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Upcoming Fee Change

July 14, 2017 | Posted By Mike Indigaro
Upcoming Fee Change

Alert: Shipping Fee Change, Effective 7/19/2017

 

It’s Amazon’s world, we’re just living in it.

A new fee change, starting on July 19th, will give more control to Amazon over the actions of their third-party sellers.

Amazon is increasing how often sellers are asked to send items to multiple destinations and changing the fees associated with the Inventory Placement Service. If this is a service you use often, this new fee structure will greatly impact your business.

Prior to this change, all shipments were subject to the same per item fee for the Inventory Placement Service.

After July 19th, items will only be subject to fees if the Amazon’s recommended shipment destinations are not followed in the shipment plan. So, if Amazon asks you to send your items to three different warehouses and you choose to only send to one, you will be charged a per item fee. The fee structure is tiered so that the closer you follow the recommended destinations, the less you will pay per item.

This tiered approach prompts fee-avoiding sellers to follow Amazon’s wishes.

 

What does this mean for FBA sellers?

Like with any other change on Amazon, it’s important to fully understand how it will impact your business.

If you choose to follow Amazon’s wishes, you will likely have to ship to multiple destinations more often than you used to. Based on the destinations Amazon chooses for you, shipping costs from your carrier may increase. Multiple destinations may also add confusion for your suppliers if they ship directly to FBA for you.

If you do not choose to follow Amazon’s shipping plan recommendations, you will be charged the per item fee for the Inventory Placement Service. These fees may seem minor, but can add up quickly if you aren’t careful.

Here are two potential strategies to avoid a decrease in margins under the new fees:

  1. Increase prices accordingly. You can make up for the higher shipping fees by slightly raising your prices.
  2. Apply for Seller Fulfilled Prime (SFP). SFP allows you to fulfill your own orders under the Prime badge. SFP has strict requirements, making it only an option for high quality sellers.

 

Amazon’s fees (like these ones) impact your bottom-line profits, so make sure you’re fully aware of what’s going on!

 

Here’s the full breakdown of the fees:

Standard-size Inventory Placement Service Fees chart

Oversize Inventory Placement Service Fees chart

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