To reflect the changing costs of fulfillment, transportation and customer service, as well as to align with recent industry standard changes such as dimensional (DIM) weight pricing changes – Amazon.com will be adjusting certain fees for its Fulfillment by Amazon (FBA) program. If large-but-light items are part of your Amazon FBA product line, here’s what you should be prepared for in 2015.
The Impact of DIM Weight Pricing on FBA Fees
DIM weight pricing is based on package size instead of weight. Designed to help shipping carriers cover their increasing costs, this pricing model encourages e-commerce sellers to consider more compact and cost-effective methods of packaging. This pricing approach keeps shipping costs lower because carriers have the space to load more packages per truck. One way for e-commerce sellers to reduce DIM costs is to consider packaging alternatives like envelopes that can make the size of their shipments smaller.
For large, standard-sized, non-media units weighing more than 1 lb., as well as for all small, medium and large over-sized units, Amazon will use dimensional weight to determine both Fulfillment Fees and optional inventory placement service fees in all cases where the dimensional weight is greater than the unit weight. Effective February 18, Pick & Pack and Weight Handling Fees will be increasing across all product sizes and weights. The fee changes are still pending and will vary per product. As reported by Amazon, a significant portion of the products fulfilled by its marketplace are large standard-sized packages weighing 1 pound or less, for which the total Fulfillment fee increase will be 10 cents.
Other FBA Fee Changes
Here are some other adjustments to the FBA program’s fees:
- Monthly Storage fees. Coming March 1, these fees will increase for standard-sized goods from $0.48 per cubic foot to $0.51 per cubic foot for January – September and from $0.64 per cubic foot to $0.68 per cubic foot for October – December. For over-sized units, these fees will decrease from $0.48 per cubic foot to $0.40 per cubic foot for January – September and from $0.64 per cubic foot to $0.53 per cubic foot for October – December. It’s wise to keep in mind that Amazon frequently instructs sellers to break up shipments of FBA products for amounts less than a full pallet, so you could find yourself paying more at multiple fulfillment centers, not to mention the headaches around extra packaging and shipping.
- Long Term Storage fees. Another change that will most likely have a significant impact on fees paid by FBA merchants is the updated Long Term Storage Fee. Formerly, “long-term” was considered to be at least 12 months; it is now redefined as 6 months. The new charge for Long-Term Storage is $11.25 per cubic foot for inventory stocked between 6 – 12 months, and $22.50 for items stocked 12 months or longer (no change). This increase in fees will take effect on August 15 and will continue to be assessed semi-annually.
The Bottom Line
To avoid being hit with higher fees in response to DIM, pay special attention to your packaging choices, such as finding smaller boxes or using envelopes and download Stamps.com’s DIM guide for more information and tips. The good news for Amazon FBA sellers? Order Handling, Zero-Fee Fulfillment, Multi-Channel Fulfillment and FBA Prep Service fees will remain the same for 2015.