2024 FBA Fulfillment Fee Changes

Amazon's 2024 FBA (Fulfillment by Amazon) fee changes bring several impacts for sellers, particularly around fulfillment, storage, and inventory management. Here are the key takeaways:

Major FBA Fee Changes:

• Increased Fulfillment Fees: While some categories see reduced fulfillment fees, standard-size and heavy items incur higher rates.

• New Inventory Storage Fees: Sellers face increased monthly storage costs and additional peak-season surcharges.

• Low Inventory Storage Fee: A new fee penalizes sellers for keeping too little inventory in FBA, pushing for better stock management.

• Increased Inbound Placement Service Fees: Amazon raised fees for the placement of goods at designated fulfillment centers, adding to logistics costs.

Implications for Sellers:

• Inventory Management Adjustments: Sellers must streamline their inventory levels, ensuring they avoid understocking, which could now lead to additional fees.

• Cost Review: Understanding the increased costs may lead sellers to raise product prices, absorb the costs, or look for cheaper fulfillment alternatives.

• Optimized Packaging: Amazon offers discounts for eco-friendly, compact packaging, presenting an opportunity for sellers to reduce fees by optimizing product packaging.

Strategies for Sellers:

• Alternative Fulfillment Options: Sellers may explore third-party logistics providers (3PLs) or hybrid models that combine FBA with alternative solutions.

• Leverage Seller Fulfilled Prime (SFP): Some sellers may consider Seller Fulfilled Prime (SFP), maintaining the Prime badge without the increasing costs of FBA fees.

• Use Inventory Performance Index (IPI): Sellers should monitor their IPI score closely, as it directly affects storage fees and inventory management.