August 18, 2022

2022 Amazon FBA Fees Increase – What you should know

Amazon FBA fees have been increased. As a business owner, you need to know the cost of running your business. Learn all you need to know about the increase in Amazon FBA fees.
2022 Amazon FBA Fees Increase – What you should know
2022 Amazon FBA Fees Increase – What you should know

Selling on Amazon FBA comes with numerous benefits. For one, Amazon FBA makes you eligible to sell to over 200 million Prime members who are willing to pay more for faster delivery. You also don’t have to worry about paying for a storage facility or handling any shipping logistics. 


Fulfillment by Amazon(FBA) helps you handle order fulfillment and logistics while you focus on how to generate more income for your business. 


The numerous benefits do come at a cost. In fact, Amazon has announced an increase in FBA fees in 2022. 


So what are these Amazon FBA fee increases? Read on as we give you a breakdown of these fees, so you can effectively create a working budget, sell with fulfillment by Amazon and increase company sales. 


Changes to Amazon FBA fees in 2022

Amazon FBA fees will increase across the various fee categories in 2022 - fulfillment fees, storage fees, removal and disposal fees, referral fees and other additional fees.

Amazon Fulfillment Fees

One of the biggest tasks for any Amazon FBA Seller is handling orders and shipping products to customers. This can be time-consuming especially when there is an increase in Amazon sales and your business begins to expand. This is where the FBA service comes in. Apart from storing your products, Amazon helps you pick and pack up your products in fulfillment centers. They also ship these products to your customers. This means you can have the time to handle other aspects of your business. 

However, Amazon charges a fee for handling and shipping your products. These fees are mostly based on the weight of the product. 

Fulfillment fee changes in 2022

In 2022, Amazon is increasing fulfillment fees on all products from January 18, 2022. Here are a few changes in fulfillment fees for all items: 


  • All fulfillment fees are increasing at an average of about 5% with a spread from 1.9% to 8.1% depending on the size tier. 
  • Small standard-sized items will see an 8.1% increase regardless of weight 
  • Large standard items will see a 2% increase for lighter products and a 7.9% increase for the heaviest items. 



FBA Fulfillment fees for Apparel 

The fulfillment fees for the apparel category will be charged based on the size tier in the standard category. Oversized size tiers for apparel will also see a similar increase to that of the core fulfillment fees. 



FBA Fulfillment fees for dangerous goods 

Fulfillment fees for dangerous goods will also experience a similar increase and will be charged based on the size tier of the items. 


FBA Small and Light standard items  

For Amazon sellers who are utilizing the Small and Light program, it is important to take note of a few new changes. 


From January 18, 2022, the FBA Small and Light program will increase the weight limit from 12oz to 3lb and introduce 4 new weight tiers. 


For the existing small standard weight tiers, there will be an 8% increase for a weight tier of 6oz or less. For the 6+ to 12oz weight tier, there will be a 0% increase. 


For the existing large standard weight tiers, there will be a 7% increase for items with a weight tier of 6oz or less. For items with a 6+ to 12 oz weight tier, there will be a 7% increase. 




Storage fees 

One of the many benefits of using Amazon FBA is that you don’t have to store your inventory. This is beneficial, especially if you don’t have a space to store a large number of items. What’s more, you don’t need to pay to rent out a large storage facility. All you need to do is send your inventory to Amazon and have them store it for you. You can also have your supplier ship your products to Amazon directly. Of course, to get these benefits, you will need to pay for them. 


Storage fee changes in 2022

From February 1, 2022, monthly storage inventory fees will increase. Here’s a breakdown of what these fees will look like:

  • For standard-sized items, there will be an increase of $0.08 per cubic foot
  • For oversized items, there will be an increase of $0.05 per cubic foot


      


Amazon surcharge for aged inventory 

Amazon will be introducing a new surcharge for inventory stored within 271-365 days starting March 15th, 2022. The surcharges go as follows: 

  • A $1.50 per cubic foot monthly charge on the 15th (this is for units stored 271-365 days).
  • A $6.90 per cubic foot or $0.15 per unit monthly charge on the 15th for units stored for more than 365 days. (This remains the same as 2021)


Amazon FBA removal and disposal fees 

When an item is not sellable, Amazon sends the item back to the seller to dispose of. The cost charged when Amazon sends those items back is called Removal fees. 

