It’s happening again Amazon
is tweaking FBA and it’s time to take a look and learn how this will affect
your bottom line. The new pricing will go into effect February 22nd and
the changes will cover fulfillment fees, monthly storage fees and seller
shipment requirements plus a few new bells and whistles.
1.Fulfillment changes – Fees are going up for
oversize and media categories and actually dropping for standard non media. Fourth
quarter rate reductions will now start in October instead of November. Another
important change is order handling, pick & pack and weight handling fees
are now consolidated into a single fee. Last zero fee fulfillment will be a
thing of the past those standard sized items selling for $300 or more will now
be charged the standard processing fees.
2.Storage Fees- Starting march 1st
storage fees will be increasing for standard size items from $.54 to $.64 per
cubic foot an increase of nearly 20% this will apply to quarters 1 thru 3 in Q4
the rate will increase as well but more modestly $2.25 to $2.35 a 5% increase,
oversized rates will remain unchanged. Amazon will offer additional incentives
in the month of October to decrease your storage space in the form of reduced
3.Seller shipment requirements- sellers are going
to be required to ship merchandise more frequently and to more locations than
previously. You will have the option to ship to fewer locations but Amazon will
be charging a premium for this.
4.Added bells and whistles- expanded same day
delivery, subscribe and save a feature that allows customers to sign up for
scheduled reorders. Better inventory control on seller central access to
European markets via FBA and additional carrier options will be added.
What is the takeaway from these changes?
For starters it’s pretty apparent that Amazon sees a bit more milk in this cash
cow after all it is a great service and few other companies could provide these
services for the prices that are charged. Perhaps Amazon
still feels that too many sellers are simply dumping inventory (particularly
media bye bye penny books!) with no realistic plan for moving it. Another
concern is the combined handling fee no big deal if your selling single units
but multiple items purchases will take a hit on margins previously the fee was
just assessed for the first item.
In short get serious about monitoring your
inventory and know and understand the cost to your bottom line of using FBA.