Another Amazon fee increase is about to take effect! Sellers: Keep costs

Compared with the current situation where the market conditions are unlikely to improve in the short term, Amazon sellers are even more helpless about the sharp increase in fees on the platform this year.

If consumers can increase their consumption frequency and the cross-border e-commerce market can become popular again, the increase in Amazon fees will not have much impact on sellers. But now, the market and the platform are putting sellers under great pressure. With repeated fee increases, sellers are also having a hard time.

Amazon will increase several fees in 2023

Recently, Amazon's UK and Japan sites have announced that they will increase multi-channel fulfillment ( MCF) fees , which will take effect as early as April .

Prior to this, Amazon Europe also issued a notice on "changing the volumetric weight of FBA products" , indicating that Amazon will determine the size grading of Amazon Logistics Europe's integrated services, European distribution network, multi-channel distribution fees and buyer return processing fees based on the size and unit weight of the packaged products.

I can’t count how many times the fees have been raised. Taking FBA as an example, this year Amazon has made a number of adjustments to the FBA logistics fees for third-party sellers .

In the coming months , FBA outbound fees, off-peak storage fees, inventory turnover surcharges, extra-long storage surcharges within 180 to 270 days, and inventory removal and handling fees will be added.

1. FBA delivery fee

FBA outbound rates will increase by an average of $0.22. In addition, starting February 16, 2023, the minimum threshold for the size and weight of large items in the apparel category will increase.

2. Off-peak storage fees

Amazon will increase monthly off-peak and peak storage fees for standard-size products as follows:

Off-peak ( January to September): $0.04 per cubic foot increase.

Peak period ( October to December): $0.20 per cubic foot increase for non-distributed networks.

3. Inventory turnover surcharge

On April 1, 2023, Amazon will also add a new inventory turnover surcharge, which is the ratio of the number of goods shipped out each week in the near future to the existing inventory quantity. If the ratio is too high, an inventory turnover surcharge will be charged, which will affect approximately 8% of sellers with slower inventory turnover.

4. Long-term storage surcharge

In 2023, Amazon will increase the long-term storage fees it charges for products that are stored in Amazon FBA warehouses between 271 and 365 days.

Starting from April 15, 2023, Amazon will introduce an aging storage surcharge, which will be charged for products that have been stored in Amazon FBA warehouses for 180 to 270 days. This fee does not apply to categories such as clothing, shoes, bags, jewelry and watches.

5. Inventory removal and handling fees

Moving into 2023, Amazon will increase removal and handling fees, but liquidation fees will not change.

Amazon did not simply raise all fees; perhaps to appease sellers, or perhaps to recover costs elsewhere, some fees were lowered .

1. Return processing fees for clothing and footwear

Amazon will reduce the processing fees for returned items for apparel and footwear by an average of $0.20 per returned item .

2. Fuel and inflation surcharges , small and light commodity fees

Currently, Amazon has eliminated fuel and inflation surcharges, and has also reduced FBA fees for the following small and light items.

Although some fees have been reduced, the rising fees are obviously higher. Generally speaking, sellers will choose to raise product prices to cope with rising costs in order to maintain profits, but at present, many sellers said that they dare not even think about raising prices .

Amazon fees have been rising repeatedly, sellers: just keep costs

Regarding Amazon's frequent fee increases, some sellers said :

" It's okay. I'm numb now . "

" We still have to control costs this year, and I estimate that fees will have to increase . "

" The price goes up several times a year, which really makes me lose my temper . I might as well just give it a quick payout. "

In order to revitalize revenue data, Amazon has included cost reduction and efficiency improvement in its corporate development strategy. In terms of "cost reduction", Amazon laid off employees, shut down logistics and other facilities, and delayed the development of new sites; in terms of "efficiency improvement", it charged higher Amazon third-party sellers service fees.

What makes sellers feel stressed is not only the sharp increase in costs caused by various fees, but also the more intense market competition. Instead of raising prices, competitors have even started to lower prices. "If the enemy does not move, I will not move. If the enemy moves, I still dare not move." In order to make the sales data look less ugly, sellers said that they "really dare not raise prices."

Many sellers also smiled bitterly :

"Go ahead and roll it up, roll it up as hard as you can, and really make the market move. I'll be responsible for lying down."

"It would be good if we can just keep the cost, at least we can cover the FBA fee."

“When the market stops moving, the volume becomes even greater,” a seller told Ennet.

According to the seller, the sales of his store began to fall sharply from the beginning of last year, but it was the off-season and he did not adjust his development strategy in time. He thought that the second half of the year would usher in the peak season, so he expanded his team and launched some new hot-selling products in previous years. However, during the peak season, sales did not improve. Although the year-end peak season is still the peak sales node of the year, compared with the previous year, its sales have dropped by more than 3 times.

Even many listed cross-border e-commerce giants avoided the question when asked about their recent order volume on investor platforms, saying that the recent period is the off-season for cross-border e-commerce and their main focus is on product selection and prototyping.

The most direct problem caused by the decline in orders is excess inventory. In this regard, the seller said that unsaleable inventory is more fatal than no orders, and the disposal fee is shamefully high .

In a market full of uncertainty, some sellers said they have lost their judgment on stocking inventory because there is no reference inventory level. If they stock too much, they are afraid that the products will be unsold, and if they stock too little, they are afraid that they will be out of stock .

At this time, sellers still have to face copycat sales every day.

Some sellers reported that their products were in high demand and had good sales, so it was not uncommon for them to be copied. Some even shamelessly copied their products for two or three years. Since it was too costly and time-consuming to catch the copycats, they never took it seriously. But since the second half of last year, the number of copycats suddenly increased, and their own store sales plummeted, while the copycats' sales soared.

Some sellers said that after launching their products on the US site, even if they used all means to prevent plagiarism, such as transparency plans, brand filing, patent registration, etc., they still could not avoid being copied.

In addition to dealing with these troubles, sellers on the European site also have a headache about its compliance requirements, such as packaging laws, European regulatory authorities, product safety laws ... There are more and more compliance requirements. Some sellers say that the European site is simply a typical example of a lot of work with little money.

Although consumers are indeed tightening their belts and the market is relatively negative, it is certain that cross-border e-commerce is still a market with huge growth. However, how to leverage the growth of orders is still an unsolved problem for most sellers.

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