Amazon New Fees for 2024: Guide to the Latest Pricing Changes

Amazon has rolled out some new fees in 2024 that could change the way you do business as a seller. It's important to get a handle on these fees to keep your prices competitive and your profits healthy. Expect to see updates on how much you pay for fulfilling orders across borders and some changes in fees for Fulfillment by Amazon (FBA) that could work in your favor.

Amazon is tweaking things like the Oversized category and introducing an inbound placement service fee, all in an effort to improve their service.

It's key to stay on top of these changes to manage your Amazon business well. Want to know more about these new fees and how to keep your store successful? Read on for all the details you need.

Overview of Amazon Fee Changes for 2024

In 2024, you will encounter a series of fee changes on the Amazon platform that will affect your selling strategies.

These adjustments across various fee segments are designed to keep pace with the evolving eCommerce landscape and optimize the fulfillment process.

This table breaks down key fee changes:

Significance of New Fee Structures for Sellers

The realignment of Amazon's fee structures in 2024 is a critical update that seeks to balance the scales between the service benefits provided by Amazon and the costs of using the platform.

For every item sold, Amazon sellers can expect an average increase of $0.15 per unit.

Although there is a hike in fees, Amazon assures that their rates are still considerably lower compared to other logistical options. They aim to remain competitive in the market while upgrading their fulfillment and distribution infrastructures.

Key Highlights of 2024 Fee Adjustments

Referral Fee Changes: As of January 15, 2024, you will see a decrease in referral fees for apparel items priced below $20, with fees as low as 5% for items under $15 and 10% for items between $15 and $20. Other categories remain largely unaffected.

FBA Fee Adjustments: Beginning February 5, 2024, new rates for standard-sized and oversized products will be implemented. Come April 15, 2024, additional FBA fulfillment fee changes are slated, which you should factor into your pricing strategies.

Small Standard Size Tier (February 5, 2024 to April 14, 2024)

Detailed Breakdown of FBA Fee Changes

Amazon's 2024 FBA fee changes present a mix of fee increases and adjustments. Understanding these changes is important to manage your costs effectively as an Amazon seller.

Increased Fees for Storage Utilization

Amazon has introduced an increase in storage fees to encourage better storage utilization among sellers.

You'll encounter a storage utilization surcharge, which aims to optimize warehouse space by charging more for inventory that occupies fulfillment center space for an extended period.

• Long-Term Storage Fees: Increased to reflect the higher cost of maintaining stock in Amazon’s fulfillment centers over time.

Changes to Fulfillment Fees

Fulfillment fees have been revised, with a slight increase per item shipped. The new fulfillment fee rates are designed to compensate for the overall enhancements in Amazon’s fulfillment network.

• Small Standard-Size Item Fees: Incremented by $0.15 per unit.

• Large Standard-Size Items: Rates have varied based on dimensions and weight.

Adjustments to Referral Fees

Amazon has also adjusted referral fees, although specifics can vary widely across different product categories. As a seller, review the updated fee structure to see how your products are affected.

• Variable Closing Fees: This may apply to media categories.

Inbound and Outbound Fee Modifications

Inbound fees now include a placement service fee, relevant to the logistics of shipping goods to Amazon's fulfillment centers.

On the other hand, outbound fees have also seen changes.

• Inbound Placement Service Fee: Ranges from $0.21 to $6.00 per unit.

• Outbound Fees: Additional costs for picking, packing, and shipping, which are now recalibrated to reflect the service enhancements.

Impact of Fee Changes on Inventory Management

In response to Amazon's 2024 fee adjustments, your strategy for inventory management will need to cope with additional costs associated with inventory levels and aging stock, influencing both your turnover rates and bottom line.

Low-Inventory-Level Fee and Its Effects

Amazon has introduced a low-inventory-level fee to encourage you to maintain a minimum inventory level.

This means that if your average inventory dips below 28 days' worth of supply, you will incur an extra fulfillment fee upon each item's shipment.

This fee is distinct from storage charges and aims to optimize the balance between too much and too little stock.

To avoid this fee and potentially reduce your costs, it's critical to employ precise inventory forecasting and replenishment practices.

• Impact:

  • Maintaining at least 28 days of inventory is essential.

  • Additional fees are incurred upon shipping when inventory levels are low.

Handling of Aged Inventory Surcharge

Amazon is now enforcing an aged inventory surcharge to prompt you to address slow-moving stock that clutters its fulfillment centers.

Items that linger beyond a certain threshold will be subject to this surcharge.

It is important for you to review your inventory aging reports regularly and either sell off aging items at a discounted rate, return them to your location, or dispose of them to evade the surcharge.

Effectively managing the lifecycle of your products is more relevant than ever to escape the implications of this new fee.

• Strategies:

  • Timely clearance of aged inventory to avoid surcharges.

  • An ongoing review of inventory to preemptively address aging stock.

Inventory Turnover and Fee Structure

A critical metric impacted by the 2024 Amazon fee changes is inventory turnover, which is a measure of how many times inventory is sold or used over a particular period.

