Online entrepreneurs who are actively selling on Amazon are aware of the Amazon seller fees and how Amazon constantly updates these fees. With the holiday season drawing near, Amazon recently announced an FBA fee increase.
This article sheds light on the reason for the FBA fulfillment fee increase. It will also acquaint you with some of the specific FBA fees that will increase as the Amazon Black Friday, Amazon Christmas Sales, and other holiday shopping events draw near.
Why Amazon Fees Will Increase for Q4 of 2022
Amazon recently released a statement informing sellers of the impending fulfillment fee increase. According to Amazon, the Amazon fee update is brought about by the expected increased utilization of their fulfillment network during the busy holiday shopping season.
Holiday shopping events such as Amazon Black Friday and Amazon Christmas Sales will generate concentrated volumes of shipments. Thus, increasing fulfillment and logistics costs for Amazon.
Amazon also highlighted that they previously absorbed these fulfillment and logistic costs, but the seasonal expenses have reached new heights. Therefore, it prompts an update on specific FBA fees.
Amazon Seller Fees Update – FBA Fee Changes You Should Be Aware Of
The Amazon FBA fulfillment fee increase will take effect on October 15, 2022, and is expected to last up to January 14, 2023. According to Amazon, the impending Amazon seller fee increase will affect items sold using the US FBA and remote fulfillment with FBA.
Additionally, the average fulfillment fee increase is around 0.35 USD per item sold. Here are some of the critical Amazon fee updates you should know. These fulfillment changes are based on product weight and size.
Updated US FBA Fees for Q4 of 2022
For those Amazon sellers using US FBA, fulfillment fee updates will take effect between October 15, 2022, and January 14, 2023. The fees will then revert to their non-peak rates. For comparison, here are both non-peak and peak fulfillment fee rates.
FBA Fulfillment Fees – Non-Peak Rates (excluding apparel)
Table Source: Amazon Seller Central
FBA Fulfillment Fees – Peak Rates (excluding apparel)
Table Source: Amazon Seller Central
FBA Fulfillment Fees – Non-Peak Rates (for apparel)
Table Source: Amazon Seller Central
FBA Fulfillment Fees – Peak Rates (for apparel)
Table Source: Amazon Seller Central
Remote Fulfillment with FBA – Updated Fees for Q4 of 2022
As mentioned earlier, fulfillment fee updates will also be implemented for remote fulfillment. Remote fulfillment is an FBA program that Amazon offers to all sellers in the US, allowing them to sell their products to consumers in Mexico and Canada without having to send inventory to the aforementioned countries.
Remote Fulfillment with FBA – Mexico (standard-size product tiers)
Table Source: Amazon Seller Central
Remote Fulfillment with FBA – Mexico (oversize product tiers)
Table Source: Amazon Seller Central
Remote Fulfillment with FBA – Canada (standard-size product tiers)
Table Source: Amazon Seller Central
Remote Fulfillment with FBA – Canada (oversize product tiers)
Table Source: Amazon Seller Central
It is worth noting that the rates listed above are rounded off for simplicity. To better understand the rates and other specifics concerning the peak and non-peak fulfillment fees, you can further check Amazon’s US FBA and remote fulfillment with FBA fee changes.
Amazon Holiday Peak Preparation Tips – Best Practices
Apart from the fee updates, Amazon sellers should also be mindful of the potential increase in sales volume. Here is a list of best practices during the peak holiday season to help you prepare and successfully manage your store engagement, queries, and fulfillment.
Be Mindful of Seller Metrics
Regularly tracking your seller performance can help you address potential issues with your Amazon business. It is vital to maintain your account eligibility. Amazon suggests the following performance metrics for sellers to maintain account eligibility.
- Order Defect Rate should be under 1%
- Valid Tracking Rate should be over 95%
- A Late Shipment Rate should under 4%
- On-time Delivery Rate should at least be 97%
- Pre-fulfillment Cancel Rate should not be more than 2.5%
Always Recheck Order Fulfillment
Since you will likely receive voluminous orders during the holiday season, you should manage your orders closely. It means that you should regularly check order notifications. It would also help to update your notification settings.
Relying solely on “Sold, Ship Now” emails for orders notification is not enough; you should be on top of it. You should update your phone number on the Amazon Dashboard under merchant default contact if you recently made a number change.
Product Data Accuracy
When creating or matching product detail pages, Amazon encourages sellers to provide accurate product data, including unique standard identifiers such as EAN/UPC barcode and International Standard Book Number (ISBN).
More importantly, ensure that your product description and condition notes are clearly expressed when listing a product. Avoid adding unnecessary details that will confuse Amazon shoppers.
To increase the likelihood of your listing appearing on the organic search result page of Amazon, make sure to use proper keywords. With the help of a keyword research tool, you can identify keywords with high search volume that you can use for your product descriptions.
Develop an Effective Pricing Strategy
Although there will be more money for shoppers to splurge on Amazon during the holiday season, it is still best to offer them competitive prices. Create a pricing strategy that will entice Amazon shoppers to check your product and for the Amazon algorithm to consider your listing for the Buy Box.
The Amazon Buy Box is a crucial element for your profitable holiday sale. Winning more Amazon Buy Box means increased sales conversion. To increase your Buy Box win rate, you can use an Amazon repricer to help you obtain a competitive price point for your listings.
Assess your Staffing Plans
As part of your store preparations, you should also review your staffing plans for the holiday season. Ensure you have enough staff to handle other business concerns, including customer service and checking orders.
Although you will be using the FBA method, it is still worth having additional people to deal with mundane tasks. Thus, giving you more time to deal with crucial aspects of your Amazon business.
Holistic Preparation
Amazon has announced the Amazon seller fee changes affecting fulfillment fee rates in the US and those operating their business through remote fulfillment with FBA. The notice of FBA fee changes allows sellers to make the necessary preparations and adjustments to their business operations.
As part of improving your overall business process amidst the drawing holiday season, it is highly recommended that you consider utilizing Amazon seller tools.
Amazon seller tools such as repricing software, product research, and keyword research tools can create a massive difference in your business performance as it aids in providing you a competitive edge over other sellers in the Amazon marketplace.
