The Latest Amazon Seller Fees to Watch Out for in 2024

In a recent email, Amazon announced a series of changes to Amazon seller fees that will potentially come into effect in Q1 2024. Some fees are being increased while others are being decreased. These adjustments, aimed at providing enhanced value and operational efficiency, have both pros and cons for 3rd party Amazon sellers. 

Amazon stated in their email that they, “will focus on how we partner together to inbound and place inventory across our network. Placing inventory close to customers improves the speed of those orders, driving more sales at lower transportation costs. To enable more efficient use of our network, we will begin charging separately for inbound and outbound activities. As a result, we will lower our outbound fees while creating new inbound fees that you can reduce or avoid entirely based on how you inbound products.” 

Let’s do a deep dive into the details of these changes to examine the pros and cons of each fee structure change. 

Inbound and Outbound Fee Restructuring

One significant alteration in the Amazon seller fee structure that is set to start on March 1, 2024, involves the introduction of an inbound placement service fee for standard and Large Bulk-sized products that reflects Amazon’s cost of distributing inventory to fulfillment centers that are close to customers. 

The fees would average $0.27 per unit for standard-sized products and $1.58 per unit for large bulky-sized products. Amazon will give sellers the option to either pay reduced fees or no fees based on whether that seller ships to one location or multiple locations. 

The upside is that it reflects a commitment to bringing inventory closer to customers, potentially boosting sales. However, sellers may face added costs, albeit with the flexibility to reduce or avoid fees based on their inbound strategies.

Simultaneously, the decrease in FBA fulfillment fees starting on April 15, 2024, for standard and Large Bulky-sized products presents a tangible benefit, offsetting the impact of the new inbound fees. 

On average, Amazon is set to decrease the FBA fulfillment fee rates for standard-sized products by $0.20 per unit and by $0.61 per unit for Large Bulky-sized products. Products that are priced below $10 will continue to have a $0.77 discount per unit on fees.

Additionally, if the seller ships their products into an FBA warehouse that can be shipped in their existing packaging, there will be an additional discount ranging from $0.04 to $1.32 depending on the item size and weight for eligible products in the Ships in Product Packaging. 

These discounts will start on February 5, 2024, and could possibly carry a few benefits for sellers. One benefit of sending in products that can be shipped in their original packaging is that sellers can engineer their packaging in such a way that they can prevent the products from being damaged or broken during shipment. Items arriving intact in their packaging could potentially help reduce the refund rate of an item.  

This also encourages eco-friendly packaging practices so that items shipped to FBA warehouses don’t need to be repackaged with more material before being shipped out to customers.  

Ships in Product Packaging (SIPP) Program

If the Amazon seller ships their products into an FBA warehouse—which can then be shipped in their existing packaging—there will be an additional discount ranging from $0.04 to $1.32 depending on both the item size and weight for eligible products in the Ships in Product Packaging. 

Inventory Management Changes

The imposition of a low-inventory-level fee for standard-sized products, which is set to start on April 1, 2024, is a double-edged sword. On one hand, it encourages sellers to maintain optimal inventory levels, reducing transportation costs and enhancing fulfillment efficiency. On the other hand, however, sellers consistently struggling with low inventory levels may find themselves burdened with additional fees. 

The reduction in non-peak (January-September) monthly storage fees for standard-size products is aimed at helping sellers maintain healthy levels of inventory so that they do not run out of stock. Because of this, customers will be able to purchase their products year-round without delay. 

Furthermore, Amazon will reduce the non-peak monthly storage fees for standard-sized products by an average of $0.09 per cubic foot, taking fees down from $0.87 per cubic foot to $0.78 per cubic foot from January through September. However, monthly Amazon seller fees for non-standard-sized products will remain the same.  

New Services and Benefits

Amazon’s efforts to reduce referral fees for certain product categories and revise Amazon Vine pricing while expanding the benefits of the US FBA New Selection program are undeniably positive. These changes open new avenues for sellers to reduce costs, gain valuable reviews, and broaden their product selection. 

Amazon will reduce referral fees on apparel products priced below $20. For items priced under $15, Amazon will decrease fees from 17% to 5%. For products priced between $15 and $20 Amazon will decrease fees from 17% to 10%, leaving more room for profitability for sellers and better pricing for customers. Referral fees in all other categories will remain the same. 

The Vine program also has a new reduced-cost structure based on the number of reviews received. 

Finally, Amazon will be providing a 10% rebate average on sales of eligible New to FBA parent products. These latest updates are something that sellers can take advantage of to boost sales and profitability while simultaneously expanding their catalog on Amazon. 

Returns Processing Fee

The introduction of a returns processing fee starting June 1, 2024 (excluding shoes and apparel) for high return-rate products aims at addressing operational costs and reducing waste at the same time. 

While this move aligns with sustainability goals, it may create financial challenges for Amazon sellers dealing with products prone to higher return rates. However, if a seller is currently getting high returns for a product, this might be the time to reengineer and address customer concerns for a reduced return rate. Each product category will have a different threshold for returns and, if you surpass that threshold, fees will be charged.

Conclusion

As we navigate through these upcoming changes, it’s evident that Amazon is committed to fostering an ecosystem that benefits both sellers and customers. While the adjustments come with challenges, they also present opportunities for sellers to optimize their strategies and potentially reduce costs. The key lies in adaptability and a thorough understanding of the implications of each change. As we take the first steps into 2024, the Amazon seller community—not to mention other popular Amazon Seller forums—will undoubtedly witness a dynamic landscape, shaped by these fee adjustments, where resilience and innovation will be the keys to continued success.