Effective today! Major changes to Amazon FBA warehouse distribution policy

Sellers, please note that Amazon’s warehouse distribution policy will be adjusted again today!

In March 2024, Amazon added a new warehousing configuration service fee for US FBA and provided three warehouse options:

Minimum shipment splitting: Goods are concentrated as much as possible and sent to a single location, which is more expensive;

Partial shipment splitting: The goods are distributed to 2-3 locations, and the cost is relatively low;

Amazon Optimized Shipment Split: Distribute your products to multiple locations at no charge.

On February 20, 2025, that is, today, sellers will usher in the latest changes to Amazon’s warehouse distribution policy.

Amazon's latest adjustment to its warehouse distribution policy

According to an announcement released by Amazon, starting from February 20, 2025, the platform will update the standard size Amazon Logistics (FBA) warehousing configuration options.

It is understood that the new regulations cancel the "partial shipment splitting" option for standard-size goods, and only retain the two modes of "Amazon optimized shipment splitting" and "minimum shipment splitting".

Simply put, Amazon is going to cut one of the original three delivery modes, leaving only two options: either distribute the goods to more warehouses according to Amazon's algorithm requirements, or pay more to have fewer warehouses.

According to Amazon's official announcement, after the new regulations are implemented, if sellers choose "Amazon optimized shipment splitting", they must ensure that each product (SKU) contains at least 5 cartons or pallets of the same specifications, and the product combination and quantity in each container are exactly the same, only then can the warehousing configuration service fee be waived.

A senior seller compared it to a supermarket suddenly requiring suppliers to fill five shelves with goods in order to be exempt from the admission fee, otherwise they would have to pay extra to put up one shelf.

Take the example of a seller of water cups. If the seller wants to put 100 cups and cup lids in each box, then all five boxes must maintain this configuration and cannot change at all.

The minimum shipment splitting does not have any carton or pallet packaging requirements. Sellers can send inventory to a single warehouse in their area and pay the corresponding warehousing configuration fee. This option is suitable for sellers with many SKUs and smaller shipment volumes.

It is worth noting that the delivery method for large and bulky items has not changed, and relevant sellers can still choose the "partial shipment split" option.

What is the impact on sellers?

From the platform's perspective, the new policy can effectively improve the operating efficiency of the distribution network, thereby enhancing consumer satisfaction, but it is obviously not good news for sellers.

Industry insiders analyzed that due to the impact of the new policy, the cost pressure of small and medium-sized sellers may increase sharply, but it will have almost no impact on large sellers.

After the FBA warehouse distribution policy was adjusted, the core contradiction was that a considerable number of small and medium-sized sellers previously needed to rely on the "partial shipment splitting" (distributing to 2-3 warehouses) option to balance costs.

After the new regulations are implemented, if the stringent requirements of "optimizing cargo splitting" cannot be met , the corresponding warehousing configuration fee will need to be paid, and the seller's logistics costs will increase significantly.

For example, many small and medium-sized sellers of the distribution type (multi-SKU) may be forced to choose the "minimum split" due to inconsistent product combinations, and some small and medium-sized sellers testing new products will also pay additional warehousing configuration fees because the shipment volume is less than 5 boxes.

On the other hand, some sellers pointed out that in the past, goods were usually distributed to four operation centers, but now "Amazon's optimized shipment splitting" requires at least five warehouses to be covered, which may lead to a sharp increase in the complexity of the first-leg logistics. Previously, some sellers reported that the warehouse splitting caused delays in warehousing, triggering defect fees.

What's more troublesome is that the multi-warehouse stocking model will place higher demands on sellers' sales forecasts, and once there is a risk of unsold goods, it is likely to further erode profits.

In addition, some sellers may forcibly increase the single shipment volume in order to meet the 5-box condition. Doing so will not only occupy more working capital, but also disrupt future operating rhythms.

For sellers of large items who can still choose to "split part of the shipment", they can rely on their strong supply chain advantages to concentrate resources to seize the market. By then, a group of small and medium-sized sellers may be squeezed out due to logistics costs.

A small and medium-sized seller said bluntly: "The new regulations not only failed to bring convenience, but also added a lot of trouble, especially for seasonal products, which are likely to face the risk of out-of-stock due to the extended stocking cycle."

Some sellers also believe that although Amazon claims that the new regulations are aimed at improving logistics efficiency, in fact the platform is shifting cost pressures to sellers through the rules.

This is because the new warehouse distribution rules further tilt the decision-making power of warehouse distribution towards Amazon, and sellers need to adapt to the logistics network driven by the platform algorithm. For example, the system may distribute the seller's shipment to a remote warehouse to reduce platform costs, but increase the seller's final delivery fee.

How should sellers respond?

Faced with the aggressive new regulations on warehouse division, many sellers must have begun to feel anxious.

But what is going to happen will happen, and what sellers need to do now is to find ways to minimize the impact of the new regulations on their business.

First, sellers should calculate the total cost difference (including first-leg freight, warehousing configuration fees, storage fees, etc.) between "optimized shipment splitting" and "minimum shipment splitting" based on historical shipping data .

If the shipment volume of a single SKU is stable and meets the "5 identical packages" condition, the "optimized split" option is given priority; if the SKUs are scattered or the shipment volume is insufficient, it is necessary to evaluate the profit margin under the "minimum split" mode.

For small and medium-sized sellers, they can consider streamlining the SKU structure, merging similar products or eliminating inefficient SKUs. They can also use data analysis tools to predict regional demand and prepare stocks in specific warehouses to avoid the risk of unsold products in multiple warehouses.

Finally, small and medium-sized sellers can also consider turning to overseas warehouses as buffer nodes and flexibly replenishing stocks based on FBA inventory consumption to avoid differences in warehousing time and defect fees caused by separate warehouses.

In general, although this adjustment has a negative impact on the majority of small and medium-sized sellers, there are ways to break the deadlock. In this case, sellers who can quickly adapt to the rule changes and make adjustments will stand out in future competition.

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