A healthy turnover indicates efficient inventory management and can help negate the impact of these new fees.

You should aim to balance your stock levels to match sales rates and avoid both overstocking and stockouts.

Doing this well involves robust analysis of past sales data and projections for future demand.

• Key Considerations:

  • Align inventory supply with anticipated demand to maintain a healthy turnover.

  • Monitor sales trends and adjust inventory levels accordingly to optimize turnover and minimize fees.

Fulfillment Options and Updated Fee Policies

Amazon's 2024 fee update streamlines operations for sellers by adjusting fees associated with Fulfillment by Amazon (FBA) options. Your understanding of these changes is vital for budgeting and strategic planning.

FBA New Selection Program Fees

Under the FBA New Selection Program, Amazon incentivizes sellers to offer new products by providing fee discounts and free storage for a limited time.

In 2024, for items priced under $15, referral fees are now reduced from 17% to 5%. Products between $15 and $20 see a drop from 17% to 10%.

Be sure to capitalize on this program to save on fees when introducing new selections to your catalog.

You might also want to read:

• Amazon FBA Fees: How Much It Costs To Sell On Amazon

• How to Easily Calculate Amazon FBA Fees in 2024

Ships in Product Packaging (SIPP) Program

The Ships in Product Packaging (SIPP) Program is designed for items that are ready to ship without Amazon’s additional packaging.

Sellers participating in SIPP must ensure that product packaging is durable and meets Amazon's requirements.

You can benefit from a slight increase of $0.15 per item, which is competitively set compared to other businesses.

Monthly and Aged Inventory Storage Fees

Amazon FBA’s storage fees are competitive compared to industry standards.

Starting from April 1, 2024, you'll enjoy a reduction in monthly inventory storage fees during the off-peak periods (January-September) by $0.09 per cubic foot for standard-size products.

This new pricing will be reflected in your May invoices.

Moreover, you should remain vigilant about aged inventory as it can incur additional fees if not managed adequately.

Sizing and Packaging Updates for Sellers

In response to the changing e-commerce landscape, Amazon has revised its fee structure for 2024, with significant changes in sizing tiers and packaging fees that will impact your costs as a seller.

Fee Adjustments for Product Size Tiers

Your product sizing category plays a critical role in determining the fees you pay.

An average increase of $0.15 per unit across most size tiers reflects Amazon's effort to recalibrate its fulfillment service.

Specific sizing details are as follows:

• Standard-Size: Products may see the aforementioned average fee increase.

• Oversized: This category has been eliminated, and items previously classified here must be reviewed under the new criteria.

Packaging and Placement Fee Changes

Packaging requirements now emphasize efficiency and sustainability.

Additionally, a new inbound placement service fee has been introduced, which applies to both standard and large bulky-sized products. Here are the essentials:

• Standard-sized items: A new placement service fee categorizes items for optimized warehouse placement.

• Packaging: Ensure your items comply with Amazon's packaging guidelines to avoid unnecessary fees.

Large Bulky Items and Special Handling

Items classified as large or bulky require special handling, which incurs additional fees due to their logistical challenges. Here's what you can expect:

• Large Bulky-sized products: These will attract an inbound placement service fee, although the specifics will vary based on the item's dimensions and weight.

• Special Handling: Any products needing special treatment, whether due to size, fragility, or other factors, may also incur increased fees.

Reduced Fees and Discounts Offered by Amazon

As Amazon introduces its 2024 fees update, you'll notice strategic reductions in certain fees and the availability of discounts that aim to support sellers in various aspects of their business operations.

Reduced Referral Fee Incentives

Amazon has tailored its referral fees to benefit sellers, especially in the apparel category. Starting from January 15, 2024:

• Apparel under $15: Referral fees are reduced from 17% to 5%.

• Apparel between $15 and $20: Referral fees decrease from 17% to 10%.

This significant cut in referral fees represents Amazon’s effort to incentivize the sale of lower-priced items while potentially increasing your margins on these products.

Monthly Storage Fee Reductions

While not explicitly detailed in the search results, storage fee changes could be part of Amazon's initiative to improve cost-effectiveness for your business.

Typically, these types of changes aim to reduce your monthly storage fees, which may include both standard-size and oversized item categories.

Discounts on Partner and Prep Services

• Discounted FBA Prep Service Fees: Leveraging Amazon’s FBA Prep Service could lower costs associated with preparing items for fulfillment.

• Partnered Carrier Program: Amazon's Partnered Carrier Program may continue to offer cost-effective shipping options, staying around 70% cheaper compared to other carriers. With these shipping fees, your business could save on logistics costs.

Additional Amazon Services and Fee Implications

In the coming year, you'll need to navigate through new fee structures that Amazon has implemented, affecting various services from technological enhancements to the Vine program. Here's how these fees could influence your business operations.

Technology and Supply Chain Innovations

Amazon's 2024 fee changes reflect its continued investment in technology and supply chain improvements.

These modest increments fund advancements in Amazon's fulfillment network and global logistics operations.

