Amazon is raising fees next years for US sellers who use its Fulfillment By Amazon service, citing rising labor and transportation costs. Some of the rate hikes depend on whether the product is Media, non-Media, or Clothing. Almost all rate increases are tied to the size of the product.
Amazon sent an email to sellers on Wednesday afternoon. It began with the following paragraph:
“We’re writing to notify you of next year’s changes to Fulfillment by Amazon fees in the U.S. As in previous years, we will be adjusting our rates to reflect the changing costs of storage, fulfillment, transportation, and customer service. To give you time to plan for these fee changes, they will not take effect until February 18, 2016 or later, after the holiday selling season.”
Sellers are impacted differently depending on their business model and what they sell. One merchant who sells items weighing under 1 pound said it wasn’t even close to being a deal-breaker. Another who sells Large Standard-Size items said the weight handling cost would go up 52% for their items and was gravely concerned due to low margins in the category in which they sell.
Amazon sent EcommerceBytes the chart it emailed to sellers comparing current fees with the new fees, which go into effect on February 18, 2016.
Fees not changing include: Order Handling fees per order, Fees for Zero-Fee Fulfillment, Long-Term Storage, and FBA Prep Services, as well as Multi-Channel Fulfillment fees.
Pick & Pack per unit are rising almost 2%.
Monthly Inventory Storage fees are increasing by less than 6%, and are increasing by 7.5% for oversize items.
Weight Handling rates for Small Standard-Size (1 lb or less) are not changing.
However, the biggest rate increases of all are seen in Weight Handling for items larger than “Small Standard-size” – anywhere from 23% to 52%.
In sharing thoughts about the changes, sellers discussed whether transportation costs were really rising with the price of gas having decreased, but others pointed out that UPS and FedEx rates are going up in January, and USPS rates are going up by a lot for some of its shipping services next year.
FBA merchants who might be considering switching to Merchant Fulfilled should certainly study those rates, especially the new pending US Postal Service rates, and crunch the numbers, factoring in all of the services that come with FBA.
Sellers also addressed the reports that Amazon is building its own shipping network – but, one seller wrote, “wouldn’t this actually bring costs down?”
An Amazon spokesperson provided EcommerceBytes with the following statement:
“We remain dedicated to providing high value to our sellers. Periodically, we adjust fees due to rising labor and transportations costs. FBA offers Sellers a fulfillment service that provides 2-day Prime shipping nationwide, same and next day shipping in select areas and Amazon’s award-winning customer service. FBA provides Sellers the opportunity to grow their business around the world at a lower cost than if they purchased these services separately.”
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