The upcoming Amazon fee changes are brought about by multiple factors affecting Amazon’s business operations and the eCommerce industry in its totality. The new Amazon fees for 2024 are designed to motivate sellers to utilize the platform’s services to benefit all parties involved, facilitating faster deliveries and ensuring efficient use of space in Amazon fulfillment centers.

Amazon Fee Changes in 2024 | Summary 

As Amazon continues to invest in technology, infrastructure, transportation, and people in order to innovate its services, additional costs are bound to be incurred. The changes to Amazon fees are largely focused on fulfillment, referral, storage, unit sales, and returns processing.

As an overview of the impact of these changes in Amazon fees, an average increase of $0.15 in fees per unit sold is to be expected by Amazon sellers. However, Amazon emphasizes that such an increase is “significantly less than other logistics providers.”

To further enlighten sellers on the changes in Amazon selling fees this year, here are some core fee adjustments to be implemented in 2024. 

Amazon Referral Fees Update for 2024  

Starting January 15, 2024, there will be some changes in Amazon referral fees for apparel products, while other referral fees will remain unchanged. Apparel products priced at a certain level will be updated.

• For items under $15, Amazon will reduce referral fees to 5% instead of 17%.
• For items between $15 and $20, Amazon will decrease referral fees to 10% instead of 17%.

As mentioned, referral fees for other Amazon products will remain unchanged. You may refer on the table below for the referral fees of specific Amazon categories:

Source: Adapted from Seller Central – “Referral fee rates,” Jan 24, 2024.

FBA Fulfillment Fees (Excluding Apparel)

On February 5th, 2024, the new granular rate cards for standard-sized products and large bulky & extra-large size tiers will take effect. Moreover, starting April 15th, 2024, FBA fulfillment fee rates for the aforementioned size tiers will be implemented. 

To better understand the FBA fulfillment fees in 2024, you may refer to the chart below. 

Source: Adapted from Seller Central – “Table 1. FBA fulfillment fees (excluding Apparel),” Jan 24, 2024.

Source: Adapted from Seller Central – “Table 2. FBA fulfillment fees (excluding Apparel),” Jan 24, 2024.

Source: Adapted from Seller Central – Table 3. FBA fulfillment fees (excluding Apparel),” Jan 24, 2024.

Inbound and Outbound Fee Changes

The new inbound placement service fee aligns with the changes in Amazon seller fees for 2024. Starting March 1st, 2024, there will be an inbound placement service fee for standard and Large Bulky-sized products. The standard-sized products will have an average fee of $0.27 per unit, whereas Large Bulky-sized products will have an average fee of $1.58 per unit.

The implementation of this inbound placement service fee will commence 45 days after the products are received. It means that Amazon will start charging sellers inbound placement fees on April 15th, 2024. For reference, you can check the table below.

Source: Adapted from Seller Central – “FBA inbound placement service fee,” Jan 24, 2024.

Source: Adapted from Seller Central – “FBA inbound placement service fee,” Jan 24, 2024.

To minimize or eliminate fees associated with inbound placement services, Amazon recommends opting for the “Discounted” FBA inbound placement service, provided your shipping plan meets the criteria. This choice will significantly reduce or completely eliminate fees for dispatching your inventory to various inbound locations within the Amazon network.

In relation to inbound fees, effective March 1, 2024, Amazon will introduce an inbound defect fee. This particular Amazon fee will cover shipments delivered to the wrong fulfillment center or deleted and abandoned shipments. The below outlines the per-unit inbound defect fee amount. 

Source: Adapted from Seller Central – “Inbound defect fees,” Jan 24, 2024.

For outbound products, sellers will also observe a reduced FBA fulfillment fee rate of $0.20 per unit for standard-sized products and $0.61 per unit for large bulky-sized products for large bulky-sized products. 

Another fee update relating to fulfillment fees includes a fulfillment fee discount ranging from $0.04 to $1.32, depending on item size and weight, for eligible products in the Ships in Product Packaging (SIPP) program. 

