Amazon US Referral, FBA & Multi-Channel Fulfillment Fee Changes 2020

Amazon implemented changes to their US referral, FBA, and multi-channel fees on February 18, 2020. Changes to Multi-Channel Fulfillment fees took effect on April 1, 2020. Also, COVID-19 has prompted Amazon to waive certain fees. Read on for details about the changes and how they could impact your business.  

Amazon’s statement regarding these changes:

"Driven by FREE One-Day Delivery, this was the largest one-year investment we have ever made in FBA. Nevertheless, in 2020, we will make only moderate increases (about 3%) in fulfillment fees, below industry average, because we remain committed to your continued success. We will also decrease select referral fees and introduce an exciting new selection program."

In other words, Amazon is introducing fee increases to manage the costs of their One-Day Delivery program, while incentivizing new product launches and decreasing some referral fees. Below you’ll find an overview of these changes and how they might affect you as an Amazon Seller. 

COVID-19 Impacts on FBA

Due to the impact of COVID-19, Amazon is waiving two weeks of inventory storage fees. April 15th long-term storage fees have also been waived as Amazon pauses removal operations in some fulfillment centers and is otherwise delayed in completing removal requests. 

US Referral Fee Changes

The following referral fee changes took effect on February 18, 2020:

  • Shoes, Handbags & Sunglasses will see a referral fee reduction from 18% to 15% for products with a total sales price greater than $75. 
  • Outdoor furniture is now consolidated into the Furniture category, which means a reduced referral fee (from 15% to 10%) on any portion of the total sales price above $200.
  • Personal care appliances are now part of the Health & Personal Care category, meaning lowered referral fees (8% instead of 15%) for sale prices $10 or less. 
  • Activewear is now charged the 17% referral fee of Clothing & Accessories rather than the 15% of Sports & Outdoors.
  • Ring accessories are now placed under the Amazon Device Accessories category with a 45% referral fee.
  • Amazon Business has discontinued the tiered fee structure and one referral fee rate per category will be charged regardless of price. Click here for the current Selling on Amazon fee schedule.

US FBA Fulfillment Fee Changes

Of most note in these changes is that small standard, large standard, and medium oversized products have received a fee increase. 

FBA Fee Changes for Monthly Storage, Label Service & Removal Orders

  • Monthly Storage Fees: Effective with the April 2020 charges, Monthly FBA inventory storage fees for standard-size units will increase by $0.06 per cubic foot. Storage fees for oversize items will remain the same.
  • Optional FBA Label Service: The fee for the optional FBA Label Service will increase from $0.20 to $0.30/unit.
    For FBA Small & Light, the fee will be $0.10/unit.
  • FBA Removal Order Fees: Removal order fees will now be charged by the weight-band.
  • FBA Disposal Order Fees: Disposal order fees will now be charged by the weight-band.

FBA Small & Light Fee Changes

  • Consolidating to a single per-unit fulfillment fee by weight
  • $0.10 per unit FBA Label Service fee
  • No LTSF fees for Small & Light units in fulfillment centers for 181-365 days
  • Effective Feb. 15, 2020, all standard FBA storage fees (including LTSF fees) will apply to Small & Light units (reduces the per-unit fee from $0.50 to $0.15)
  • Standard Removal and Disposal Order fees will be charged for Small & Light units 

FBA New Selection Program

A recent introduction from Amazon is the FBA New Selection program for FBA sellers as of April 1, 2020. This program is designed to incentivize sellers to expand their catalog by listing new items. Opting in to the FBA New Selection program qualifies sellers for free monthly storage, free removals, and free return processing on eligible and freshly launched ASINs in FBA. Participants new to FBA can also qualify for a $100 discount on Amazon Partnered Carrier shipping. For a more comprehensive breakdown of the program, check out this article from our friends over at eComEngine.

US Multi-Channel Fulfillment Fee Changes

As of April 1, 2020, you’ll find reduced rates for expedited 2-day shipping, up to 30% depending on size tier. There are also reduced rates for standard shipping and new size tiers for standard and expedited shipping.

What This Means for Sellers

The fee changes this year are a mixed bag of increases and reductions coupled with some fee waivers brought on by COVID-19. The impact to sellers will vary depending on your selling categories, fulfillment methods, and plans for catalog expansion. Currently, FBA shipments are delayed and inbound shipments have also experienced delays. As such, sellers should be looking at building out your FBM network if possible.  

In these hectic times for Amazon sellers, it’s more vital than ever to ensure your current margin calculations are correct and that your specific offerings (products, categories, and fulfillment methods) are still profitable. Keep up with announcements of new programs and program changes so you can adapt and make the right moves to sustain your business objectives and future needs.

Good luck sellers, and stay well.

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