Wednesday, December 16, 2015

Amazon Increasing FBA Fees In February - Not Such a Big Deal Except Inexpensive Items

Amazon has announced that effective February 18th, they are increasing fees for FBA (fulfillment by Amazon).

 "We are adjusting our rates for the Fulfillment by Amazon (FBA) service in the U.S. to reflect the changing costs of fulfillment, transportation, storage, and customer service."

Fulfillment Fees

When you take a look at the the examples of fee increases, they are not terribly significant but as always, every little bit matters.

The Amazon FBA fee calculator now gives you the option of comparing what your fees are now relative to after February 18th.  Let's take some examples:

Here's our favorite, iPads:

What's the difference?  $0.01!  If that is affecting your margins, you have a serious problem.  Unfortunately not every category is like that.

Let's take a TV:

Here the difference is $0.22.  Still not a big deal at all.  If you sell at $1,000 the difference is still $0.22.

Ok, but here is where it actually does matter, inexpensive toys and other items.

When you sell this Dump Truck toy at $17, the extra fees are $0.35. That is a big deal.  That's 2% of the sale price.  Most likely you bought this for $6 or less.  That's over 5% of your margin.  A big deal.

If you sell the same toy for $13.99, it's the same $0.35.  That's an even bigger deal since you probably bought it for $2.  That's over 15% of your margins.

Storage fees 

Storage fees are increasing as well starting in March.  Here is the chart:

 Most of my stuff never gets to 30 days so this shouldn't affect me much but it's good to know about.

Bottom line: Fees from Amazon are increasing.  For expensive items, it doesn't seem to matter much, but it is a big deal for cheap items.  Be aware.