If you’re an Amazon seller, you’ve probably heard about peak season increases to Amazon’s FBA services. However, few sellers go through the exercise of understanding how much the increased costs will impact their margins.
Will your products still be profitable? Let’s dive into it and find out.
Peak Season Fees
Here’s a breakdown of the typical peak season fees and the potential impact to your margins.
FBA Storage Fees
Beginning October 1, storage rate increases will vary from $0.84 to $2.64 (150% to 267% increases) per cubic foot, depending on the sizes and classification of your products.
The storage rates will return to non-peak prices at the start of the new year.
FBA Fulfillment Fees
Beginning October 15, fulfillment rate increases for your Amazon orders will vary from as little as $0.19 per unit to as much as $12.08 (3.8% to 16.3% increases).
For those of you that use Amazon Multi-Channel Fulfillment (MCF), most shipping rates will increase between $0.19 to $8.51 for 1-unit orders.
Fulfillment rates will return to normal on January 15, 2025.
Manual Processing Surcharge
On November 1, surcharges for not providing box content information for your inbound shipments will increase to $0.30 per unit, which is a 100% increase over the non-peak rate of $0.15 per unit. Shipments that are manually processed may be received more slowly than shipments with box content information.
This surcharge will return to the normal rate in January 2025.
Advertising Costs
With the increased amount of shoppers during the holiday season, it’s very typical for sellers to increase advertising budgets and set their bids even more competitively. Of course, there’s no way to definitively understand how large the impact will be, but it’s still worth mentioning. Be sure to keep an eye on your bids, budgets and performance metrics so you can manage them appropriately.
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The Takeaway
Amazon’s FBA fees are set to increase significantly during the upcoming peak season. Storage rates, fulfillment fees, and manual processing surcharges will all rise (not to mention advertising costs), potentially impacting sellers’ profitability.
Here are some actions you can take to be better prepared.
- Evaluate Margins and Pricing: Calculate the potential impact of these fee increases on your product margins. Consider adjusting your product prices to offset the increased costs.
- Optimize Inventory: Manage your inventory levels carefully to minimize storage fees.
- Monitor Performance: Track the impact of any changes you make, such as price increases and ad campaign bids/budgets, to ensure you’re achieving the desired results.
By proactively addressing these changes, you can better manage your costs and profitability during the peak season.
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