Amazon is changing its fees…AGAIN?
- Amazon will lower longterm storage fees after hiking them up in September 2018.
- They will lower referral fees for certain categories, for products under a certain cost.
- New storage fees will come into effect on February 15th, 2019
- New referral fees will come into effect on February 19th, 2019
Yep, Amazon will be changing their FBA fees, AGAIN.
2019 has been off to a flying start with Amazon announcing that they will be updating their FBA fees, come February. The storage fee changes will take effect on February 15, 2019, and the fulfillment and referral fee changes will take effect February 19, 2019.
If you have been an Amazon seller for at least a year now, you’ll remember when Amazon decided to shake things up back in September, and increase their long-term storage fees. This created quite a stir in the Amazon community, with everyone panicking, running promotions to get rid of access stock and doing everything they could to avoid those extra $$ being charged to their account.
This time, however, the news of fee a change is actually a good one! Amazon claims that “over 40% of FBA units shipped to experience no change—or even a decrease”. Sounds good to us!
In mid-December, Amazon sent out an email to all sellers detailing the new fees and how they would work.
“Hello from Amazon,
As the year draws to a close, we want to thank you for your collaboration in better managing aged inventory, which has helped us improve efficiency across our fulfillment network. While the costs to fulfill, transport, and deliver orders increased this year, our continued investment in supply chain innovation allows us to limit the fee changes for 2019. Certain fulfillment fees will be increasing, while many storage and referral fees will go down. Our goal was to minimize the impact of these adjustments for as many of you as possible, and we expect over 40% of FBA units shipped to experience no change—or even a decrease.
Please review the fee change highlights, as well as each fee detail page linked below. The storage fee changes will take effect February 15, 2019, and the fulfillment and referral fee changes will take effect February 19, 2019. We are notifying you now so you can plan accordingly.
We will make no changes to fulfillment fees for small standard-size and large standard-size items with a shipping weight of 10 oz or less.
We will implement small increases in fulfillment fees for products in other size tiers to reflect fulfillment and transportation cost changes.
We will change the dimensional billing weight calculation for oversize items. We will apply a minimum width and height of 2 inches when calculating dimensional weight for oversize items, to align with packaging costs.
We will introduce separate fulfillment fees for dangerous goods that contain flammable or pressurized aerosol substances and items that contain lithium-ion batteries.
We will simplify the Subscribe & Save fee structure starting in September 2019. You will be able to fund a flat discount of 5% or 10% for each new item you add to the program.
We will eliminate long-term storage fees for units that have been in a fulfillment center for 181-365 days. The last long-term storage fee charge for inventory we store for 181-365 days will be January 15, 2019. We will continue to charge long-term storage fees for units in a fulfillment center for more than 365 days.
We will reduce the minimum long-term storage fee on units in a fulfillment center for more than 365 days from $0.50 per unit to $0.15 per unit. The last charge at $0.50 per unit will be January 15, 2019.
We will introduce a higher monthly storage fee for dangerous goods that contain flammable or pressurized aerosol substances. This change will first be reflected in April 2019 charges for storage that occurs in March 2019. We will not change the monthly inventory storage fees for other products.
We will reduce the referral fee percentage for Beauty, Health & Personal Care, and Baby products (excluding Baby Apparel) from 15% to 8% on items with a total sales price of $10 or less. We will continue to charge a fee of 15% on items with a total sales price above $10.
We will reduce the referral fee percentage for Grocery & Gourmet products from 15% to 8% on products with a total sales price of $15 or less. We will continue to charge a fee of 15% on products with a total sales price above $15.
We will reduce the per-item minimum fee across 30 categories from $1 to $0.30 per item, and from $2 to $0.30 per item for Jewelry and Watches.
We will reduce the referral fee percentage for Furniture items from 15% to 10% on any portion of the total sales price above $200. This does not apply to mattresses.
We will reduce the referral fee percentage for Jewelry items from 20% to 5% on any portion of the total sales price above $250.”
So, as you can see from above, these changes will benefit us sellers dramatically. High five!
Luckily, Amazon will not be making any changes to their Fulfilment fees, which at the moment are pretty darn good, when you consider everything that is included with that fee. The pick, pack and send services that come with the package is something many of us could not do without and could be the difference between us being able to sell on Amazon to not being able to sell on Amazon at all.
This ensures that Amazon is still an attractive business for potential sellers. The last thing they would want to do is put fees up and discourage people from signing up to using their FBA program. I’d be very surprised if you saw an increase in Fulfilment fees any time soon.
One of the small rises in fees will be if you sell and store and oversized product.
To understand the size of your product, this page will help you out.
They have also implemented changes to any dangerous goods or products that contain lithium batteries. This is a good thing, as it keeps those products separate. Potentially dangerous products are more expensive to ship and store, due to the potential dangers that go along with handling these products, so having their own fees, makes sense.
For a full detailed explanation of Fulfilment fees, go to this page.
First of all, its a great move on Amazon’s front. By lowering fees, they make it even more compelling for new sellers to sell on Amazon versus sellers fulfilling themselves vs third-party with the ever-rising cost of warehousing and transportation & logistics. Implementing this change at the beginning of the year, when a lot of new sellers will be signing up will only encourage MORE, growing our seller community!
When Amazon changed the long term selling fees in September, as I said before, it caused a bit of a stir. This ended up with sellers having to move their inventory around, liquidate it or some even had their stock sent to themselves as a way of damage limitation. Sellers weren’t happy, to say the least.
So now, Amazon will be eliminating long-term storage fees for units that have been in a fulfillment center for 181-365 days. This is great news!
This saves sellers a lot of fees since we can stock more units in Amazon compared to storing stock at another warehouse, eliminating some warehousing costs altogether. Conversely, sellers who have sent in too much stock to Amazon can save on the inventory removal fees as well.
So after all that panic back in September, you can stop stressing about your long term storage. Win.
For Amazon’s full detailed explanation on their Storage fees, click here.
Some categories are getting their referral fees lowered under a certain amount. This could be down to Amazon wanting to see more items below $15. Items under $15 fall into the “impulse buy” category, as they are not too expensive, so a buyer does not have to think too much before purchasing. Increasing the amount of impulse buy items on Amazon will only benefit them.
This is great news if you sell in the Beauty, Health & Personal Care, Baby products, Grocery & Gourmet products, Jewelry and Watches, Jewellery items and Furniture categories.
*Virtual high five if you are!*
So with Amazon reducing the referral fees on products that are $15 or less in the Beauty, Health & Personal Care and Baby products (both GREAT categories to sell within) it is definitely worth looking at products that you could sell for less than $15 to take advantage of that referral deduction. As I said above, this sticks with our “impulse buy” rule, so it sort of works out perfectly for us sellers.
For all referral explanations and definitions, click here.
What should we take away from this?
As Amazon explains in their opening paragraph in their email, it seems that they are constantly looking to make the FBA program more effective, efficient and the cheapest it possibly can be for us sellers, which is fantastic from a sellers point of view.
Not only do we know that Amazon are not taking us for a ride and taking as much money they can from the people who use its marketplace to sell, but that they are improving the whole process and that companies working within this process are improving too!
All in all? This fee change is great news for us sellers, not just because we get to save a few bucks by having our fees reduced a little, but it proves that with a powerhouse company, such as Amazon, continuously striving to better their services that things will only get better from here. And with that, selling on Amazon and with the FBA program will be ever more attracting new sellers and growing the Amazon marketplace and customer base.
So cheers Amazon. Happy new year!
For a FULL explanation and breakdown of Amazons fees, CLICK HERE.