Amazon announces its new fee schedule regularly every single year, and this year Amazon went out of its way to introduce new fees that may impact some Amazon businesses. Most of the updates took effect from January 17, 2023, and will apply to all inventory inbound to Amazon FBA Centers in the U.S. So if you are a brand new seller starting today or plan to start in 2023, read this article and understand all the fees associated with your business.
This article explains all the fees and gives you a few quick tips on preparing yourself for the new Amazon coming in the following days.
There was a bit of good news from this new update, the biggest one being that referral fees will not change right now. Referral fees are the commission that you pay Amazon every time you sell a product on their platform. As of now, those fees will remain unchanged till next year, so that is an excellent thing for everyone.
Small & Light Program Fees
Small and light pricing is going from $10.00 to $12.00, which is a win for small and light sellers in 2023. This will help you offset the ever-increasing cost of goods with inflation, shipping, and all that other stuff.
New Selection Program Fees
This is a program that Amazon has where it wants to invite you to bring new products and sell them on Amazon FBA. When you do that, they cut you a break in the form of a rebate. In 2023 you can see a rebate increase for the FBA new selection program.
Apparel & Shoe Return Fees
Finally, that last piece of good news goes to the clothing and shoe sellers, if you get a clothing or shoe return in 2023, the return processing fees are reduced by an average of $0.20 per return. That will help you increase your bottom line a little bit.
Fuel Inflation & Surcharge
Due to expected economic changes, Amazon introduced a fuel and inflation surcharge as a temporary measure. However, these changes did not go away as anticipated, and now amazon will adjust the fuel and inflation surcharge into FBA fees to reflect these cost increases. So, there is no separate fuel and inflation surcharge.
FBA Fees Structure
Amazon decided to make the new fee schedule more granular. Amazon has executed the following changes:
1. Your outbound FBA fee will now increase by an average of $0.22.
2. You will see an increase in removal and disposal fees in 2023 as well by 10%. Six-month long-term storage fees are back again.
3. Amazon will increase the peak monthly storage fee (October-December) by $0.20 per cubic foot for oversized products while remaining unchanged for standard inventory. Off-peak storage fee (January-September) will rise for standard-size inventory by $0.04 per cubic foot and over-sized inventory by $0.03 per cubic foot.
4. The surcharges for aged inventory will increase by $4 per cubic foot (excluding clothing, shoes, jewelry, bags, and watches) for inventory stored for more than six months from April 2023.
5. Amazon created a new fee for 2023 called “storage utilization surcharge.” This is an additional fee for storing more products than you sell at Amazon warehouses.
6. Amazon FBA Fulfillment fee for dangerous goods (also known as hazardous materials or hazmat) has also increased.
Amazon stated the following changes in their fees schedule, 2023,
“As we near the end of the year, we would like to thank you for your continued partnership. We started 2022 expecting a return to normalcy as COVID-19 restrictions eased, but fuel prices and inflationary pressure presented further challenges, some COVID-19-related challenges persisted, and we have seen recessionary concerns arise in many places around the world. Despite these challenges, you have persevered and demonstrated tremendous agility, and together, we have served customers well.
We continue to invest in people, technology, transportation, and infrastructure to innovate on behalf of our selling partners. We do this while also working to be more efficient and manage our costs to serve you and customers, so we can provide an amazing service that is also a great value. Today, we would like to share the updates we are making to our U.S. referral and Fulfillment by Amazon (FBA) fees that will take effect on January 17, 2023, except where otherwise noted.
- Referral fees will remain unchanged. These fees provide sellers with traffic from hundreds of millions of customers, an attractive shopping experience for customers, payment processing, fraud prevention, and much more. We will remove the following fee categories: Collectible Coins, Entertainment Collectibles, Sports Collectibles, and Collectible Cards. Impacted ASINs will be re-categorized to their most suitable product category, which may result in different (some lower, some higher) fees for those re-categorized products. For more information, please visit: Fee Category definitions.