Accordingly, items certified as SIPP will automatically receive lowered FBA fulfillment fees on each certified unit shipped. You may refer to the table below for the allotted discount per SIPP-certified unit in 2024. 

Source: Adapted from Seller Central – Jan 24, 2024.

Inventory and Storage Fee Changes

Amazon recommends that sellers using Fulfillment by Amazon ensure they have a healthy inventory level to minimize order fulfillment costs, including shipping costs.

In an effort to promote healthy inventory levels among third-party sellers, Amazon is introducing a low-inventory-level fee for standard-sized products. As per Amazon, the new low-inventory-level fee “applies if you carry consistently low levels of inventory relative to unit sales.” The said fee is set to be implemented on April 1st, 2024, and for guidance may refer to the table below.

Source: Adapted from Seller Central – Jan 24, 2024.

In relation to storage fee updates, Amazon indicated that non-peak monthly storage for standard-size product fees will be reduced. Amazon FBA sellers can expect a non-peak monthly inventory storage fees reduction to an average of $0.09 per cubic foot, effective April 1st, 2024. On the other hand, monthly storage fees for non-standard sizes will remain unchanged. 

Furthermore, Amazon will also be introducing more granular fee tiers to the storage utilization surcharge primarily affecting professional sellers. 

Source: Adapted from Seller Central – Jan 24, 2024.

Amazon FBA Fees 2024 for Removal, Disposal and Liquidation

Starting February 5th, 2024, Amazon will implement changes to its removal and disposal order fees. It is worth noting that, for Amazon sellers who place removal or disposal orders before February 5, 2024 the new fees won’t apply. For reference, you can check the table below for the updated 2024 Amazon FBA removal and disposal fees: 

Source: Adapted from Seller Central – “FBA removal, disposal and liquidation order fee changes,” Jan 24, 2024.

Amazon Returns Processing Fee Updates

Starting June 1st, 2024, returns processing fee will be implemented for high-return rate products in all categories, except apparel and shoes. This Amazon fee update is intended to address operational costs and reduce waste. You may refer to the 2024 returns processing fee table below. 

Source: Adapted from Seller Central – “Returns processing fee,” Jan 24, 2024.

Final Thought

The upcoming Amazon fee changes are relatively minimal, but will definitely affect the average fees paid by sellers. It’s crucial to thoroughly assess these fee increases in the context of your profit margins. The use of Amazon seller tools like an Amazon FBA calculator and an Amazon repricer can prove invaluable in effectively navigating these changes.

On average, Amazon sellers prepare around $500 to $3,000 (USD) in order to launch their Amazon store and operate with substantial Amazon inventory. This is especially true for online sellers who chose to enroll in the Amazon FBA program.                      

Getting started with Amazon FBA also means being acquainted with the Amazon selling fees that accompany the Amazon seller program. For both newbie and tenured Amazon sellers, the Amazon FBA calculator is a helpful tool to calculate potential fees, costs, and profit. 

Amazon Fees Normally Shown by the FBA Calculator

The FBA profit calculator is limited when it comes to the data it takes into account and the output it forecasts. Amazon fees are calculated using the FBA calculator and include the referral fee, fulfillment fee, and variable closing fee.    

Since the Amazon FBA calculator is somewhat limited, Amazon sellers sometimes overlook other areas of the business that incur additional costs or the so-called Amazon hidden costs.    

If you wish to estimate your FBA Costs, CLICK HERE! 

Hidden Amazon Selling Fees You Should Know About | Amazon Hidden Costs

 Here are some of the Amazon fees dubbed by sellers as Amazon hidden costs on Amazon: 

Selling on Amazon Fees #1: Shipping Expenses

When discussing shipping expenses, you might immediately think about shipping costs or the fulfillment fee. However, the shipping expenses discussed here pertain to separate shipping expenses that most newbie sellers often forget about during the planning stage of their Amazon business.

Transporting your Amazon inventory products can be quite expensive, especially when sending your inventory items to multiple Amazon fulfillment centers. For that matter, it is important to choose your courier in relation to the number of shipped items.    

