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  • Ridgeline Insights

Navigating Amazon's New Fees: What Sellers Need to Know

As of April 1st, Amazon has implemented some changes to its fee structure, affecting sellers using its Fulfillment by Amazon (FBA) service. These adjustments aim to incentivize efficient inventory management while reducing fees for sellers, ultimately enhancing the overall selling experience on the platform. Let's delve into the specifics of these changes and how they might impact you as an Amazon seller.

One of the major updates introduced by Amazon is the Low Inventory Fee. Sellers will now be assessed based on their inventory levels, with charges ranging from $0.89 to $0.32 per unit. The fee is determined by a 30-day and 90-day score, with the seller being charged based on the higher score. This encourages sellers to maintain a healthy level of inventory, with at least 28 days' worth of stock to avoid incurring additional fees. Notably, Amazon won't penalize sellers for zero inventory or inbound inventory, providing some relief for those in transition.

Amazon has also revamped its Storage Utilization Surcharge, aiming to discourage excessive stockpiling of inventory. Sellers with more than 26 weeks of inventory will face charges ranging from $0.69 to $0.94 per cubic foot, depending on the duration of storage. However, there's a positive note amidst these changes: from Q1 to Q3, the storage rate is decreasing from $0.87 to $0.78 per cubic foot, offering some respite for sellers. This adjustment seeks to reward sellers who consistently send quality products to FBA and maintain optimal inventory levels.

In addition to the changes implemented on April 1st, Amazon is set to roll out reductions in the FBA Fulfillment Fee (excluding Apparel) on April 15th. This fee, covering the cost of picking, packing, and shipping goods, is being reduced to offset the impact of the inventory placement fee for sellers opting to ship to a limited number of warehouses. On average, sellers can expect a reduction of $0.20 per unit for standard-sized products and $0.61 per unit for bulky items, making FBA an even more attractive option for sellers.

Amazon's recent fee adjustments signal a concerted effort to streamline the seller experience on its platform. By incentivizing efficient inventory management and reducing fulfillment fees, Amazon aims to foster a marketplace where quality products thrive and sellers can better serve their customers. However, it's essential for sellers to stay informed about these changes and adapt their strategies accordingly. Whether you're considering FBA or Fulfillment by Merchant (FBM), understanding the nuances of each option is crucial for maximizing your success on Amazon. At Ridgeline, we're committed to assisting sellers in navigating these changes and optimizing their selling experience. Feel free to reach out to us for guidance on leveraging these fee adjustments to your advantage and achieving your selling goals on Amazon.



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