Navigating 2024 Amazon Fee Changes: What Sellers Need to Know

New Amazon Fees in 2024

Amazon has recently announced updates to its fee structure for 2024, stating they “aim to balance the needs of sellers who use its fulfillment services with the operational costs associated with maintaining a robust and efficient marketplace.” These changes come into effect at various dates throughout the year, bringing both adjustments and new opportunities ahead for sellers. 

You can read Amazon’s explanation of its new fee structure here. To summarize, we’ve broken down the key updates sellers need to know below.

1. Inbound Placement Service Fee:

Amazon is introducing a new fee for standard and large bulky-sized products to cover the cost of distributing inventory closer to customers. Sellers can opt for reduced or waived fees by choosing single or multiple shipment locations. This change takes effect on March 1, 2024.

2. FBA Fulfillment Fee Reductions:

Fulfillment fees for standard-sized products will see an average decrease of $0.20 per unit, and for large bulky-sized products, a reduction of $0.61 per unit, starting April 15, 2024.

3. Ships in Product Packaging (SIPP) Program:

A fulfillment fee discount ranging from $0.04 to $1.32 will be offered for eligible products in the SIPP program, encouraging cost savings through existing packaging. This change is effective from February 5, 2024.

4. Low-Inventory-Level Fee:

The one everyone is talking about, this new fee is for standard-sized products and will be implemented for consistently low inventory levels, starting April 1, 2024. Sellers can avoid this fee by maintaining more than four weeks of inventory relative to sales. This fee is commonplace for big retailers like Target and Walmart, referred to as a “Fill Rate.” If a supplier falls short and doesn’t deliver the full amount specified in the PO, retailers may impose penalties for the unfilled portion. For smaller businesses and sellers, though, this type of fee will likely be unfamiliar territory. 

5. Monthly Storage Fee Reduction:

Non-peak monthly storage fees for standard-size products will decrease by an average of $0.09 per cubic foot from April 1, 2024, allowing sellers to carry sufficient inventory.

6. Reduced Referral Fees: 

Reduced referral fees for apparel products priced below $20, effective January 15, 2024. 

Updated Services and Benefits

In addition to new and revised fees, Amazon will also be updating several of its services and benefits.

1. 1. Amazon Vine Program: Amazon Vine’s program will use a new, lower pricing structure for products enrolled on or after October 19, 2023.
      • US FBA New Selection Program: Expanded benefits for the US FBA New Selection program, including rebates and eligibility expansions, starting March 1, 2024.
   2. Supply Chain by Amazon: Updated rates and benefits for Supply Chain by Amazon, including new discounts for auto-replenished products.

Additional Fee Updates

Among the changes made, there will also be revisions to a slew of various fees, alongside the introduction of a new returns processing fee. 

1. Annual Updates: There will be annual updates to various fees, including Storage Utilization Surcharge, Removal, Disposal, Aged Inventory, Prep, Inbound Defect fees, and outbound fees.
2. Returns Processing Fee: Introduction of a returns processing fee for high return-rate products (excluding apparel and shoes) from June 1, 2024.

All in all, Amazon says its new fees are designed to encourage sellers to “use its services in a way that’s good for everyone: faster deliveries for customers and efficient use of space in its fulfillment centers.” The revised fee structure encourages sellers to consider both the logistical advantages of being close to customers and the costs associated with managing inventory.