Top Amazon sellers avoid sending their voluminous inventory products via UPS to lessen the shipping costs. Experienced sellers rely either on less than truckload (LTL) or less than container (LCL) freight to reduce shipping expenses. 

Selling on Amazon Fees #2: Opening a Bank Account 

For those sellers not based in the United States, but selling on Amazon US, opening a US bank account is necessary. Alternatively, you can transfer money for the initial deposit and the monthly maintenance fees (for a premium account).

Similarly, foreign sellers will also have to set up a bank account or use online financial service platforms, like Payoneer or Paypal to pay Amazon as well as their suppliers based abroad. 

Regardless of the payment method, setting up bank accounts and online payment services will incur expenses in the form of maintenance, conversion, or transaction fees

Selling on Amazon Fees #3: Amazon Seller Tools Subscription

What makes the Amazon marketplace unique and highly preferred by online sellers is the array of seller tools available in the market. These tools help Amazon sellers to become more efficient and effective with their Amazon business strategies. 

Although Amazon provides free to use Amazon seller tools, like their Amazon repricer and FBA profit calculator, they have limited features as compared to subscription-based Amazon seller tools.

Subscription-based repricers for example offer better features and functionalities that help enhance the repricing strategy of Amazon sellers. Apart from a repricing tool, sellers may also benefit from other subscription-based seller tools such as feedback tools, PPC tools, and new product development and keyword research tools. 

Selling on Amazon Fees #4: Amazon Returns 

As mentioned, the Amazon FBA calculator has a limited scope. When it comes to returns and damaged goods, you cannot rely on the FBA revenue calculator.      

If you are new to Amazon, you should prepare for Amazon returns. 

For newbie sellers, it is important to take note of Amazon.com Returns Policy, especially that Amazon makes it easier for customers to make product returns. 

Selling on Amazon Fees #5: Brand Registry Expenses 

Another avenue that leads to expenses for Amazon sellers is the brand registry. Brand registry cost is among the factors not included within the FBA calculator. 

Generally, applying for the Amazon brand registry will not cost you. However, sellers will have to pay for one of its requirements, which is the trademark registration with the United States Patent and Trademark Office (USPTO). 

For trademark registration, there are two initial application filing options. The first option would be TEAS Plus, which would cost around $225 per class of goods/services. The second option would be TEAS Standard, costing $275 per class of goods/services. 

Selling on Amazon Fees #6: Advertising Expenses

After launching your Amazon product online, it is not enough to solely rely on organic search results. Regardless of your Amazon SEO, your competitors will likely be advertising on Amazon, either through Amazon Sponsored Products or Brands. 

If you wish to increase your Amazon sales, then an advertising campaign is a must. Such a process will cost you, depending on the type of ad campaign.

Some sellers even go beyond the usual PPC campaigns and Amazon product display ads. There are some aggressive Amazon sellers who run affiliate marketing programs and even create a landing page for their Amazon products. Hence, resulting in additional expenses. 

Selling on Amazon Fees #7: Overhead Expenses

Unlike traditional businesses, overhead expenses in eCommerce are minimal. However, they are still expenses that require payment.

Obviously, overhead expenses are not covered by the FBA revenue calculator. Hence, due diligence is necessary. 

Some of the common overhead expenses encountered by top Amazon sellers include professional product photography fee, seller’s permit (may vary per US State), intermediate warehouse costs (serves as a center for inspection and labeling of items before being sent to Amazon fulfillment center), business structure fees, and business operation & maintenance fees. 

Priceless Investment

Personal time is considered one of the most expensive resources involved in the Amazon business. If you are still a budding entrepreneur trying to make it big in Amazon, you will sacrifice personal time.

Attending seminars, learning new guidelines and ways of improving your business, participating in trade shows, and even coaching are some of the events that sellers spend time on. However, this is a priceless investment.

