The Definitive Guide to Amazon's Fee Changes
BREAKING NEWS: Starting January 17, 2023, Amazon is making updates to the U.S. referral and Fulfillment by Amazon (FBA) fees. And while the referral fees won’t change, sellers using Amazon’s FBA fulfillment service will see significant increases in the new year.
Featured Video: A Deep Dive into Amazon Fee Changes Coming in 2023
Jessica Wright, Amazon Brand Strategist on the Seller Labs Services team sheds more light on the upcoming FBA fee changes on LinkedIn:
To illustrate what updates are coming up, let’s take a look at the side-by-side fee comparison charts:
What Can Sellers Do to Stay Profitable?
Seller Labs unveils Amazon Fee Calculator designed to ease Amazon sellers’ headaches while adjusting prices and maintaining healthy profit margins.
You must have heard that Amazon has introduced higher FBA fees for the holiday shopping season (October 15 to January 14). Furthermore, it announced another fee increase in 2023. So what adjustments do you need to make to maintain your profitability while also paying higher fulfillment fees to Amazon? If that’s a question you can’t immediately answer (and even if you can), look at our newly-launched Fee Calculator!
Amazon’s Official Announcement:
Update to US Referral and FBA Fees Starting January 17, 2023
“As we near the end of the year, we would like to thank you for your continued partnership. We started 2022 expecting a return to normalcy as COVID-19 restrictions eased, but fuel prices and inflationary pressure presented further challenges, some COVID-19-related challenges persisted, and we have seen recessionary concerns arise in many places around the world. Despite these challenges, you have persevered and demonstrated tremendous agility, and together, we have served customers well.
We continue to invest heavily in people, technology, transportation, and infrastructure to innovate on behalf of our selling partners. We do this while also working to be more efficient and manage our costs to serve you and customers, so we can provide an amazing service that is also a great value. Today, we would like to share the updates we are making to our U.S. referral and Fulfillment by Amazon (FBA) fees that will take effect on January 17, 2023, except where otherwise noted.
1. Referral fees will remain unchanged. These fees provide sellers with traffic from hundreds of millions of customers, an attractive shopping experience for customers, payment processing, fraud prevention, and much more. We will remove the following fee categories: Collectible Coins, Entertainment Collectibles, Sports Collectibles, and Collectible Cards. Impacted ASINs will be re-categorized to their most suitable product category, which may result in different (some lower, some higher) fees for those re-categorized products. For more information, please visit: Fee Category definitions.
2. Earlier this year, we introduced a Fuel & Inflation Surcharge for our FBA fees for what we believed may only be temporary cost increases. These cost increases have not attenuated as quickly as we had hoped, so we will adjust our standard FBA fee rates to account for these increased costs and we will remove the separate Fuel & Inflation Surcharge at this time. These changes are reflected in the below summary.
3. This year, we saw some sellers use more of our storage than we expected or believe was needed to serve customers well, and that constrained how much product from other sellers could be sent into FBA. As a result, we will make updates and create additional granularity in our FBA fees that continue to better align fees with our underlying costs. This will drive improved inventory health, more efficient use of our storage, and create more capacity for sellers who are using space efficiently. For more information, please visit: 2023 U.S. Fulfillment by Amazon fee changes and 2023 Storage fee changes. This includes seven areas:
→ We will increase FBA outbound fee rates by $0.22, on average, which is below fee increases announced by other fulfillment and logistics providers. As part of this, we will introduce more granular weight tiers for FBA outbound fees (at the quarter and half pound level) to better align fees with shipping costs.
→ For Apparel products, we will use the greater of unit weight or dimensional weight to determine the shipping weight for all large standard-size products. This is similar to the change we made in 2022 whereby we extended dimensional weight to all large standard-size products below 12 ounces, except Apparel. This change will take effect on February 16, 2023.
→ We will reduce the returns processing fee rates for customer-returned products in the Apparel and Shoes categories by an average of $0.20 per return.
→ We will increase the monthly off-peak storage fee (January to September) for standard-size products by $0.04 per cubic foot and oversized products by $0.03 per cubic foot. We will increase Peak storage fees (October to December) for our non-sortable network by $0.20 per cubic foot, while those for our sortable network will remain unchanged.
→We will introduce a storage utilization surcharge for sellers who have a high cube of inventory stored in our fulfillment centers relative to the cube of their recent weekly sales. We estimate this will impact approximately 7.5% of sellers who use the highest volume of storage relative to their sales volume. This change will take effect on April 1, 2023.
→ We will increase the surcharges applied to inventory stored between 271-365 days. Additionally, we will introduce aged inventory surcharges on inventory stored between 180-270 days, excluding products in the following categories: Apparel, Shoes, Bags, Jewelry, and Watches. These changes will take effect for the April 15, 2023 aged inventory assessment date. We encourage you to check your aged inventory and take action on these products. These changes will help drive more efficient use of our storage and create more capacity for sellers who are using space efficiently.
→We will increase removal and disposal fees driven by increased costs of these services. Liquidation fees will remain unchanged. To learn how to configure your settings for automated liquidations or removals, go to remove inventory automatically.
4. We will lower fees for the U.S. FBA New Selection program. We will increase the rebate on sales for eligible new-to-FBA parent ASINs from 5% to 10% on average, increase the number of units eligible, and extend the time period of eligibility for certain benefits within the program. The rebate will still be applied for sellers who meet specific criteria. For more information, please visit: FBA New Selection.
5. We will reduce fees by expanding the Small and Light Program and increasing the item price for eligible products from $10-or-less to $12-or-less, enabling sellers to realize the program’s lower fees for more of their selection. For more information, please visit: 2023 FBA Small and Light fee changes.
These changes are designed to allow us to collectively better serve customers while ensuring that we continue to provide you with a great value relative to alternatives. On average, these fee changes are below those announced so far by other logistics providers. In addition, Amazon’s fulfillment fees will remain an average of 30% less expensive than standard-shipping methods offered by other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.
For a summary of all fee changes, please visit: amazon.com/selling-fee-changes.”
Source: Seller Central
Paul is the Senior Marketing Manager at Seller Labs. Results and data-driven, he’s spent his career navigating through multiple disciplines within Marketing, and lately focusing on his passion: Demand Generation and Marketing Operations. Paul has 10 years of experience leading global B2B marketing strategies. An avid foodie, in his spare time you’ll find Paul trying out a new restaurant or food truck.