The Pros and Cons of Amazon Price Changes

Amazon is making some serious changes to the cost of Fulfillment Fees, Storage Fees, Seller Shipment Requirements, and the Zero-Fee Fulfillment. Stop stressing for now, there are some positives to a couple of the changes. We know that most, if not all, of the shipping companies are increasing their cost this year. USPS is raising rates too. This increase in cost for Amazon could be part of the reason for the increase in cost. Well, let’s get into what’s happening.

FBA Fulfillment Fees:

Amazon is condensing the Order Handling, Pick & Pack, and Weight Handling fees into just one charge. Do you even know where to see these charges within your Seller Central Account? They are in the Transaction details page by going to “Reports” – “Payments”.

Pros:

• If your items are “Small standard size” or “Large standard size” weighing 1 lb. or less, you are in luck. The per item fee will go down 15 cents if it’s “Small stand size” and only 3 cents for “Large standard size.
• In 2016, they lowered the fulfillment cost for only November and December. This year you will see Amazon is adding October to the lower fulfillment timeframe. Small standard size will go only go down another 2 cents with Large standard size (both 1 lb. or less) will see a drop of 11 cents to $2.88 which is the same price as 2016; you just get an extra month compared to 2016.
• For the Large standard size over 1 lb., you will really see more cons but have a pro of an extra month, October, to enjoy the lower fulfillment cost compared to 2016.

Cons:

• If your product falls into the Large standard size 1 to 2 lb. and the over 2 lbs. category, watch out! Your product’s fulfillment cost is going up!!! The base price is going up 17 cents in the first 9 months and you will see a drop to $3.96 compared to $4.18 for the last three months. Of course, they are keeping the extra charge per lb. after the first 2 lbs. Price is maintaining at the same $.39/lb. after the 1^st two pounds.

For Media, it is all a negative and seeing an increase in Fulfillment Fees across the board.

If your products fall into the “Oversize” category, your profits will see a hit this year as well due to an increase in FBA Fulfillment Fees. Going to keep the chart basic and show just the minimum a per item fulfillment fee which includes the first 2 pounds. All the per pound over the first 2 pounds are staying the same. For Media, it is all a negative and seeing an increase in Fulfillment Fees across the board.

Monthly Inventory Storage Fee

As many of you already know, Amazon increased the storage fees for November and December 2016. Many Amazon FBA sellers were surprised when they saw their November monthly storage fee. This time of year is hard for sellers when it comes to how much product they want sitting in a FBA warehouse. Well, more bad news for this year and your storage needs. You can also read more about FBA storage fees in our article, Amazon Storage Fees.

Inventory Placement Service Fees

There isn’t much good news when it comes to Inventory Placement Services Fees. When you are shipping units to Amazon FBA, sometimes it is easy and all the units can go to one FBA warehouse, and then there are times when Amazon splits up the units and has you ship inventory to three different locations. The changes are going into effect on July 19^th, 2017. Basically, instead of Amazon paying to move your products around the US to other FBA warehouses, Amazon is going to start charging you.

Pro: Amazon charged a flat rate of $0.30 + $0.10/lb above the first 2 lbs. and $1.30 + $0.20/.lb above the first 5 lbs. for when you picked the number of locations. Now, Amazon has introduced a somewhat tier pricing. So, you only pay the price mentioned above when Amazon gives you three locations and you pick 1. If you pick two out of three or one out of 2, you pay less for Inventory Placement.

Con: Amazon is claiming they will be increasing how often the ask sellers to ship inventory to multiple locations. This will add extra stress for seller that have their inventory shipped straight from their supplier to Amazon FBA.

The services that Add to Cart Consultants provides will help with your inventory replenishment needs. We provide free pick & pack of your units to be shipped into FBA. So, instead of having high inventory cost or worrying about making sure your supplier labels the boxes correctly, we provide affordable shipping from your supplier to us, better storage rate fees, and we do the leg work of getting your units to any FBA warehouse.

Robert Ross has been in the Brick & Mortar and e-Commerce industry since 2010. He has helped companies get their products into big box stores and onto numerous e-Commerce platforms. Robert and Add to Cart Consultants assist businesses with their logistics, warehousing, shipping, inventory control, and provides consulting from his 7 plus years of retail experience. Add to Cart Consultants helps businesses save money and increase their bottom line by providing excellent services at an affordable rate.