For Amazon FBA sellers to calculate the growth of their Amazon business and understand exactly what they are paying in fees, we’ve highlighted useful facts regarding Amazon referral fees and other Amazon FBA fees. 

Things Sellers Should Be Mindful of Regarding Amazon Referral Fees 

What are Amazon Referral Fees?  

Briefly stated on Amazon Seller Central’s help page, referral fees are fees that sellers pay on each item sold. Since Amazon plays a role in facilitating the transactional relationship between an Amazon seller and its buyer, it deducts a certain percentage of the total payment the seller receives. Hence, the referral fee. 

How Are Amazon Fees Calculated Along With Referral Fees?

The referral fees on Amazon follow certain criteria, depending on the category a product belongs to. The majority of the Amazon referral fees are calculated on a percentage basis, which will be discussed later.

In general, listed Amazon products are categorized into two, namely the Media and Non-Media Products. Any sale transaction made in both of these general categories is inclusive of Amazon referral fees. 

As per Amazon’s own statement, the company “deducts the greater of the applicable referral fee percentage or applicable per-item minimum referral fee calculated on the sale price” (total sales price for media products).

To give you an overview of how media and non-media product Amazon seller fees, along with the Amazon referral fee are calculated, below is a guide on how to calculate Amazon referral fee. 

How Is the Amazon Referral Fee Calculated? 

As previously mentioned, Amazon referral fees are calculated on a percentage basis. For example, the referral fee charge for an item is 15% and the item is priced around 100 USD, the calculation for the referral fee is – 

$100 x 15% (referral fee percentage) = $15 Amazon referral fee

And if by chance the product goes on sale during a particular day, Amazon calculates the referral fee of the $80 sale price, not the original $100 price.

$80 (sale price for the day) x 15%(referral fee percentage) = $12 Amazon referral fee.

What Are the Referral Fee Percentages?

When doing a Google search for the Amazon referral fee, sellers will normally see 15% as the usual referral fee percentage. However, new sellers should realize that the referral fee percentage for an Amazon product varies, depending on its category.  

The idea that 15% is the standard Amazon referral fee could perhaps be associated with the fact that the majority of the referral fee percentages are 15%. Notwithstanding the usual referral fee, there are other referral fee percentages based on the product category, even as low as 6% and a minimum fee of $0.30 minimum per item. 

Please refer to the image below for guidance on referral fee percentages. Worth noting US marketplace updated referral fees for 2020. 

Amazon Seller Central: A screenshot (cropped of) Amazon referral fees, Retrieved Aug. 28, 2020, From https://amzn.to/3lMH479

Can Referral Fees Be Reduced?

Strictly speaking, sellers cannot directly reduce referral fees. Amazon referral fees are compulsory, they cannot be avoided. Although the referral fees are unavoidable, sellers may be strategic about which items they sell on Amazon. With the help of the Amazon FBA calculator, sellers can choose certain items that can lead to reduced referral fees. 

Other Amazon FBA Fees and Selling Fees You Should Know

If you are a newbie Amazon seller or a tenured one wanting to refresh your knowledge about Amazon selling fees, here are some of the fees associated with Amazon FBA transactions. 

Amazon FBA Fees 

Fulfillment Fees 

Simply put, the FBA fulfillment fee refers to the flat fee that Amazon charges to FBA sellers for fulfilling their orders. Such a fee covers the order and weight handling of the item.

Sellers can calculate possible fulfillment fees using the revenue calculator provided by Amazon. Similarly, since dimensions and weight are critical components in calculating FBA fulfillment fees, sellers should also be familiar with its classification as seen in this Amazon Seller Central article. 

Monthly Inventory Storage Fees  

Since the Amazon FBA program requires sellers to deposit their products in the Amazon warehouse, Amazon charges sellers for the storage fee. If you are a new seller, you should know that the fees are based on two product size tiers, namely the standard-size and oversize. For the schedule of payment charge, it is between the 7th and 15th. 

As mentioned, storage fees are based on product size tiers and are charged by the cubic foot. Apart from the product size, storage fees also vary depending on the month of the year, as seen in the image underneath.   

