Amazon announced they will be raising fees for the FBA program. The new FBA fulfillment fees take effect on February 22, 2018. Below is a summary of the changes, what this means for your business and how you can plan accordingly.
Summary of Changes:
- Increase in fulfillment fees for a majority of product size tiers and weights. The adjustment in fees will apply year-round, and there will no longer be a separate fulfillment rate for Q4.
- Dimensional weight calculation will change to reflect current industry best practices. At this time, dimensional weight is calculated by unit volume divided by 166. Effective February 22, 2018, this calculation will change to unit volume divided by 139. Unit volume is based on length X width X height in inches. Dimensional weight calculations only apply to large standard-size items that weigh more than one pound, and all small, medium and large oversize items.
- No storage fee increases planned at the current time. (Amazon will announce changes in early 2018)
Planning for Increases
Amazon offers programs that that can help mitigate these fee increases such as Seller Fulfilled Prime and FBA Onsite. Seller Fulfilled Prime allows you the seller to display the Prime badge on your listings and fulfill from your own facilities. Amazon SFP sellers must adhere to Amazon Prime’s strict shipping standards and meet several requirements. With FBA Onsite, Amazon uses warehouse software to help third-party sellers with the logistics of their own warehouses. The software includes management assistance, like packing, shipping and enables third parties to act like Amazon’s own warehouses and meet the stringent standards that Prime guarantees.
It is essential as you plan your Amazon business to be aware of the 2018 FBA fee increases. Preparing for this increase will enable you to make any changes necessary to protect your margins. The new fee changes may also impact your product assortment for the year, as well as your return costs.
To get complete details on the FBA fee changes, click here to see the current and new FBA fees.