New Amazon FBA Fees Affecting Sellers in February 2019
Amazon New FBA Fees include changes to their Fulfilled by Amazon (FBA) fee structures this February, and sellers could be affected. While the costs to fulfill, transport and deliver Amazon goods to customers has increased this year, Amazon is working to limit the number of changes to the fee structure. It is estimated over 40 percent of all FBA units shipped won’t incur any changes to their fee structure. Starting mid-month, Amazon will be reducing costs associated with storage fees and referral fees, while increasing fulfillment fees for larger items. For an explanation of these changes, see the corresponding breakdown of storage, referral and fulfillment fees below.
Storage Fee Changes—beginning February 15, 2019
Decrease
Good news for brands prone to long-term storage fees—Amazon has extended the threshold for long-term storage to 365 days from the previous 181 days. The last long-term storage fee charge for inventory in a fulfillment center between 181 and 365 days will be January 15, 2019. Amazon will continue to charge long-term storage fees for units stored in fulfillment centers longer than 365 days.
Furthermore, Amazon will reduce the minimum long-term storage fee on units that have been in a fulfillment center longer than 365 days from $0.50 per unit to $0.15 per unit. The last charge at $0.50 per unit will be January 15, 2019. The greater of the applicable total long-term storage fee or the minimum long-term storage fee will be charged.
Increase
In April 2019, new Amazon FBA fees include the introduction of a new monthly storage charge for products that fall under the dangerous goods category and contain flammable or pressurized aerosol substances. The fees for storage of items in this category during Q4 will see a significant increase.
Referral Fee Decreases—beginning February 19, 2019
Amazon Referral Fees are enforced to support costs associated with connecting sellers to customers worldwide—in addition to processing credit cards, monitoring transaction risk, and providing customer support. Referral fees are only charged once your product sells. The final fee is based off the total sales price, excluding taxes, which includes the item price and any shipping or gift wrap charges.
On February 19, 2019, Amazon will lower the per-item minimum fee in 30 categories from $1 to $0.30 per item, and from $2 to $0.30 per item for Jewelry and Watches. Most categories will see a reduction in their referral percentage as well:
- Amazon will lower the referral fee percentage for Beauty, Health & Personal Care, and Baby products (excluding Baby Apparel) from 15% to 8% on items with a total sales price of $10 or less. They will continue to charge a fee of 15% on items with a total sales price above $10.
- Amazon will reduce the referral fee percentage for Grocery & Gourmet products from 15% to 8% on products with a total sales price of $15 or less. They will continue to charge a fee of 15% on products with a total sales price above $15.
- Amazon will reduce the referral fee percentage for Jewelry items from 20% to 5% on any portion of the total sales price above $250. For a complete breakdown of the referral percentage changes and decreases by category, visit Selling on Amazon Fee Schedule.
Fulfillment Fee Increases—beginning February 19, 2019
If your products are categorized as small standard-size or large standard-size and have a shipping weight under 10 oz., you will not encounter any fulfillment fee changes. There will be, however, slight increases applied to items over 10 oz. or those which are categorized as oversized. Oversized items will also be subject to a change in the dimensional billing weight calculation. Amazon will apply a minimum width and height of 2 inches when calculating dimensional weight for oversize items. More detailed information about item size distinctions can be found on Seller Central.
New Amazon FBA fees also include additional fulfillment fees for dangerous goods that contain flammable or pressurized aerosol substances and items that contain lithium-ion batteries. For more information, see the Dangerous Goods Identification Guide.
Beginning in September 2019, Subscribe and Save fee structures will be simplified. You will be able to fund a flat discount of 5 percent or 10 percent, for each new item added to the program. The discount percentage option you choose will be applied to all subscriptions for that item. If a customer orders product from five or more subscriptions per month, delivered to the same address, Amazon will give an additional 5 percent discount to the customer.
Ideoclick specializes in helping clients navigate the complexities of selling on Amazon. Contact us to learn more about our comprehensive e-Commerce Optimization Platform.
Post by Megan Brown, a former journalist and now an e-commerce and marketing specialist for Ideoclick.