Amazon Seller Central: A screenshot (cropped) of monthly inventory fees, Retrieved Aug. 28, 2020, from https://amzn.to/31C4vb7

Long-Term Storage Fees 

Concerning the Monthly Inventory Storage Fee, Amazon also charges a Long-Term Storage Fee for items stored in the warehouse for more than 365 days. The storage fee is $6.90 per cubic foot or $0.15 per unit, whichever is greater. 

To check which listing in Amazon inventory is about to be subjected to the long-term storage fee, sellers may simply check their Inventory Age or Inventory Health reports. Seller Snap seller analytics also includes these data points within the platform, which you can read more about here

Removal Order Fees

The FBA removal order fee is charged to sellers for the removal of inventory from the Amazon fulfillment center. Similar to the storage fee, removal fees also have their corresponding charges, depending on the size tier, shipping weight, or per unit fee. 

You may refer to the image below for guidance. 

Amazon Seller Central: A screenshot (cropped) of removal fees, Retrieved Aug. 28, 2020, from https://amzn.to/34FGge8

Returns Processing Fees

If a customer returns a product that was bought under one of Amazon’s categories that offers free returns shipping, the returns processing fee is charged to the seller. The usual categories that Amazon offers free returns shipping include; Apparel, Watches, Jewelry, Shoes, Handbags & Sunglasses, Luggage. 

The calculation for the returns processing fee is based on the total fulfillment fee for the given product. To be more specific, below is a clear illustration of how the fee is applied. 

Amazon Seller Central: A screenshot (cropped) of the application of returns processing fee charges, Retrieved Aug. 28, 2020, from https://amzn.to/2EFapiD

Unplanned Service Fees

An unplanned service fee is a type of fee that Amazon charges for any unplanned services in response to any compliance issue with an inventory’s packaging and preparation, shipping, and routing requirement. Simply stated, if your product arrives at the warehouse without proper labeling or preparation, Amazon provides those services on your behalf, while applying a per-item fee. 

In charging sellers for the unplanned services, Amazon created a table showing particular issues and their associated fees. Please check the image below for guidance. 

Amazon Seller Central: A screenshot (cropped) of unplanned service fee charges, Retrieved Aug. 28, 2020, from https://amzn.to/3jleRSH

Amazon FBA Preview Tools 

To assist sellers with their fee calculations and to give them a refined overview of the potential fee expenses, Amazon provides preview tools that sellers may utilize. Refer to the table below for details.  

Miscellaneous Service Fees

Apart from the Amazon referral fees and other Amazon FBA fees, other important miscellaneous service fees should be taken into consideration when calculating potential expenses in running an Amazon business.  

Although only a few sellers will have to pay for the succeeding fees, it is applicable to both Amazon FBA and FBM sellers. 

Closing Fees

If you are a seller whose niche items fall under media categories such as books, DVDs, music, software & video games, video, video game consoles, and video game accessories, Amazon charges a flat fee of $1.80 fee per item sold. Similar to Amazon referral fees, closing fees are deducted from sales proceeds. There is no need for sellers to make advance or scheduled payments.   

High-Volume Listing Fee

This listing fee should only concern Amazon sellers with more than 100,000 products listed. However, if you are interested in increasing your Amazon inventory and product listing, you will have to prepare a monthly flat fee of $0.005 per eligible ASIN. 

Unlike the Amazon referral fee which will be deducted during the purchase transaction, the high-volume listing fees are paid at the same time as the FBA storage fees. This particular fee is deducted either from the Amazon account balance of the seller or from the seller’s credit card. 

Refund Administration Fee     

This fee only applies when a shopper requests a refund for an item that you have already paid for. It is Amazon who will be issuing a refund to the buyer, and sellers will have to pay the refund processing fee of either $5.00 or 20% of the refunded charge, whichever is less. 

Knowing the Real Value 

If you are really serious about your Amazon business, you should know each detail of the business including fees. One way of staying in touch with your Amazon FBA venture is to understand the fees involved in every transaction you make. 