- Earlier this year, we introduced a Fuel & Inflation Surcharge for our FBA fees for what we believed may only be temporary cost increases. These cost increases have not attenuated as quickly as we had hoped, so we will adjust our standard FBA fee rates to account for these increased costs and we will remove the separate Fuel & Inflation Surcharge at this time. These changes are reflected in the below summary.
- This year, we saw some sellers use more of our storage than we expected or believe was needed to serve customers well, and that constrained how much product from other sellers could be sent into FBA. As a result, we will make updates and create additional granularity in our FBA fees that continue to better align fees with our underlying costs. This will drive improved inventory health, more efficient use of our storage, and create more capacity for sellers who are using space efficiently. For more information, please visit: 2023 U.S. Fulfillment by Amazon fee changes and 2023 Storage fee changes. This include seven areas:
- We will increase FBA outbound fee rates by $0.22, on average, which is below fee increases announced by other fulfillment and logistics providers. As part of this, we will introduce more granular weight tiers for FBA outbound fees (at the quarter and half pound level) to better align fees with shipping costs.
- For Apparel products, we will use the greater of unit weight or dimensional weight to determine the shipping weight for all large standard-size products. This is similar to the change we made in 2022 whereby we extended dimensional weight to all large standard-size products below 12 ounces, except Apparel. This change will take effect on February 16, 2023.
- We will reduce the returns processing fee rates for customer-returned products in the Apparel and Shoes categories by an average of $0.20 per return.
- We will increase the monthly off-peak storage fee (January to September) for standard-size products by $0.04 per cubic foot and oversized products by $0.03 per cubic foot. We will increase Peak storage fees (October to December) for our non-sortable network by $0.20 per cubic foot, while those for our sortable network will remain unchanged.
- We will introduce a storage utilization surcharge for sellers who have a high cube of inventory stored in our fulfillment centers relative to the cube of their recent weekly sales. We estimate this will impact approximately 7.5% of sellers who use the highest volume of storage relative to their sales volume. This change will take effect on April 1, 2023.
- We will increase the surcharges applied to inventory stored between 271-365 days. Additionally, we will introduce aged inventory surcharges on inventory stored between 180-270 days, excluding products in the following categories: Apparel, Shoes, Bags, Jewelry, and Watches. These changes will take effect for the April 15, 2023 aged inventory assessment date. We encourage you to check your aged inventory and take action on these products. These changes will help drive more efficient use of our storage and create more capacity for sellers who are using space efficiently.
- We will increase removal and disposal fees driven by increased costs of these services. Liquidation fees will remain unchanged. To learn how to configure your settings for automated liquidations or removals, go to remove inventory automatically.
- We will lower fees for the U.S. FBA New Selection program. We will increase the rebate on sales for eligible new-to-FBA parent ASINs from 5% to 10% on average, increase the number of units eligible, and extend the time period of eligibility for certain benefits within the program. The rebate will still be applied for sellers who meet specific criteria. For more information, please visit: FBA New Selection.
- We will reduce fees by expanding the Small and Light Program and increasing the item price for eligible products from $10-or-less to $12-or-less, enabling sellers to realize the program’s lower fees for more of their selection. For more information, please visit: 2023 FBA Small and Light fee changes.
These changes are designed to allow us to collectively better serve customers while ensuring that we continue to provide you with a great value relative to alternatives. On average, these fee changes are below those announced so far by other logistics providers. In addition, Amazon’s fulfillment fees will remain an average of 30% less expensive than standard-shipping methods offered by other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.
The 2023 Amazon fee changes are comparatively minimal. Since Amazon is concerned about products stored at warehouses and increased the most fees on storage, it’s time to examine your inventory and profit margin. Considering your performance on Amazon and implementing strategies to increase profit can be overwhelming for sellers. Many Amazon seller tools are available to help you calculate your sales and profit margin, and you can use them for additional support.