Uncategorised
As of March 1st, 2024, Amazon has introduced a new fee called the Inbound Placement Service Fee for sellers who use Fulfillment by Amazon (FBA). This fee impacts both standard-sized and large bulky products.
What is the Inbound Placement Service Fee?
Amazon is implementing this fee to cover the cost of strategically placing inventory within their fulfillment network. By storing products closer to customers, Amazon aims to achieve faster delivery times and potentially lower overall shipping costs.
Fee Details:
– Standard-sized products: Approximately **$0.27 per unit**¹.
– Large bulky products: Approximately **$1.58 per unit**¹.
Grace Period:
While the fees technically began on March 1st, Amazon won’t start collecting them until April 15th, 2024. Sellers have a 45-day window to adjust their FBA strategy accordingly.
Strategies to Minimize Impact:
1. Fulfillment by Merchant (FBM): Consider using FBA for only a portion of your inventory and fulfilling the rest yourself (FBM). This approach gives you more control over storage and potentially reduces fees.
2. Strategic Inventory Placement: Utilize Amazon’s tools to strategically choose which fulfillment centers to send your inventory to. This can help get your products closer to your target markets and potentially reduce inbound fees.
Remember that faster deliveries can lead to higher customer satisfaction and potentially more sales. Understanding the fees and adjusting your FBA strategy accordingly is key to navigating this change in Amazon’s fee structure. Stay informed and adapt to the evolving e-commerce landscape! 📦🌐
The first thing you should do, if you have not already, is head to your Fulfilled by Amazon settings and make your choice for your preferred method.
Go to Settings > Fulfillment by Amazon
On this page, hit Edit on the Inbound Settings block
Select the best option for your business
Tips to Minimize the New 2024 FBA Inbound Placement Service Fee
Tip #1: Break your shipments out by standard and oversize items before you create a shipment in Amazon or other third party softwares like Inventory Lab.
Amazon has said that if you create a shipping plan with a combination of standard-size items, non-standard-size items (for example, large bulky), or special handling categories like Hazmat or Dangerous goods, they will direct your inventory to more than one inbound location, even if you select the Minimal Shipment Splits Option for inbound placement. Which will mean the Minimal shipment splits rate will still apply to each shipment in the shipping plan, even if directed to more than one location.
To get around this, do not include large items, dangerous goods, shoes or clothing in a standard sized shipment. Create separate shipments for those items.
Tip #2 Pay more attention while sourcing to your item’s size and the potential fee.
In the Amazon seller app, you can click to add the fee while you are sourcing to see if the item makes money, should you have to pay the fee. To do this navigate to the profit screen in your Amazon seller app. Click on the “Fulfillment Fees” bar. Toggle on “Inventory Placement” and hit save updates. Unfortunately, there is currently no way to save this so it scans for every item and it is a manual process.
Tip #3: Avoid sending to the West Coast if you can help it.
With the new 2024 FBA inbound placement service fee, Amazon has said that shipments sent to the western area of the United States will see higher fees. To avoid this, opt for the Amazon-optimized shipment splits or if you are going to choose either partial shipment splits or minimal shipment splits, select a location other than “West”.
Tip #4: FBM more of your stock
With FBM there are no additional fees making it a great alternative to listing a few oversized or bulky items or items considered hazmat. Clothing and shoes are also super simple to FBM and you have more control over the returns and customer damages.