Amazon Announces Comprehensive Fee Changes for 2024: A Detailed Look for E-commerce Sellers
As 2023 comes to a close, Amazon has announced a series of significant changes to its US referral and Fulfillment by Amazon (FBA) fees, effective in 2024. This announcement on Amazon's Seller Central forum outlines a detailed plan to enhance service delivery while adjusting the cost structure. This article provides an in-depth look at these changes and their potential impact on e-commerce sellers.
Amazon's 2023 Milestones and 2024 Fee Adjustments
Amazon's update begins with a nod to the achievements of 2023, notably the delivery of over 1.8 billion product units at unprecedented speeds, largely thanks to independent sellers. As Amazon gears up for 2024, it plans to implement fee changes designed to maintain value and reduce collective costs. Sellers can expect an average increase of $0.15 in fees per unit sold, although some may see a decrease. Amazon emphasizes that its fulfillment fees will still be about 70% less expensive than similar two-day shipping options from other logistics providers.
Also Read: Why Do You Need An Automated Repricer On Amazon?
Also Read: Why Do You Need An Automated Repricer On Amazon?
New Fee Structures and Discounts
A significant shift in Amazon's approach involves separate charges for inbound and outbound activities. This change aims to lower outbound fees while introducing new inbound fees, which sellers can influence based on their product shipping methods. Amazon will introduce an inbound placement service fee for standard and large bulky products, averaging $0.27 and $1.58 per unit, respectively. Conversely, FBA fulfillment fee rates for these products will see a decrease.
Inventory Management and Storage Fee Adjustments
Amazon is introducing a low-inventory-level fee for standard-sized products to encourage sellers to maintain adequate inventory levels. This fee aligns with transportation costs driven by low inventory levels. Amazon will also reduce non-peak monthly storage fees for standard-size products to assist sellers.
Additional Services and Benefits
The announcement includes several new or expanded services and benefits:
- Reduced referral fees for apparel products priced below $20.
- A new pricing structure for Amazon Vine, aimed at helping brands get insightful reviews.
- Expanded benefits in the US FBA New Selection program, including a 10% rebate on sales of eligible new-to-FBA parent products.
- Updated rates and new benefits for the Supply Chain by Amazon, covering Amazon Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution.
- Annual updates to various other fees, including Storage Utilization Surcharge, Removal, Disposal, Aged Inventory, Prep, and Inbound Defect fees.
Also Read: Common Reasons For Amazon Seller Account Suspension or Deactivation
- A new pricing structure for Amazon Vine, aimed at helping brands get insightful reviews.
- Expanded benefits in the US FBA New Selection program, including a 10% rebate on sales of eligible new-to-FBA parent products.
- Updated rates and new benefits for the Supply Chain by Amazon, covering Amazon Global Logistics, Partnered Carrier Program, and Amazon Warehousing & Distribution.
- Annual updates to various other fees, including Storage Utilization Surcharge, Removal, Disposal, Aged Inventory, Prep, and Inbound Defect fees.
Also Read: Common Reasons For Amazon Seller Account Suspension or Deactivation
Impact on Sellers
These changes represent a significant shift in Amazon's fee structure, impacting sellers' management of their inventory and pricing strategies. Introducing inbound and outbound fees and low-inventory-level fees will require sellers to plan their inventory management to optimize costs carefully. Reducing specific fees and introducing new discounts and benefits provide opportunities for sellers to offset some of the increased costs.
Seller Reactions: Concerns and Frustrations
The announcement has been met with concern and frustration from the seller community. Key points of contention include:
1. Complexity and Feasibility: Sellers are voicing concerns over the complexity of the new fee structure. The low inventory fee is a significant burden, especially given factors outside sellers' control. The intricate nature of the new fees, including the detailed pricing chart and the division of weight measurements, is causing confusion and apprehension among sellers.
2. Impact on Business Operations: Many sellers feel the changes will complicate their business operations. Amazon could have opted for a more straightforward approach to fee increases. The reduction in storage fees is perceived as insufficient to offset the new low-inventory-level fee, which could be as high as $0.97 per unit sold.
3. Lack of Flexibility: Some sellers report challenges in availing themselves of the discount options on placement for their products, feeling forced to pay the new fees.
Amazon's 2024 fee changes are a mix of increased costs and reductions or discounts in some areas. These changes reflect Amazon's ongoing efforts to balance the needs of its vast network of sellers with the demands of a rapidly evolving e-commerce landscape. Sellers are advised to thoroughly review these changes and adjust their strategies accordingly to continue thriving on the Amazon platform in 2024 and beyond.
For more details, click here to read the official announcement by Amazon.
For more details, click here to read the official announcement by Amazon.
Disclaimer:
Amazon is the registered trademark of the e-commerce brand.
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ChannelMAX offers Amazon Repricer that runs on the latest AI Repricing algorithm to do Amazon Pricing Management or Amazon Repricing. Based on Amazon SP API, the repricing engine or repricer runs 24/7 and efficiently manages Amazon prices to maximize your BuyBox with profit optimization. Established in 2005, ChannelMAX has been integrated with Amazon technology since 2007, helping thousands of third-party sellers on various eCommerce platforms. Some of the eCommerce platforms, aka marketplaces, supported by ChannelMAX.NET, are Amazon, Walmart, eBay, and Shopify. Some of ChannelMAX key offerings include ChannelMAX Amazon Repricer, 2ndly, ChannelMAX Amazon FBA Audits and FBA Refunds management, an offering for managing Amazon FBA Refunds Reimbursement management for lost or damaged or misplaced inventory for which Amazon is responsible and for which sellers deserve appropriate credit reimbursement from Amazon. ChannelMAX Services offer Remote (aka Virtual) Full-Time eCommerce Assistant to help 3P sellers run their daytoday business.
Check ChannelMAX at Amazon Selling Partner Appstore, an application with a 5 star rating.
Amazon is the registered trademark of the e-commerce brand.
About ChannelMAX.NET:
ChannelMAX offers Amazon Repricer that runs on the latest AI Repricing algorithm to do Amazon Pricing Management or Amazon Repricing. Based on Amazon SP API, the repricing engine or repricer runs 24/7 and efficiently manages Amazon prices to maximize your BuyBox with profit optimization. Established in 2005, ChannelMAX has been integrated with Amazon technology since 2007, helping thousands of third-party sellers on various eCommerce platforms. Some of the eCommerce platforms, aka marketplaces, supported by ChannelMAX.NET, are Amazon, Walmart, eBay, and Shopify. Some of ChannelMAX key offerings include ChannelMAX Amazon Repricer, 2ndly, ChannelMAX Amazon FBA Audits and FBA Refunds management, an offering for managing Amazon FBA Refunds Reimbursement management for lost or damaged or misplaced inventory for which Amazon is responsible and for which sellers deserve appropriate credit reimbursement from Amazon. ChannelMAX Services offer Remote (aka Virtual) Full-Time eCommerce Assistant to help 3P sellers run their daytoday business.
Check ChannelMAX at Amazon Selling Partner Appstore, an application with a 5 star rating.