Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Dec 9 2015 14:56:24

Brace Yourself for Amazon FBA Fee Hike 2016

By: Ina Steiner

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Sellers who use Fulfillment By Amazon (FBA) should brace themselves for a rate hike going into effect in February. Amazon told EcommerceBytes it periodically adjusts fees due to rising labor and transportation costs.

It appears the bigger the product, the bigger the rate increase for certain FBA services.

Monthly Inventory Storage Fees for Standard-Size products are going up almost 6% effective March 1, 2016, from 51 cents/cubic foot to 54 cents. And for the busy months of October and November and December, rates are increasing from 68 cents to 72 cents/cubic foot, also a less than 6% increase. 

Monthly Inventory Storage Fees will rise by 7.5% for oversize items.

Fulfillment Fees for Standard-Size products are also going up, on February 18, 2016:

- Order Handling fees per order are not changing.

- Pick & Pack per unit are rising almost 2%.

Weight Handling rates for Small Standard-Size (1 lb or less) are not changing, while Weight Handling rates for Large Standard-Size (over 2 lbs) are going up 41% for the first 2 pounds for Media and 23% for the first 2 pounds for Non-Media - the other tiers (Large Standard-Size  under 1 pound and between 1 - 2 pounds.

Fees for Order Handling, Zero-Fee Fulfillment Long-Term Storage, and FBA Prep Services are not affected by this change and will continue to apply where applicable. Multi-Channel Fulfillment fees will not change at this time

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."

Sellers who use Merchant Fulfilled may be wondering if Amazon will increase shipping credits, since it's acknowledging the rising cost of shipping. An Amazon spokesperson could not address that since it was not a part of today's announcement, so it will be interesting to see if the company makes changes to non-Amazon fulfilled shipping.

Let us know how this impacts your business, and if you will make any changes to your practices.




Comments (16) | Leave Comment | Permalink

Readers Comments

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This user has validated their user name. by: Ming the Merciless

Wed Dec 9 18:06:53 2015

Increased "transportaion costs?"

What a load of BS! Gas and diesel are much cheaper than they were 2-3 years ago.

Maybe if Amazon would abandon its manic delivery time schemes, they wouldn't have to force FBA sellers to cover Amazon's "increased" costs.

Amazon is rapidly reaching the depths of ebafia despicableness.

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This user has validated their user name. by: RKTOYS

Wed Dec 9 18:53:37 2015

I saw FBA as the scam it is right from the start so I won't be making any changes because I didn't fall for it.

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This user has validated their user name. by: Rexford

Wed Dec 9 20:16:26 2015

Greed is Good! Greed is Good!

Perminate Link for Brace Yourself for Amazon FBA Fee Hike 2016   Brace Yourself for Amazon FBA Fee Hike 2016

This user has validated their user name. by: Ric

Thu Dec 10 06:15:34 2015

Hey... SOMEONE has to pay for that fleet of tractor trailers Amazon is buying.

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by: Randy This user has validated their user name.

Thu Dec 10 11:01:31 2015

How does anyone make money using FBA? I don't understand it. I guess people just fall for that free 2 day shipping crap instead of searching for the lowest price!

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This user has validated their user name. by: toolguy

Thu Dec 10 11:37:14 2015

I DON'T sell on Amazon so this affects me NOT!

I've only bought 1 item on Amazon over the past 15 years. . .

I don't flow with the river because I'm too busy sailing the bay ~ LOL

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This user has validated their user name. by: eXtinctBay

Thu Dec 10 11:57:12 2015

Another good reason not to go with Amazon Fulfillment.

Most sellers use it because they think this will make them immune to bad feedback.

Truth is, rarely you will see an FBA seller with a 100% score. Of those who use this program, the majority seem to not take the time to list description details properly.

I keep it simple on the River. No FBA, no International shipping, perhaps a bit less money, but definitely less stress and more peace of mind.

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This user has validated their user name. by: iheartjacksparrow

Thu Dec 10 16:52:23 2015

I've never sold on Amazon, and if I did I wouldn't participate in the FBA because I'd be extremely paranoid that with someone else in control of my items, something could, and probably would, go wrong. But I now have a new appreciation of people who sell there as I had no idea it was so expensive and that sellers had to pay for storage of their items.  

