2023 was a great year for Amazon, but 2024 could top it. This year’s revamped Amazon seller fee strategy shows a shift towards more cost-effective, CX boosting operations. But what brought about these fresh Amazon fee changes in 2024, and how will they affect merchants selling on Amazon this year?
Last year, Amazon set some ambitious goals. It tried to bring products closer to customers, speeding up Prime deliveries and streamlining fulfillment. But without take-up from third-party sellers, none of this is even remotely possible. Hence, a new wave of FBA fee changes.
As announced on the Seller Forums and explained on the 2024 US referral and FBA fee changes summary page, FBA seller fees on Amazon.com are going through a gradual adjustment. Some are already live, while others will take a few months to come into effect, as seen below.
1. FBA Fulfillment Fee A flat fee charged by Amazon for … More Changes in 2024
Amazon will apply more granular FBA size tiers for standard-sized (SS) items and replace the oversize (OS) tiers with Large Bulky and Extra-Large. So, there will be more size tiers overall, with smaller differences between FBA Fulfillment Fee rates. And most SS fees will be lower.
For SS items, fulfillment fees drop, ranging from $3.06 to $6.92 + $0.08 for anything over the first 3lb., in 4 oz. increments. The fee for Standard-sized Apparel will range from $3.27 to $6.92 + $0.16 for anything over the first 3lb., in half-pound increments.
But things look very different for items previously classed as oversized. For Large Bulky items, the fee goes down to $9.61 for the first lb. + $0.83 for every pound thereafter. So, Small Oversize items under 50 lbs can benefit from a lower fee of up to $2.12 per unit.
But Small Oversize items over 50lbs will now be classified as Extra-Large. As for Medium, Large, and Special Oversize, they all fall into the Extra Large category from Feb. 5. Note that only a fraction of these rates are really lower from Feb. 5 or Apr. 15.
It seems it’s mostly SS items that really stand to gain from these FBA fee changes. Since they tend to be cheaper, they may also benefit from the Low-Price FBA fee discount. Anything priced under $10 automatically gets a $0.77 discount on per-unit fulfillment fees.
But sellers can also avail of another discount. For eligible items enrolled in the new Ships in Product Packaging (SIPP) program, Amazon will offer a $0.04 to $1.32 discount on fulfillment fees from Feb. 5. This might mean changing your design for both flexible and rigid packaging, though.
While Amazon claims most sellers should expect an average cost rise of just $0.15/unit in 2024, this recalibrated fee structure will most likely eat into the profits of sellers with bulky items and deter them from selling on Amazon in 2024.
2. New Inbound Placement Fee
Amazon wants to be able to place inventory in more fulfillment centers, so that it’s closer to customers. But this calls for a toll: the Inbound Placement Service Fee. From Mar. 1, 2024, Amazon will charge FBA sellers an add-on fee of:
- $0.21 to $0.68 for sending standard-sized products to a single location (Premium Service), with discounts available for multiple locations and shipments (Discounted Service).
- $2.16 to $6 for sending Large Bulky Sized products to a single location (Premium Service), with discounts available as above.
Sellers will see their first charge on Apr. 15, 2024, unless they use AWD or they ship Large Bulky items through AGL. To find out more about your supply chain options, please read the official Supply Chain page.
3. Inventory Management Incentive
Amazon wants more of what sells and less of what doesn’t. So, starting Apr. 1, it’s taking a two-fold approach by dropping storage fees and penalizing sellers who don’t replenish on time. Monthly non-peak inventory storage fees for SS items will drop from $0.87/cf to $0.78/cf.
However, a low-inventory-level fee will apply, if they have high demand and consistently low inventory. These new Amazon inventory fees range from $0.32 to $1.1. Items enrolled in auto-replenishment with AWD may be eligible for a fee waiver.
4. Higher Processing Fees
FBA seller fees will start to add up for sellers with problematic products. For instance, for FBA removal and disposal, sellers will pay higher rates. They start at $1.04 per unit rather than $0.97. They go all the way up to $14.32 + $1.06/lb over the first 10lbs, which amounts to a $1.27 rise.
Liquidation charges will stay the same. Which is not to say they’re negligible. There is a 15% liquidation referral fee on the gross recovery value. On top of that, there’s a processing fee of $0.25 to $1.9 + $0.2 for every lb over the first 10 lbs.
FBA Prep fees will also change slightly for SS items. Bubble-wrapping will cost $1.04 per unit from Feb. 5, 2024, rather than $0.8. However, bagging, opaque bagging, and labeling will cost the same ($0.7, $1, and $0.55, respectively).
When it comes to Apparel and Shoes, a per-unit returns processing fee of $1.65 or above will be charged from Feb. 5, 2024. For all other categories, the fee is charged on units that go above the threshold from June 1, 2024. Rates start at $1.78 for SS items.
Return fees for Large Bulky and Extra-Large items in any category start at $6.74 and go up to $157.35 for the first 150 lbs + $0.19/lb from then on. Luckily, items with fewer than 25 units shipped per month are exempt.
But how will sellers know if they’re nearing the threshold? From May 1, 2024, sellers will be able to see monthly return rates and per-category thresholds on the FBA Returns dashboard.
5. Extra Benefits and Greater Eligibility
The new Amazon seller fee strategy features a series of perks and incentives for sellers who bring something new to the table. For instance, the FBA New Selection 10% rebate will also apply to eligible non-branded items (including oversized products), starting Mar. 1, 2024.
Items enrolled in this program will also benefit from:
If you sell apparel, don’t worry about being left out. From Jan. 15, 2024, referral fees will drop from 17% to 5% for any apparel priced under $15. For items in this category priced between $15 and $20, the referral fee will drop to 10% .
What’s more, Amazon VineA reviewer program available exclusively… More is no longer off limits to small sellers. If you have 1-2 units enrolled after Oct. 19, 2023, you won’t be charged anything for your Vine reviews. If you have 3-10 units enrolled, you’ll pay $75 per country, rather than the usual $200 enrollment fee.
6. Upcoming Fee Updates
Amazon mentioned more FBA fee changes will follow for inbound defects, aged inventory, and storage surcharge. The FBA Manual Processing fee is also earmarked. Currently set at $0.3/ $0.15 per unit for shipments with missing box information, this fee is already pretty hefty.
As the new Amazon seller fee strategy starts to take shape, it’s up to sellers to keep track of FBA fee changes and rethink their game plan to boost efficiency and slash costs. To find out what’s coming and how you can make the most of all these Amazon selling tips, perks, and incentives, simply follow our blog. We make selling on Amazon in 2024 easy!
Melanie takes an active interest in all things Amazon. She keeps an eye on the latest developments and keeps Amazon sellers up to speed.
