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  • Ridgeline Insights

What You Need to Know About the Complicated New Amazon Fee Changes

As we approach each new year, the speculation, questions, and concerns for Amazon sellers regarding fee changes to the e-commerce giant start to creep in. The recently rolled-out Amazon fee changes are some of the most complex we’ve seen yet.

Details are subject to change, but here is what we know now…

Standard-sized products to decrease by $0.20 per unit

Large Bulky-sized products to decrease by $0.61 per unit

When: These fees will apply starting April 15, 2024

Why: Well, unfortunately, these fulfillment fee decreases will likely be offset by inbound placement fees that we’ll review later in this blog

Fulfillment fee discount ranging from $0.04 to $1.32, depending on item dimensions, weight, and eligibility

When: Discounts will apply starting February 5, 2024

Why: Amazon's innovative initiative, the Ships in Product Packaging (SIPP) program, previously recognized as Ships in Own Container (SIOC), empowers FBA sellers to evaluate and approve their products for shipment in personalized, branded packaging. In this case, Amazon will not apply additional product packaging before shipping to the customer, and this will, in turn, reduce fulfillment fees and decrease total packaging use.

From January through September standard-size products storage will decrease by an average of $0.09 per cubic foot. Monthly storage fees for non-standard sizes will remain unchanged.

When: The change will apply starting April 1, 2024

Why: To enable sellers to carry sufficient levels of inventory

This will apply to products in an apparel category that are under $20. For items priced under $15, Amazon will decrease referral fees from 17% to 5%. For products priced between $15 and $20, referral fees will decrease from 17% to 10%

When: Starting January 15, 2024

Why: There is speculation that this decrease is to compete with other e-commerce sites selling low price apparel products

These fees will average $0.27 per unit for standard-sized products and $1.58 per unit for Large Bulky-sized products

When: March 1, 2024. Seller will be charged 45 days after being received at FBA

Why: To account for the cost of Amazon transferring inventory around to other fulfillment centers to get the product closer to the customer

More details here

This will apply to high return-rate products, other than those in the footwear and apparel categories 

When: June 1, 2024

Why: This fee will address Amazon's increased operational costs of processing returns

More details here

This one gets a bit tricky, and it's hard to say exactly how it will pencil out. Essentially, sellers will be charged for having consistently low levels of inventory at FBA. Sellers will want to carry more than four weeks of inventory relative to sales.

When: April 1, 2024

Why: Low inventory levels inhibit Amazon from being able to distribute inventory across their network and it results in slower than slower-than-ideal shipping times to the customer by Amazon’s standards.

Overall, Amazon says that they expect sellers to take on a ~$0.15 per unit increase in fees once all is said and done. Sellers will need to keep a close eye on their inventory to make sure to stay in sufficient stock and work to optimize their ship-to-Amazon processes.



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