Every Amazon seller wishes to be successful on the platform. And that’s understandable since success on a marketplace as popular as Amazon.com translates into business growth, revenue, and much more.
However, striking the perfect balance between profit and cost is vital to ensure success, not just on Amazon but everywhere in the business world.
For sellers using FBA, this means understanding the nuanced FBA fee structure and factoring every little cost associated with using Amazon’s fulfillment service when calculating product prices.
Amazon also updates its FBA fees regularly. These updates are usually announced close to or after the start of a new year and are slated to come into effect throughout the year.
This year as well, Amazon has announced similar updates. These updates, however, are not just restricted to the fulfillment fees.
We share some of these updates below:
Amazon FBA: 2024 Updates
Amazon has updated its FBA fees this year seeking to strike a balance between meeting sellers' needs and ensuring its own operational efficiency.
Here are some of the important updates that might help you build a more appropriate budget for this year:
Size Tiers and Fee Changes
These changes are made to the size tiers and their respective fees. According to Amazon, small standard-size tiers will be measured at 2-ounce intervals. Large standard-size tiers from 1 to 20 lbs will be measured at 4-ounce intervals.
Besides that new large bulky and extra-large size tiers with new weight and dimensions will replace the regular small, medium, large, and special oversize tiers.
The greater of unit weight or dimensional weight will be used to calculate the fees for all units except for extra-large 150+ lb and small standard units. Unit weight will be used to calculate these fees.
These changes will go into effect starting 5th of February this year, and will not apply to Apparel products.
Changes To FBA Fulfillment Fees For Apparel And Non-Apparel
Amazon is introducing more granular rates for non-apparel standard-sized products and is bringing large bulky and extra-large size tiers. This change will come into effect from 5th February 2024.
Moreover, starting 15th April 2024 fulfillment fees will be reduced for standard-sized and large bulky-sized products.
Fees are calculated based on the greater of unit or dimensional weight for all size tiers except for small standard and extra-large (150+ lb) units.
For Apparel, Amazon is introducing large bulky and extra-large size tiers starting 5th February 2024. FBA fulfillment fees are also being reduced for standard-sized and large bulky-sized products. The new fees will come into effect starting 15th April.
Changes To FBA Fulfillment Fees For Dangerous Goods
Dangerous goods on Amazon go beyond explosives and weapons. Anything that is toxic or may contain inflammable materials or parts also falls under Amazon’s hazmat or hazardous materials category.
These materials may include lithium-battery-operated products, items with magnetized material, and even products with non-harmful chemicals like spray deodorants, hairsprays, hair dyes, glue, and adhesives.
Amazon has separate fulfillment fees for dangerous goods or hazmat. This may be because they may require special handling and storage.
We may come across more granular rate cards for standard-sized products and introduce large bulky and extra-large size tiers. This will come into effect on 5th February 2024.
Fulfillment fees will be reduced for standard-sized and large bulky-sized products. The reduced fees will apply starting April 15, 2024.
Discounts for Ships in Product Packaging (SIPP)
Ships in Product Packaging (SIPP) allows sellers to ship their products to the customers in their original packaging. These packages are not delivered in Amazon’s branded packaging.
All products enrolled in the SIPP program will have low FBA fulfillment fees associated with them.
Products smaller than 6x4x0.375 inches and classified as hazmat or extra-large are not eligible for the discounted rates.
Products that are priced under $10 will receive Low-Price FBA rates. These rates are $0.77 less than standard FBA rates. Sellers using low-price FBA will receive the same level of FBA service as given to other FBA merchants, i.e. free shipping for Prime customers and the same delivery speeds as standard FBA.
The low-inventory-level fee is the latest addition to Amazon's FBA fee structure and is under a lot of discussion.
Amazon will now impose a fee for standard-sized products with consistently low inventory. The level of low inventory will be subjective and relative to customer demand.
Low inventory relative to higher demand often results in higher shipping costs, says Amazon. This is the reason behind the introduction of the new fee.
The low-level-inventory fee will not be applied to new professional sellers for the first 365 days, new-to-FBA parent ASINs for the first 180 days, and products that are auto-replenished by Amazon.
FBA fees are calculated when the products leave the fulfillment centers. So if a product was ordered before the date new changes come into effect but is delivered after it, new charges will apply.
With these changes being made to FBA fees and more importantly Amazon imposing low-level-inventory charges on inventory that does not meet the existing customer demand requires that all sellers strengthen their grip on inventory forecasting to stay on top of their stock levels in FBA fulfillment centers.
You can find out the details of all of these updates in Amazon Seller Central here.