Fulfillment by Amazon (FBA) has made life much easier for sellers. However, the service has become so popular that Amazon is now running out of space in its “fulfillment centers.” In 2015, the amount of inventory in Amazon warehouses grew by 50 percent, but much of this merchandise remained in fulfillment centers into 2016. To combat the problem in the face of an influx of merchandise before the holidays, Amazon will be increasing FBA fees.
When Will Increased Pricing Take Effect?
Luckily, you have some time before premium prices take effect. Although Amazon announced the news on May 18, storage fees will only change in the last quarter of this year. This is intended to encourage merchants to push for more sales and to only use Amazon warehouses for items that are likely to sell.
Price Changes
In October, expect to see lower fees than last year: 54 cents per cubic foot for standard-size products and 43 cents per cubic foot for oversize products — the same as for January to September. This pricing model rewards sellers who shift inventory before Christmas and free up space in warehouses for more merchandise.
Prices will increase in November and December to more than double what they were last year. Expect to pay $2.25 for standard-size and $1.15 for oversize items per cubic foot. In 2015, prices were just 72 cents and 57 cents, respectively.
To offset the higher costs, Amazon will be lowering weight handling fees (outbound fees) during these same two months. For some items, the difference is minor — you’ll pay just 3 cents less in weight handling fees for items of 1 pound or under. However, cost reductions are significant for larger items — more than $1 for items over 2 pounds.
There will be no change to order handling fees nor Pick & Pack fulfillment fees, except for clothing, which will incur an additional 40 cents per item for Pick & Pack.
Who Will the Prices Impact?
Although FBA is available in every country with an Amazon marketplace, pricing changes are only applicable in the US. This means international sellers with merchandise in US fulfillment centers will see a price hike, but US sellers with merchandise abroad will be able to avoid higher costs.
Start analyzing how you use fulfillment centers now to avoid lost profits on unsold items later in the year. Calculate how prices will affect you by checking out the charts on Amazon.com.
