Amazon FBA Fee Changes

Fulfillment By Amazon (FBA) U.S. Fee Changes Coming February 22, 2018

It’s time to add an event to your calendar. This one has an easy-to-remember date (2/22 of this year) and an unfortunate (albeit a not-unreasonable and not-unexpected) change. On February 22, Amazon FBA fees change. Not only do fees change, the fee structure itself changes from a date-sensitive model offering small Q4 discounts to a year-round structure with no variations to accommodate the holidays. Here’s what you need to know about the 2018 Amazon FBA U.S. rate changes.

FBA Rate Changes: When and Why

Changes take effect on February 22, 2018. U.S. FBA rate changes are nothing new and Amazon rolls them out annually, adjusting fees “to reflect the changing costs of fulfillment, transportation, and customer service.” Full Amazon statement and details here.

Overarching Program Changes

  • The adjusted fees apply throughout the entire year. There will no longer be separate slightly discounted rates for October through December.
  • With the exceptions of small standard, large oversize, and special oversize items previously fulfilled by Amazon during January through September, most tier rates have increased by under $1 each. However, the small oversize category of items is hardest hit with a rate increase exceeding $1.25 per item.
  • The only changes in favor of sellers (i.e., prices becoming lower) are in the cases of certain large oversize and special oversize items previously shipped during January through September. So if you sell a lot of computer monitors through FBA, you’re sitting pretty with these changes.
  • Dimensional weight calculations have changed. Effective February 22, 2018, dimensional weight as the unit volume (length x width x height in inches) will be divided by 139 (instead of 166 as it has been previously). Dimensional weight is only applicable for oversize items and large standard items weighing more than 1 lb. Dimensional weight is also used to calculate fees for Multi-Channel Fulfillment and the Inventory Placement Service.

What’s Staying the Same (for Now)

  • Amazon FBA inventory storage fees are not changing at this time. Expect Amazon to announce changes to these fees in early 2018. Also, remember that long-term storage fees come twice a year and February 15 (when they next kick in) is right around the corner. It is definitely not too early to be reducing inventory and thinking about strategies to beat Amazon long-term storage fees.
  • The rates for the Multi-Channel Fulfillment program and the Inventory Placement Service are not changing at this time.
  • The additional fee of $0.40 per unit for FBA clothing items (regardless of size) remains the same.
  • FBA Small and Light program rates will not change at this time.

Table: Amazon FBA Rate Changes by the Numbers

Current January through September Current October through December On & After February 22, 2018

YEAR ROUND

Change
Standard Small (1 lb. or less)

Packaged item 12 oz. or less with longest side 15″ or less, shortest side 0.75″ or less, and median side 12″ or less

$2.41 $2.39 $2.41 +$0 to +$0.02 per item
Standard Large (1 lb. or less)

Packaged item 20 lb. or less with longest side 18″ or less, shortest side 8″ or less, and median side 14″ or less

$2.99 $2.88 $3.19 +$0.20 to +$0.31 per item
Standard Large (1 – 2 lbs.)

See above dimensions

$4.18 $3.96 $4.71 +$0.53 to +$0.75 per item
Standard Large (over 2 lbs.)

See above dimensions

$4.18 +$0.39/lb. above first 2 lb. $3.96 +$0.35/lb. above first 2 lb. $4.71 +$0.38/lb. above first 2 lb. +$0.53 to +$0.75 per item

-$0.01 to +$0.03 per lb. above 2 lbs.

Small Oversize

Packaged unit 70 lb. or less with longest side 60″ or less, median side 30″ or less, and longest side plus girth 130 inches or less

$6.85 +$0.39/lb. above first 2 lb. $6.69 +$0.35/lb. above first 2 lb. $8.13 +$0.38/lb. above first 2 lb. +$1.28 to +$1.44 per item

-$0.01 to +$0.03 per lb. above 2 lbs.

Medium Oversize

Packaged unit 150 lb. or less with longest side 108″ or less, and longest side plus girth 130″ or less

$9.20 +$0.39/lb. above first 2 lb. $8.73 +$0.35/lb. above first 2 lb. $9.44 +$0.38/lb. above first 2 lb. +$0.24 to +$0.71 per item

-$0.01 to +$0.03 per lb. above 2 lbs.

Large Oversize

Packaged unit 150 lb. or less with longest side 108″ or less, and longest side plus girth 165″ or less

$75.06 +$0.80/lb. above first 90 lb. $69.50 +$0.76/lb. above first 90 lb. $73.18 +$0.79/lb. above first 90 lb. -$1.88 to +$3.68 per item

-$0.01 to +$0.03 per lb. above 90 lbs.

Special Oversize

Packaged unit that exceeds one or more of the following: Over 150 lb. (dimensional weight or unit weight), over 108″ on longest side, or over 165″ when longest side is added to girth. Also includes products Amazon determines require special handling or delivery.

$138.08 +$0.92/lb. above first 90 lb. $131.44 +$0.88/lb. above first 90 lb. $137.32 +$0.91/lb. above first 90 lb. -$0.76 to +$5.88 per item

-$0.01 to +$0.03 per lb. above 90 lbs.

Final Thoughts

The obvious takeaway is that Amazon is factoring increases in FBA logistics cost, some of which will hit sellers of certain types of merchandise particularly hard. If you’re a high-volume seller moving a lot of large standard and/or small oversize items through Amazon FBA, you may need to reconsider your fulfillment options due to the dramatic per-item price increases. Honestly, Amazon FBA may no longer be your best option, which would require a pretty radical operational change if you’ve built your business around it as the solution. By the same token, if you move a lot of standard small items, you’re not going to be affected much.

Other than the obvious as stated above, I’m interested in what these changes indicate about where Amazon may be headed in terms of its own logistics changes or what it knows about the larger fulfillment process and costs of that business. When I look at the change chart above, I can’t help but ask, “What is happening in that large standard and small oversize FBA window where Amazon is betting on significant price increases far out of scale with other FBA package tiers? Is this a pick-and-pack thing? Is it a warehouse and sales-tax nexus thing? Could it have to do with the rumblings about Seller Flex and Amazon competing more intensely with UPS and USPS?” As with all things Amazon, only time will tell, but you can best believe that there’s plenty of method and behind-the-scenes knowledge driving these Amazon FBA rate changes and the pricing anomalies within.

Lena R. Liberman

Lena is the Ignite Marketing Specialist at Seller Labs. She has nearly 20 years of marketing and product experience, heavily concentrated in the fields of technology, publishing, education, and commerce. When not gathering information and writing about it, Lena can be found restoring vintage furniture or hiking with her dogs.

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