatable, but worth the effort. Choose three to five 3PL providers and compare the estimated costs between the 3PL, both a 3PL and a hand-picked freight forwarder or Amazon Global Logistics. Ask specific questions about rates, inventory management, and drip feeding to unlock the best options.

#10 FBA Reimbursements

There can be inconsistencies with Amazon fees 2024, which should be no surprise. You are eligible for reimbursement under the FBA inventory reimbursement policy if inconsistencies occur. You can be reimbursed for lost or damaged inventory, overcharges, and more. Recouping Amazon fees 2023 can help put money back into your business when fees inevitably rise.

#11 Get help from experts

Understanding yearly fee updates isn’t easy, nor is it straightforward. That’s why employing our expert Amazon consultation services is to your advantage. Work with RBC experts to understand fee changes and troubleshoot the best solutions to meet your needs.

#12 Prevention is key (Know your Inventory Performance Index Score)

Reviewing your inventory performance dashboard can go a long way in alleviating Amazon fees. The dashboard provides restocking/excess inventory suggestions and insights and is a great way to stay informed before fees rack up.

Read between the lines

Understanding Amazon fees 2024 and logistics is paramount to your profitability on the platform, now more than ever.

Heed our warning: Get quotes from various third-party logistics providers and freight forwarders before jumping for joy about Amazon Global Logistics. It’s always great to have options, but research will be your best friend in determining the best choice for your business. Lean on tools like the Amazon FBA Fee Calculator to estimate your fees and seek expert advice before making rash decisions.

Yearly Amazon fee updates are to be expected and largely depend on the status of the global economy. You can’t avoid ‘em, but you can prepare.

Questions about Amazon’s recent fee changes? Of course, we are always here to help. Contact us anytime for help with Amazon disputes.

Amazon. Solved.

The information in this blog is based on Amazon’s fee structure as of January 2024 and may be subject to change without notice. Sellers are advised to check Amazon for official resources and statements for the latest and most accurate information regarding fees and policies.

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