Amazon FBA Fee Changes 2020
It is absolutely critical for every business owner to understand all the costs that affect the bottom line. FBA fees form a huge part of the overhead costs and have to be carefully monitored.
Some of the Amazon FBA fees have been revised, which came into effect early this year. It is imperative to take these changes into account while calculating net margin
What drove the change?
Amazon announced, “This year we invested more than $15 billion in infrastructure, programs, people, and 150 new tools and services to help our sellers grow their brands and businesses. We also invested billions of dollars to expand FREE One-Day Delivery to more than 10 million Prime-eligible items. We are thrilled with the response of our mutual customers. Thank you for your continued innovation in providing unique selection and low prices for customers.
Driven by FREE One-Day Delivery, this was the largest one-year investment we have ever made in FBA. Nevertheless, in 2020, we will make only moderate increases (about 3%) in fulfillment fees, below industry average, because we remain committed to your continued success. We will also decrease select referral fees and introduce an exciting new selection program“
Amazon probably believes it’s only fair to share some of the costs with the 3rd party sellers who are using Amazon’s platform and the upgraded premium FBA services
Amazon FBA Fee Changes 2020
Four areas of Amazon FBA has seen a rise in the fees
- Fulfillment Fees
- Monthly Storage, Label Service, Removal & Disposal Fees
- Referral Fees
- Small and Light Fees
All the fee changes came into effect on Feb 18, 2020
Fulfillment Fees Changes
Core FBA fulfillment fee excluding clothing, sees an increase especially for sizes — Small Standard, Large Standard, and medium oversize. There is an increase in fees for all sizes in the clothing category
Monthly Storage Fee Changes
Although there is no change in the storage fee for oversized items, inventory storage fees will increase by $0.06 per cubic foot for standard-size items between the months Jan & Sep. However, this change will only reflect in the month of April for the inventory stored in March 2020. No change has been announced for Quarter 4 so far
FBA Label Service Fee Changes
Label Service fee is increased from $0.20 per unit to $0.30 per unit. However, the per-unit fee will be only $0.10 for FBA Small and Light.
FBA Removal and Disposal Order Fee Changes
Removal order fee has been reduced for standard size items from $0.50 to upto $0.25, while it increased for oversized and special handling items from $0.60 to more than $1.90. The disposal order fee has been increased for all size tiers.
FBA Small and Light Fee Changes
Any product that is within the dimensions 16 x 9 x 4 inches or less, weighs 10 oz or less, and is priced at $7 or less is eligible for Small and Light. According to the new policy changes, fulfillment fees for products that weigh less than 4 oz will be charged $1.97 and products that weigh between 4 oz and 10 oz, will be charged $2.39 per unit.
Other changes include -
- Order handling, pick & pack, and weight handling fees consolidated into a single per-unit fulfillment fee by weight.
- Amazon charges $0.10 per unit for Small and Light items in the optional FBA Label Service.
- Long-term storage fees are eliminated for Small and Light units that have been in a fulfillment center for 181 to 365 days.
- Amazon has discontinued Small and Light-specific long-term storage fee rates. All standard FBA storage fees apply to Small and Light, which will reduce the per-unit fee from $0.50 to $0.15.
- Small and Light removal and disposal order fees are the same as the fees for standard FBA.
FBA Referral Fee Changes
Shoes, Handbags & Sunglasses
Referral fee percentage has been reduced from 18% to 15% for products with a total sales price above $75.00.
Outdoor furniture
Outdoor furniture products are consolidated into the Furniture category, which has reduced the referral fee percentage from 15% to 10% on any portion of the total sales price above $200.00.
Personal care appliances
Personal care appliances products are consolidated into the Health & Personal Care category, which has lowered the referral fee percentage for personal care appliances from 15% to 8% for items with a total sales price of $10.00 or less. Items with a total sales price above $10.00 for that category will remain 15%.
Activewear
All activewear clothing is charged by the Clothing & Accessories category referral fee percentage of 17%.
Ring accessories
Ring accessories is consolidated into the Amazon Device Accessories category, which has a referral fee percentage of 45%.
All the extra charges have to be accounted for early on in the year in the profit calculation to avoid any surprises in the year-end closing entry
