- Lena R. Liberman
- On February 12, 2018
- 2 Comments
- amazon fba fee changes, amazon fba fees
It may be the shortest month of this year, but February 2018 is packed with Amazon FBA fee changes and need-to-know info about rates. Take heed so that you don’t find yourself paying more or failing to make the most of opportunities available prior to impending changes. Let’s break it down in chronological order so you can act quickly to address each change.
Long-Term Storage Fees Assessed (LTSF) on February 15
Long-term storage fees kick in twice a year so that Amazon isn’t left paying to sit on deadwood product. It’s a reasonable charge and one that encourages sellers to move product more quickly and with a calendar strategy that goes beyond “Sell more around the holidays.”
Straight from Amazon comes “FBA’s twice-yearly inventory cleanup is scheduled for February 15, 2018. Units that have been in a US fulfillment center for 181 to 365 days as of February 15, 2018, will incur a long-term storage fee of $11.25 per cubic foot on that date. Units in a fulfillment center for more than 365 days will incur a fee of $22.50 per cubic foot. For more information, visit FBA long-term storage fees.”
Remember, long-term storage fees are in addition to regular monthly storage fees. Be shrewd about when you move product in and out of Amazon Fulfillment Centers, the sizes of the products you store there, and how you work your shipments from manufacturer to warehouse. With some careful planning, thoughtfully weighing the costs of keeping/moving product, and timing how and when you run sales and promotions, you can drastically reduce any hit you might take on LTSF costs.
With a few days to go before LTSFs are assessed, you can still put a dent in your inventory and costs. Check out Last-Minute Strategies to Beat Amazon Long-Term Storage Fees for ideas and inspiration as well as a better understanding of how not to feel the pinch come August 15 when LTSFs are again assessed.
The Biggie: February 22, 2018: FBA Fee Changes
We’ve covered this topic before as it is a pretty standard adjustment at this point. It’s a drag but expected, not unlike periodic changes to USPS rates (the most-recent taking effect on January 21, 2018, with new rates shown here). Simply put, we’ve come to expect Amazon FBA fee changes given changes to fulfillment technologies, fuel prices, freight costs, and general economic trends as well as Amazon-specific changes and ambitions.
Given sellers’ reliance on FBA, any and all changes to fulfillment costs or policies is of great importance. That said, I’ll refer you to Amazon’s official 2018 Fulfillment by Amazon U.S. Fee Changes article and the Seller Labs article, Fulfillment By Amazon (FBA) U.S. Fee Changes Coming February 22, 2018, the latter of which is both a breakdown of the changes and thoughts on the larger implications of such changes. With just under two weeks to go before FBA rate changes kick in, I urge you to read both articles so that you’re well versed in the math and the meaning. Don’t sleep on these changes and don’t get caught by surprise come February 22.
Category-Specific Fee Changes Commencing on February 22
In the middle of January, Amazon very quietly changed the fees associated with selling certain categories of merchandise. In this case, it was Jewelry and Apparel. Those changes included the following.
For this category, the news was good as it meant a fee reduction beginning on February 22, 2018, and lasting for one year. According to Amazon, “For a limited time, the Referral fee will be reduced for eligible Jewelry items. Sellers will pay 20% on the portion of the total sales price up to $250, and 5% for any portion of the total sales price greater than $250, with a minimum fee of $2.00 per item. This fee reduction will take effect on February 22, 2018 (midnight PST), and last until February 21, 2019 (11:59 PM PST). Starting on February 22, 2019 (midnight PST), the Referral fee will go back to 20% of the total sales price, with a minimum fee of $2.00.”
Apparel and Accessories
Part of the same announcement, these fee changes don’t roll out until April 15, 2018, when they will take effect and make Apparel the most-expensive category to sell on Amazon. I suspect that this has to do with 1) Amazon’s strong wholesale relationships with brands such as Levi’s, 2) its brick-and-mortar/stand-alone-dot-com partnerships with stores such as The Gap, and 3) its own private-label offerings and PL ambitions in the apparel field. So, what can 3P sellers of A&A expect come April 15, 2018 (midnight PST) when new fees take effect? According to Amazon:
- “The Referral fee will be increased for eligible products in Shoes, Handbags & Sunglasses. Sellers will pay 15% on items with a total sales price up to $75, and 18% on items with a total sales price greater than $75, with a minimum fee of $1.00 per item.”
- “The Referral fee will be increased for Clothing & Accessories items. Sellers will pay 17% of the total sales price, with a minimum fee of $1.00 per item.”
Final Take and Takeaway
All of this information should help you shape not only the rest of your February but your spring Q2 as well (especially if you sell jewelry or apparel and accessories). But don’t stop making changes to inventory and fulfillment strategies there. Try to expand your mindset from expecting (or worse, being surprised by) periodic rate changes to one of knowing that changes are coming and planning seasonally and historically based on Amazon’s cycles and communications. Make adjustments all year round as inventory and sales dictate and also based on Amazon news. The clues are all there and you can avoid the shocks that come with policy changes and fee hikes by staying informed about where Amazon is headed in terms of acquisitions and logistics. One great way to do that is by keeping up with Seller Labs’ In Case You Missed It, a weekly round-up of Amazon-related news. Give it a try and see if ICYMI can help you better anticipate changes and prepare for them.