To supplement your understanding of the Amazon referral fees and other Amazon selling fees, you should also take advantage of Amazon seller tools for efficient business operations. 

Amazon seller tools like Amazon repricers, the Amazon FBA calculator and inventory management tools will help you understand the real value of your business.

The United Kingdom formally introduced the idea of a Digital Service Tax for Amazon UK seller through the published brief back in 2018. Entitled Budget 2018: Digital Service Tax, which detailed that digital companies will pay the tax that reflects the value derived from their UK consumers. 

What is the UK’s Digital Service Tax?

Digital Service Tax is something that is not only exclusive to the United Kingdom. It is worth noting that other countries, especially EU members, have either announced, proposed, revised, or even already implemented Digital Service Tax within their sovereignty.

The UK’s own DST is unique and separate from those being proposed or implemented by other countries. However, the main purpose remains the same, which is to levy against search engines, social media platforms, internet marketplaces, and eCommerce stores, including Amazon UK.    

How will the Amazon UK Marketplace be Affected by DST?

As mentioned above, the UK’s Digital Service Tax ensures that digital businesses pay taxes with respect to the value they derive from UK users. This serves a reason for increase of selling on Amazon UK fees. Since Amazon belongs to such a category, it is expected that the company will be taxed with a 2% rate on the revenue from the Amazon UK marketplace.   

It has been reported that the tech-giant has passed the cost along to its third-party sellers. Indicative of such a move, Amazon UK increased some fees by 2%. 

Which Amazon Fees Are Increasing Due to DST?

With its intention to pass the Digital Service Tax to Amazon sellers, Amazon will be increasing specific selling on Amazon UK fees. Starting September 1, 2020, the following Amazon fees will increase for the Amazon UK marketplace:

Amazon Referral Fees

The increase of the Amazon referral fee UK will be applied to all categories, which will also include the fee promotions for listings on the Amazon UK marketplace. The calculation will be percentage-based for “ordered product’s gross sales proceeds.”

In effect, current items with a referral fee of 15.0% are expected to increase up to 15.3%, and and shall be felt by Amazon seller UK starting its effectivity date. 

Amazon FBA Fulfillment Fees

Sellers using FBA to ship their items pay a flat fee depending on the type, dimensions, and weight of their items. The impact of UK Digital Service Tax will be felt by Amazon FBA sellers and Amazon seller UK on all envelopes and parcel sizes, including oversize for  Small and Light, Pan European FBA, domestic FBA, and Cross-border (European Fulfilment Network) parcels.

In effect, the usual current UK domestic rate of £2.27 for every parcel (standard parcel, less than 0.5 kg) will now increase to £2.32, starting the aforementioned effectivity date.  

Monthly FBA Storage Fees

Storage fees are calculated based on the amount of Amazon Warehouse space needed by the seller. With Amazon passing the impact of the DST to Amazon UK sellers, UK rates on all Amazon categories, standard size, oversize, low (January to September), and high (October to December) season rates will also increase. 

In effect, the current standard size storage rate of £0.65 per cubic foot per month will increase to £0.66 per cubic foot per month.

Multi-Channel Fulfilment (MCF) Fees

For MCF fees, which are charged to fulfill orders from other websites that utilize Amazon store inventory in their fulfillment centers, the increase will be felt through all UK rates for all envelopes and parcel sizes (including oversize). Inclusive with the rate hike would be parcels for domestic FBA, multichannel inventory (MCI), Pan European, and Cross-border (European Fulfilment Network) shipments. 

Parcels sent under the MCF method will be priced £4.08 from its current rate of £4.00 for the standard parcel, less than 0.5 kg. 

In Brief

Amazon’s rate increase on Fulfilment by Amazon (FBA) fees, Multi-Channel Fulfilment (MCF) fees, monthly FBA storage fees, and Amazon referral fees, will take effect starting September 1, 2020.

Worth noting also that changes to Amazon UK fees will not be applied retroactively, which means that storage fees will not be increased until the effective date.

