Amazon introduced significant changes to its fee policy at the beginning of 2024. These adjustments may be challenging for sellers to keep track of. As Amazon fees continue to eat away parts of seller’s profits, having a better understanding of the fees they are charged when selling their products is crucial to maximizing sales.

New Fees

The new fees are focused on how they partner to inbound and place inventory across the network. Placing inventory close to customers improves the speed of those orders, driving more sales at lower transportation costs. According to Amazon, the company will begin charging separately for inbound and outbound activities to enable more efficient network use.

Inbound placement service fee

Amazon wants to incentivize sellers to consolidate their inventory into fewer locations, potentially streamlining their fulfillment process. The new inbound placement service fee is set to reflect the 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. 

Low inventory-level fee

This new fee is charged for standard-sized products with low inventory levels compared to their sales 90 sales velocity. However, you can avoid this fee by maintaining at least four weeks worth of inventory based on your sales velocity. Amazon wants to incentivize sellers to keep healthy inventory levels. To achieve this, Amazon reduced Non-Peak Storage Fees by $0.09 per cubic foot, from $0.87 to $0.78.

By maintaining sufficient inventory, you can avoid the low-inventory-level fee, benefit from lower storage costs during non-peak months and improve your product’s delivery speed and customer satisfaction.

Service modifications

Amazon made several changes to some of its services and policies to complement the new fees. Here are the most important ones.

Automatic closure policy

The recent update to the Automatic Closure Policy for FBA Shipments aims to enhance the reliability of shipment arrivals for the FBA process. This policy applies to FBA shipments that don’t reach Amazon fulfillment centers within a specific timeframe. Late shipments will be automatically closed, potentially impacting your ability to manage them within Seller Central.

Timeframes:

• Domestic Shipments (US origin): 45 days after shipment creation.
• International Shipments (non-US origin): 75 days after shipment creation.
• Multiple-destination Shipments: Must arrive within 30 days of the first shipment’s arrival in the plan.

Referral Fee

The referral fee is a percentage of the product’s price that Amazon collects from the seller upon a sale. In the latest update, Amazon reduced referral fees for apparel products in specific price brackets. For items under $15, the referral fee dropped from 17% to 5%.

For items between $15 and $20, the referral fee was lowered from 17% to 10%.

For the rest of the categories, the referral fee remains unchanged.

FBA Fulfillment Fee

The FBA fulfillment fee is the cost sellers pay to Amazon to store and deliver their products when they use their Fulfillment by Amazon (FBA) service. The fee is not a flat rate, as the size and weight of your product determine it. Two main factors affect the cost: Product Weight and Dimensional Weight. Amazon uses the larger of the two weights to determine the fulfillment fee.

The latest update reduces fulfillment fees for standard-sized products with an average decrease of $0.20 per unit and large bulky-sized products with an average reduction of $0.61 per unit.

Fee Category List 

Amazon utilizes fee categories to calculate the rate for every item sold on its marketplace. The selection of each fee category is influenced by different factors, including the primary category of the product as well as size, weight, and brand. 

After identifying your product’s correct fee category, you can refer to the Selling on Amazon Fee Schedule to determine the associated fee rate. It’s crucial to check this page regularly for added product examples and to stay updated.

Remember, if a product is listed in multiple categories, its fee category is singular and might not always match the apparent retail category on Amazon. You can see the full list here. 

Tips for Choosing the Right Fee Category

Here are some helpful tips to consider;

• It’s important to be specific when choosing the product category.
• If your product falls into fee categories, choose the one that best represents its use.
• Contact Amazon Seller Support for guidance on selecting the right fee category.

Understanding and following the updated fee category guidelines will help you maximize your profits and remain competitive in the marketplace. You’ll be able to ensure charges when selling products on Amazon. 

There are also other points to keep in mind;

• The referral fee amount varies depending on the product category, and it’s calculated based on a product’s sales price, shipping, and handling charges.
• Amazon reserves the right to modify fee category guidelines at any time, so it’s essential to review them in order to ensure accurate fees are applied.

Final thoughts

Staying informed about Amazon’s fee updates and policy changes is essential for sellers to remain competitive in the marketplace.   Utilize the resources provided throughout this article, such as the Amazon Seller Central fee schedule and the automatic closure policy details, to ensure your products are charged with the correct fees. 

Keeping track of Amazon’s policies can be a big challenge. Don’t let Amazon fee changes eat into your profits! Contact the BellaVix Team to maximize margins and boost your visibility. 

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