On the other hand, Disposal fees are the fees charged by Amazon, to destroy items that are unsellable for the seller.  

In 2022, removal and disposal fees will see an increase of more than double the previous price. 

Here's a breakdown in the table below: 



Amazon referral fees 

Amazon is one of the largest ecommerce sites in the world. It has a large customer base, giving you access to a huge number of potential customers. When you sell a product on Amazon, they collect a profit. This is Amazon’s commission for letting you sell on their platform. These few varies depending on the product category. The referral fee is based on the total sales price including the price of the item and the price of shipping and gift wrapping. 

Amazon has only announced a change in referral fees for snow throwers and lawnmowers. There will be a reduction in referral fees, from 15% to 8%. However, this only applies to items that cost greater than $500. 

If you belong to other categories, your referral fees stay the same. Here are a few referral fee charges for various categories on Amazon: 


  • Books: 15%
  • Consumer Electronics: 8%
  • Camera and Photo: 8%
  • Home & Garden: 15%
  • Kitchen: 15%
  • Office Products: 15%
  • Toys & Games: 15%
  • Electronics Accessories: 15% (for the portion of the sales price under $100) and 8% (for the portion of the sales price over $100).
  • Beauty: 8% for products with a sales price under $100 and 15% for products with a sales price over $100.

Additional fees 

There are a few other additional fees you need to put in mind while creating your budget for 2022: 


  • FBA manual processing fee: The FBA manual processing fee is charged when a seller does not provide box content information. If this happens, you should expect these fees: January to October - $0.15 per unit and from November to December - $0.30 per unit. To avoid being charged this fee, it is important to supply data about the contents of your ship box to your local fulfillment center.
  • Inventory placement service fee: Amazon offers the inventory placement service which allows you to send all eligible inventory to one receiving center. This will then be spread across several fulfillment centers, giving your product a better spread. For standard items of less than 1lb or less, the charge is $0.30 per item. For items of 1-2lb - $0.40. For standard items of over 2lb, you will be charged $0.40 plus an extra $0.10. For oversized items of 5lb or less, you will be charged $1.30 while oversized items of over 5lb will be at a rate of $1.30 plus an extra $0.20. 
  • Return processing fee: Lots of items purchased during the holiday period have an extended return period until January 31st, 2022. While return processing fees are free for most categories, it is important to keep an eye on the fees, if your product does not fall under such category. 
  • Inbound services fee: This is the cost of having Amazon’s partnered carriers - UPS and FedEx, ship your product within the US to Amazon. While these fees are not set, they are usually an average of $0.30 per unit. 


It is also important to consider the taxes you will pay on your earnings on Amazon. 

What can you do about the FBA price increase?

 the FBA price increase

 

The Amazon FBA fees increase will significantly affect sellers, lowering their profit margins. While there is no way to bypass these fees, you can reduce their impact on your business. Here are a few ways you can do that: 


  • Ensure you measure and record the right product dimensions accurately. You don’t want Amazon to charge you extra thinking your product is larger or heavier than it is. 
  • Amazon charges fees for preparing products for shipping. You can prepare all your products before sending them to Amazon fulfillment centers to cut down costs. However, ensure they are properly labeled to avoid them being sent back. You might want to get an Amazon expert to help you label your products according to standards. 
  • Maximize your storage by taking out items that have stayed too long and are contributing extra costs. Do all you can to ensure that your inventory moves out of the store as quickly as possible. 
  • You might also want to consider FBM ( Fulfillment by Merchant) for some items like slow-moving items or heavy items, to avoid extra charges and bypass the FBA fees. 

Conclusion 

At the end of the day, your goal is to make a profit selling on Amazon. Knowing the expected costs will help you create a working budget and help you make smart choices. 


Hopefully, this article gives you an idea of the changes to come. If you have any questions or you need professional help tracking which products are profitable to increase your profit margins, you can speak to an expert on ePlaybooks right away. 


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