To help Amazon UK sellers adjust smoothly with the changes, the use of Amazon seller tools, like the Amazon FBA calculator and Amazon repricers are highly encouraged. 

Read more about the fee increases in Seller Central here.

3 Types of Amazon Fees

1. Amazon Storage Fees

As the name suggests, these fees are charged for holding your inventory inside of an Amazon FBA warehouse. Amazon charges once a month based on the space your total inventory is taking up at that moment. The fees are charged per cubic foot (or meter) of space and they are different for 2 size categories: standard and oversize.  The fees also go up during the final three months of the year, since Amazon processes a lot more inventory during the holiday season.

There’s also an additional monthly charge of $0.15 per item per month if an item has spent a year or more in an FBA warehouse.

2. Amazon Fulfillment Fees

Amazon Fulfillment fees cover all the services Amazon provides moving your product inside the warehouse, handling the parcel, preparing it for shipping and sending it out. This fee is charged every time you make a sale. Depending on the size and weight of your item, it will be placed within 1 of the many fulfillment fee categories that each correspond to a fee bracket.

Fulfillment fees are also technically charged for handling returns, where in an event of a return of an item back into an FBA warehouse you’ll be charged the same amount as it was to fulfill the order in the first place. The only difference being that on the way back, the fee will be called a return processing fee.

3. Amazon Referral Fees

Amazon referral fees are also charged every time an item from your store has been sold. The fees are charged for having a listing and selling an item on Amazon. The fees are charged as a fixed percentage of the total selling price the customer has paid, in most cases that percentage is 15%. With the minimum referral fee being .30, meaning that if you’re selling an item for $1 you’d be paying .30 in referral fees instead of $0.15 which would be 15%.

How Much Do Those Amazon Fees Add Up To?

Let’s take a look at an example here, a set of silicone baking mats. Let’s calculate how much the seller of this item is paying in fees per every set of mats:  Now that we have an idea of how much fees can cost and how they are calculated, let’s look into some ways of reducing them.

Product Packaging Could Be Key

It’s obvious that the weight and the size of a packaged product unit has a substantial impact on how the fees are calculated by Amazon. It’s only natural to focus on that first if we’re to reduce our Amazon fees. Also if you manage to reduce the size or weight of your product you’ll save money on shipping as well. It’s like killing two birds with one stone.

Hint: Amazon Products Don’t Have To Work Like Retail Product Packaging

Whatever design you choose for your product packaging doesn’t have the burden of achieving the same effects that it would in a brick and mortar store. It doesn’t have to stand out on a rafter, it doesn’t have to entice someone to pick it up. That’s what your Amazon listing does! By the time your customer sees the packaging, the purchase has been made. You shouldn’t feel bad for trying to make adjustments to your packaging for the sake of reducing fees.

Use Compact Packaging

Try your best to keep Amazon product packaging as small as possible. Make sure you ask your supplier if there are any other options for packaging and examine them thoroughly. If your supplier doesn’t have any options that suit you, propose one yourself. See if you can move or bend your product around to fit differently than it is fitting now. Then measure it, and see if you can fall into a different fee bracket with that configuration.

Find Ways to Lighten Up

Looking into lighter packaging options for your Amazon products is an obvious route to explore. You should also look into making the product lighter as well, if possible. Maybe use a different material for some of the products you’re selling on Amazon. Or consider removing a feature that doesn’t seem to be relevant to buying preferences, based on your customer feedback.

Be Precise in Your Packaging

The dimensions of your product are measured by length, width, and girth. Amazon will put it into a straight-edged cardboard box. There’s no need to have any unorthodox packaging, such as flaps, bows or anything similar. Keep in mind that one of the products in each of your batches will be scanned by Amazon to check its dimensions. You don’t want any part of the packaging to go any further in any direction than it absolutely has to.

