Posted by Alex Jackson on January 27, 2017
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 FBA fees.
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.