How Have Amazon's Increased FBA Fees Affected Sellers?

If you’re one of the many FBA sellers who sell on Amazon, you are likely aware of the new FBA fulfillment fees. Amazon announced the changes and fee increases in Q4 of last year, and they have been affecting Amazon sellers since the 18th of January. The changes to how fulfillment by Amazon FBA works has shaken many operating on the platform. 

These changes have been only a minor nuisance for some sellers. But for others, they have been troubling and hard to stomach.

So how have these new order fee changes affected sellers? 

Fee Increases

There has been an increase in Amazon FBA fees by an average of 5.2%. FBA fulfillment fees are one of the more impactful expenses that many sellers face. Additional increases have also occurred for storage fees in fulfillment centers. This means that items stored longer in the Amazon warehouse before sale are subject to extra Amazon charges. 

The following is a list of other increases sellers are facing:

• FBA Prep Service Fees

• Off-Peak Storage fees between January and February

• Removal and disposal fees (liquidation fees remain the same.)

• FBA Prep Service Fees

• Label Service fees

• Long-term storage fees are now on a new tiered structure of charges in addition to monthly inventory storage fees. 

These increases in fee structures have left many scrambling. Amazon claims the reason for these increases is the costs of their recent growth. Their tremendous expansion through the last couple of years has brought new challenges, including a large increase in hiring across the nation to keep up with this growth. Amazon even had to double its “Camper Force,” a team of seasonal workers who live on the road.

While added fees are frustrating, that kind of growth does come with additional costs. 

Other Changes

Not all increases are alarming. Maximum packaging weight eligibility for FBA Small and Light size tier increased from 12 oz to 3lbs.

This means that packages once considered oversize items are now included in the small standard fee structure. The Small and Light program offers a lower fee for fulfillment, and now that it’s open to packages up to 3lbs, more sellers can be eligible for it.

Some of the other changes have also been favorable. For instance, Amazon will be running free liquidations programs at different points of the year. They will also offer a 5% sales rebate on new items for sellers that complete a brand registry. Other positive changes include:

• Amazon launched FBA Grade and Resell, allowing easy resale of customer-returned items. This program helps offset the fees associated with returns processing.

• The referral fee for lawn mowers and snow throwers had gone down to 8% on items with a sale price over $500.

These positive changes help make some of the more unpleasant ones more palatable. In addition to this, Amazon has offered a few new perks due to the price hike. 

Incentives

Amazon offers some new programs as a result of the increase in fees.

Product Opportunity Explorer uses AI-driven suggestions to allow FBA sellers to grow their offerings.

The Brand Referral initiative works to reduce the marketing costs for FBA sellers on Amazon.

Amazon offers the New Seller Starter Pack incentive to first-year Amazon FBA sellers to encourage more of them. The starter pack also includes bonuses for sellers who complete a brand registry.

The Search Analytics Insights help Amazon FBA sellers adjust when needed. Know what is working and what isn’t and adjust accordingly.

Secure your Cash Flow

Whenever changes like these happen, businesses can be susceptible to financial hardship. Having to adjust to new fee structures can be difficult if money is tight. Cost increases are always going to hurt. Luckily, businesses can protect themselves from cash flow concerns through companies like Payability.

Payability streamlines a business’ cash flow. They do this through their Instant Access and Instant Advance programs.

Instant Access provides clients with quick and simple access to their eCommerce sales. Through this tool, businesses can receive daily payouts on their sales instead of waiting around for them to clear. Payability also offers the Payability Seller Card, which provides users with up to 2% cashback on every purchase.

Instant Advance provides next-day cash-infusions for businesses that need a little bump of revenue to reach the next level. No credit checks are necessary, and companies can get up to $250k!

If you are interested in exploring possible growth funding options with Payability, feel free to get started - here.