Relationship Between Amazon Fees and the Selling Price

Fulfillment fees are the only ones that change when you change your Amazon product price. It’s extremely important to keep that in mind. It’s true that you can’t do much about referral fees, being that they’re charged as a fixed percentage. However, if you change your perspective a bit by focusing on your margins rather than on fees, you might discover new ways of banking more profits. Let’s crunch some numbers to show how this works in action. We’ll go back to the silicone baking mat we looked at earlier:

As we can see above, the fact that all other Amazon fees remain fixed and the referral fee rises with the rise in price, the margins increase as well. The same is true if you wish to do a discount via a coupon or otherwise.  If you reduce your price by 60% you will pay 60% of the original referral fee, meaning that the strategy might not be as costly as you originally thought. Try split testing prices, or an Amazon repricing tool. Finding the balance between profits, fees and sales volume is a critical skill for an Amazon seller.

Bonus Fee Hack! The (Sort of) Secret Amazon Fee You Might Not Even Know About

Just now, we looked at increasing profits while keeping fees in check. If you’re selling on a foreign market, your earnings go through Amazon’s currency converter. That’s where you’re probably losing more money then you thought.  Sellers usually just accept that Amazon will convert their earning into the appropriate currency without giving it a second thought. What you don’t know is that Amazon is one of the higher conversion rates out there. Their rates go as high as 3.5-4.5% by some estimates. The percentage gets deducted from your earnings after all the fees have been charged. That means whatever your profit, Amazon will take an estimated 3.5-4.5% on top of that when you sell cross-border.

How to Avoid Paying High Exchange Fees?

The best way for an online seller to avoid Amazon’s FX fees is to arrange to have Amazon deposit your funds in the currency of the marketplace – without converting through the Amazon platform. You can do this through a global currency account for online sellers such as the one PingPong provides.  Using a global currency account would allow you to save up to 2-3% on average. You also have more power to control which currencies you hold, instead of being forced to convert your foreign payouts into US dollars by Amazon. This is especially useful when paying European VATs and Canadian GSTs. Using a global currency account, you can make VAT payments without additional fees – while completely avoiding the dreaded double currency exchange that usually takes place before paying foreign taxes like VATs and GSTs.  Online sellers can also run into currency exchange fees when paying international suppliers. If you’re negotiating prices in your supplier’s local currency, which is often recommended, you’ll then have to find a way to safely pay your supplier and convert the payment into local currency. Going to your regular bank to make international wire payments gets expensive because banks aren’t known for giving the best rates.  A global currency account like the one from PingPong can also help you with supplier payments. Once you set up your account, you’ll be able to hold multiple foreign currencies. When you do need to convert currency, you can do it at a great low rate.

Curious to see how the rate you’re paying compares? Learn more about global currency accounts for online sellers.

Luckily this year there is some good news about listings that have been with Amazon for more than 365 days.

New US FBA Inventory Storage Fees

Types of fees being changed:

1. Long-term storage
2. Minimum long-term storage
3. Monthly inventory storage

In regards to long-term FBA storage fees, Amazon sellers will no longer pay for items* that are in fulfillment centers for 181-365 days. But beware of the fee once items hit the 365-day mark.

*Note Multi-Channel Fulfillment program is also affected by this change.

Amazon will reduce the minimum long-term FBA storage fees for items in the fulfillment center for more than 365 days to $0.15 (from $0.50). This is a big saving for those items, although we hope your inventory doesn’t last that long.

Important Notes:

• Items in fulfillment centers longer than 365 days are subject to either the minimum long-term storage fee (per unit) or long-term storage fee (charged per cubic foot), whichever is greater.
• In order to avoid fees, the removal order must be submitted before the cleanup date. While you are waiting for the inventory to be removed or disposed of, it is still available for sale if in sellable condition.
• All of these fees are in addition to monthly FBA storage fees
• These fees do not affect: FBA Small and Light AND Inventory Placement Services.

Which ASINs are affected?

To determine which ASINs in your inventory fall into the new structure, you can use the Inventory Age and Inventory Health and compare it against your Seller Snap listing page by adding your Inventory Age columns. If you do not know how to add columns you can view our knowledge base here.

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