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This user has validated their user name. by: Basset

Thu Dec 10 22:38:09 2015


Labor supply and rising wages was my first thought when I read the post. Bloomberg article by Adam Satarino and Spencer Soper seems to support that idea but emphasis is on rising cost of temps and how THAT affects Amazon.

http://www.bloomberg.com/news/articles/2015-12-10/what-
amazon-wants-for-christmas-100-000-temps
 

Amazon keeps building distribution centers & hire thousands at a time, but there are ''help wanted'' signs up everywhere and small business owners say there is wage pressure - so I'm wondering if even full time employees are harder for Amazon to come by - at least in some areas.

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by: koonkat This user has validated their user name.

Fri Dec 11 00:57:30 2015

I sell on Amazon using FBA for some items.  Unfortunately, it invites competition from slimy commodity sellers, speeding the race to the bottom.  I just sold out one item this week that will not return to FBA.  Some sellers are satisfied making .02 per unit-seriously!

I hiking the attention to my own store now.  

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by: mindelec This user has validated their user name.

Fri Dec 11 03:18:13 2015

I saw  this as a possible outcome of FBA years ago and stayed away from the am any ways they nickel and dime those sellers.

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by: mindelec This user has validated their user name.

Fri Dec 11 03:25:35 2015

@basset

The first sentence of that article literally shocked me...

"The day before Thanksgiving, Nam Paan dressed for his job interview in a black hooded sweatshirt and matching sweatpants."

He dressed that way for a job interview and actually got hired?  

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by: Chicago48 This user has validated their user name.

Fri Dec 11 07:46:19 2015

AMZ may be buying its own fleet of trucks and airlines in the near future.  This bypasses UPS and Fedex charges.

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This user has validated their user name. by: Al G

Fri Dec 11 09:13:26 2015

@mindelec

Yes, he got hired. A 20ish-something college student applying for a job where the employer is desperate for a body who can walk, talk & take basic instructions.

It used to be called ditch-digging when I was threatened as a kid by my parents to study - and at that time you applied for THAT job in the 1930's you applied wearing a tie/vest/collard shirt/jacket & hat. You only owned one pair of shoes, so no choice there.

While amusing, times have changed, and, I don't think Nam would be dressed the same if he applied for an analyst position in Goldman-Sachs. Learning to be a machinist (in college?) is a great skill & very well paid. Good for him!

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by: Moonwishes This user has validated their user name.
Web Site

Fri Dec 11 10:17:46 2015

I've been selling on Amazon for years, but I never understood the FBA thing and how anyone could make money using it, at least for cheap goods. Up until recently I never bought a thing from those selling with FBA either. But then when Amazon had Prime on sale I jumped at the chance to not have to be sure every time I ordered I hit $35 to get the 'free' shipping. I did it for business reasons for as well since I got tired of listing on a page and seeing these basically FBA/penny sellers combined with super cheap products that showed NO knowledge of what their product should sell for. So about two weeks ago I was listing an item for $19.99 and what was there but one FBA listing for $2.10 with Prime shipping and Amazon's out of stock listing for $18+. So I bought the $2.10 item and got it out of the way. I figured if it was in good enough shape I could relist it at my price which I did. The very interesting thing I noticed about this, was they literally waited 48 before shipping this product that was in the warehouse. All the items that I had shipped myself the day I bought this one had all arrived at their destinations, some several days ahead of my delivery. So having Prime doesn't mean you get super fast shipping unless Amazon has a reason to want you to have it. But looking at the chart up there, I'm not sure how the owner of the what I bought made anything when you think cost to acquire and also the cost to ship to the warehouse. Why are people giving away what little profits they could/would make? Like I said I don't understand, but when possible I will take advantage of FBA sellers when I can.  

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by: mindelec This user has validated their user name.

Sat Dec 12 01:53:22 2015

@AIG

Yeah times have changed.  I was brought up that you should always wear a tie and slacks for any interview.

@moonwishes

The only way I figure they are making any money at that price point is if they turn it over in a month or less. I've also seen prime strangeness, like 2 items on the same order having different prime delivery days.



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