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Amazon revamps seller fulfillment fees for 2024

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Amazon is raising fees for most third-party sellers.

Amazon will change how it charges independent third-party sellers fees for using its hosted fulfillment network.

In an email to sellers it reposted in a corporate blog, the e-tail giant said it is breaking its seller shipping fees into charges for sending products into its Fulfillment by Amazon (FBA) fulfillment network (“inbound”) and shipping products out of its network (“outbound”). 

After these changes, Amazon expects that sellers will see an average increase of $0.15 in fees per unit sold, which the company says is “significantly less” than the increases announced by other logistics providers. Amazon also expects that there will be many sellers who will see a decrease in the average fees paid to Amazon per unit sold. 

According to Amazon, its fulfillment fees will continue to remain an average of 70% less expensive than two-day shipping methods offered by other major third-party logistics providers.

“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,” Dharmesh Mehta, VP, Worldwide Selling Partner Services, Amazon, said in the blog post.

As part of this fee restructuring, Amazon says it will focus on placing inventory closer to customers to improve the speed of third-party seller orders, driving more sales at lower transportation cost. 

Planned fee changes will include:

  • An inbound placement service fee for standard and large bulky-sized products to reflect its 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. Amazon will give sellers the option to pay reduced fees or no fee based upon whether they send their 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. 
  • On average, Amazon 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. 
  • In addition, to reflect the cost savings when products can be shipped in their existing packaging, Amazon 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 Feb. 5, 2024. 
  • A low-inventory-level fee for standard-sized products will apply if sellers carry consistently low levels of inventory relative to unit sales, as Amazon says this inhibits its ability to distribute products across its network. These fees will apply starting April 1, 2024. 
  • Amazon 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. 
  • Amazon will reduce referral fees for apparel products priced below $20. For items priced under $15, the e-tailer will decrease referral fees from 17% to 5%. For products priced between $15 and $20, it will decrease referral fees from 17% to 10%. Other referral fees will remain unchanged. These reduced fees will apply starting Jan. 15, 2024.
  • Amazon 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 for third-party sellers. 
  • Finally, Amazon 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. 

For a detailed summary of all fee changes, go to Amazon actively assists third-party retailers (primarily small-to-medium-sized businesses) to sell on its Amazon Marketplace e-commerce platform with at least 150 tools and services, and regularly adds new offerings.

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