With new fees averaging an increase of $0.15 per item for U.S. sellers and CAD 0.22 for those in Canada, these changes are expected to yield a more efficient, technology-driven supply chain.

This is expected to yield a more efficient, technology-driven supply chain that ultimately benefits sellers by potentially reducing long-term costs despite upfront fee increases.

Amazon Vine Program Fee Changes

Those participating in the Amazon Vine program should be aware of new cost structures taking effect.

If you leverage Amazon Vine to garner early reviews for your products, anticipate alterations in participation fees which can play a critical role in planning your marketing budget.

Specific figures have not been disclosed, but any fee changes made will aim to balance the program's efficacy with accessibility for sellers.

International Fee Considerations

International sellers, particularly in the U.S. and Canada, must account for varying fee adjustments that go into effect.

You'll encounter differences in not only the fulfillment fees but also in inbound and outbound service fees, with new inbound placement service fees for standard and large bulky-sized products.

These changes, integrated with Amazon's global logistics system, are expected to influence your cost calculations for international sales.

Best Practices for Amazon Sellers in Light of Fee Updates

With Amazon's recent adjustments to their fee structure in 2024, it has become essential for Amazon sellers to refine their approach to maintain profitability. Below are targeted strategies focusing on inventory management and product listing optimization, featuring effective methods to adapt to the new fee changes.

Strategies for Cost-Effective Inventory Management

Proper inventory management is now more crucial than ever.

With the Inbound Placement Service Fee being applied, costing on average $0.27 per unit for standard-sized products and $1.58 per unit for Large Bulky-sized products, it's vital to keep your inventory lean.

Avoid the Low-Inventory-Level Fee by maintaining an inventory level that justifies the sales velocity.

• Monitor Your Inventory Regularly: Use Amazon's tools to track inventory levels and make data-driven decisions.

• Utilize Inventory Forecasting: Anticipate demand to avoid over-stocking or under-stocking, which can lead to additional fees.

• Consider Size Tiers: Be aware of the dimensions of your products, as small standard and standard-sized items incur lower fees compared to large standard and extra-large size tiers.

Optimizing Product Listings and Shipping Weights

Shipping weights can impact fees, with small adjustments potentially leading to savings.

When listing products, consider the shipping weight in pricing.

Optimize product packaging to fit into the most cost-effective size tier without compromising product safety.

• Reassess Product Dimensions: Regularly check that your products are listed with the correct dimensions and weights to ensure accurate fee assessments.

• Package Products Efficiently: Aim for packaging that fits your product snugly, reducing unnecessary volume and possibly qualifying it for a lower size tier.

Also read related articles about optimizing your store:

• Optimize Your Amazon Product Listing for Mobile

• Amazon Product Listing/Title Optimization

Conclusion

As Amazon introduces its fee updates for 2024, it's more important than ever for sellers to fully grasp these changes. These new fees will influence your pricing strategies and could impact your margins, making it essential to reassess your approach to Amazon selling.

Ultimately, the key to success on Amazon in 2024 and beyond will be flexibility and the ability to adapt quickly. By understanding the nuances of these new fee structures, sellers can make informed decisions that protect their bottom line while delivering value to customers.

Stay ahead of the curve by continuing to read on, as we delve deeper into the specifics of Amazon's new fees and provide actionable insights for effective selling.

Frequently Asked Questions

Why are fulfillment fees so high?

Fulfillment fees can be high due to the comprehensive service Amazon provides through its Fulfillment by Amazon (FBA) program. These fees cover the costs of storing your products in Amazon's fulfillment centers, picking, packing, shipping orders, handling customer service, and managing returns.

They also reflect the investment Amazon makes in their shipping network, labor, and packaging materials, to ensure quick and reliable delivery of goods.

What percentage does Amazon charge for shipping and handling?

Amazon's fees for shipping and handling vary widely depending on factors such as the size, weight, and category of the item, as well as the seller's chosen fulfillment method.

For sellers using FBA, Amazon has a fee schedule that outlines specific charges for fulfillment services rather than a percentage of the shipping cost. Meanwhile, third-party sellers who fulfill orders themselves determine their own shipping costs, which can be a flat fee or vary by item.

What is the Amazon aged inventory surcharge?

The Amazon aged inventory surcharge is a fee imposed on items that have been stored in Amazon's fulfillment centers for an extended period. This surcharge encourages sellers to keep their inventory moving and avoid long-term storage costs.

Typically, items that sit unsold for over a certain threshold (such as 365 days) can incur this additional fee, which is added to the regular storage fees. The specific costs and timeframes for the aged inventory surcharge are detailed in Amazon’s FBA fee structure.

How often does Amazon update its fees?

Amazon typically reviews and updates its fees annually, with changes usually announced near the end of the year or in the first quarter of the new year. These updates often take effect in January or February, giving sellers time to adjust their pricing and budgeting strategies.

However, Amazon may also make mid-year adjustments if necessary. It's important for sellers to stay informed by regularly checking official Amazon announcements and emails, as well as the Amazon Seller Central portal, to keep up with the latest fee changes.