Amazon's new policy takes effect, sellers are wailing

It has been three days since Amazon’s warehousing configuration service fee came into effect, and sellers’ feedback has been surprisingly consistent: they could just grab the money directly, but they had to set up another name for it.

In general, Amazon's warehouse configuration service fee has caused sellers' costs to rise sharply. Some sellers complained that the money they earned from selling a box of goods was not enough to cover the warehouse configuration service fee for this box of goods. Other sellers calculated that because of this fee, their annual costs would increase by 200,000 to 300,000 yuan.

New Fees Take Effect, Seller Costs Soar

Amazon's warehouse placement service fee is the cost Amazon incurs when it helps sellers transfer inventory to fulfillment centers closer to consumers. This fee will take effect on March 1, 2024.

Amazon's warehouse distribution problem has been around since last year. Fundamentally, distributed inventory is designed to achieve fast delivery. This prevents inventory from being concentrated in one warehouse. When shipping to more distant locations, it takes a long time to ship, affecting the customer's purchasing experience.

To some extent, this is beneficial to both the platform and the sellers.

However, this method seems to be ineffective, so Amazon has come up with a new idea of ​​"warehouse configuration service fee". From the current point of view, if you want to waive the warehouse configuration service fee, the number of warehouses must be greater than four.

In the past, Amazon transferred goods from popular warehouses across long distances for sellers, which was time-consuming and costly. Now, with warehouses across the United States, sellers can directly deliver goods to suitable warehouses, and the platform will then make short-distance transfers, which is efficient and saves money.

Sellers don’t want to have warehouses across the US? It’s not impossible, but you need to pay. According to sellers’ feedback, currently if the number of warehouses is ≤ 4, you need to pay, and the fees are not small.

It is also worth noting that if the seller insists on increasing the number of warehouses to more than 4, although he does not have to pay the warehousing configuration service fee, the cost of the first leg will increase again.

One seller made this calculation:

If the average monthly shipment is 50 tons, and the freight is calculated at 4 yuan per kilogram, the freight will be 200,000 yuan.

After the warehousing configuration fee is paid:

If only one warehouse is sent (Eastern US warehouse): 8 yuan per kilogram + 6 yuan for warehouse configuration fee (spread the freight cost equally) = 14 yuan, and the total freight cost is 900,000 yuan.

If shipped to three warehouses in the West Coast of the United States: 4 yuan per kilogram + 3 yuan for warehouse configuration fee = 7 yuan, the total freight is 350,000 yuan.

If the goods are shipped to 5 warehouses (including the West Coast of the US, the East Coast of the US and the Central America), the warehousing configuration fee is 0, and if calculated at an average of 9 yuan per kilogram, the freight will be 450,000 yuan.

It can be seen that regardless of whether the seller has separate warehouses or the number of separate warehouses is greater than 4, the logistics costs have increased. It is precisely because of this that Amazon has been badly criticized by sellers these days: "I am really convinced", "Amazon you are really black", "Is this policy really reasonable?"

Sellers are hurt and Amazon is being criticized

From the current perspective, if the seller only sends out 3 items in total, even if one warehouse is divided into one box, it is not enough to divide into 4 warehouses. If you want to waive the warehousing configuration fee, you must divide it into at least 5 warehouses. Even if each warehouse only has 100KG, it adds up to half a ton. Only big sellers can handle this amount of goods, and small and medium-sized sellers will have a headache.

In addition, under the policy of warehouse configuration fees, sellers of low-value products and small items are also very uncomfortable. For example, a seller of jewelry will receive a warehouse configuration service fee of US$200 or US$300 for a box of 1,000 items. The profit of small items is limited. Can such a business still be done?

One seller said helplessly: "Is it possible that the configuration fee for low-value products is higher than the product cost?"

Although we don't know if this situation exists, we have observed that a seller who created a shipment recently said that he was charged $45 for a box of goods, but in reality, he couldn't make $45 from selling a box of goods. He definitely lost money to ship the goods.

Therefore, many sellers now say that they can no longer operate on Amazon. Once the warehousing and configuration fees come into effect, the last bit of profit of small sellers has been squeezed out.

One seller said bluntly: "Amazon is really a dog now. When you sell goods, the platform eats up most of the fees. Sellers have a hard time even making a living. The delivery period is restricted, and high advertising fees are charged when the goods are sold. If the goods cannot be sold, they have to clear the inventory. It costs money from head to toe."

In addition to the above problems, the seller also found the following slots in the past few days of use:

1. Forced one warehouse. Some sellers reported that Amazon forced one warehouse directly when they shipped, and there was no other option. It is worth noting that one warehouse also has to pay a warehouse configuration fee, and the fee is relatively expensive.

Second, the warehouse division is chaotic. Some sellers said that the number of their warehouses starts from 5, and they are all small warehouses, and most of them are warehouses that cannot be delivered by Kapai.

3. Large-scale warehouse division. One seller claimed that he had 300 pieces of goods in 86 cartons and had 10 pieces of goods opened in total.

4. For many addresses in the US East and US Central, very few are allocated to the US West. It should be noted that the storage configuration fee for the US West is higher than that for the US Central and US East.

5. If four boxes are sent, they will not be divided into four warehouses. Only when more than 5 boxes are sent will there be a "no configuration service fee" option.

The wool comes from the pig, is the price increase expected?

Under the influence of the storage configuration fee, there is a strong call for price increase. However, this may not be easy to implement for three main reasons:

First, Temu is currently eyeing the US, and the risk of sellers raising prices is very high. On the other hand, the current inflationary pressure on US residents still exists, and they are particularly sensitive to prices. If sellers raise prices at this time, they may not buy it. Third, there is a serious internal competition at present, and platform sellers are all engaged in price wars, so it is difficult to raise prices.

If this road is blocked, then look for another way. Therefore, some sellers say that they can hope that the freight forwarder will adjust the minimum delivery volume and increase the small warehouse route. However, these adjustments take time, and the seller's sales cannot wait. So are there any other alternatives now?

According to Amazon, if sellers use its warehousing and distribution services, they do not need to pay the warehousing configuration service fee.

However, according to the feedback from sellers, there are also many problems.

First of all, the cost of using AGL services will be much higher than sellers using third-party logistics. An Amazon seller told Ennet that compared with the two, AGL will be 30% to 50% more expensive.

Secondly, it is not that you can be exempted from the warehouse configuration fee by using AGL, but you can only be exempted from the warehouse configuration fee by using the AMP plan with a high ocean freight unit price. You can also choose a lower freight unit price but pay the configuration fee. If you choose the East Coast warehouse, this fee may be discounted. In this case, if the ASIN warehouse configuration fee is high, then AMP has an advantage. If the freight unit price has no advantage and you still have to pay the configuration fee, then AGL has no advantage.

In addition, regarding the AMP plan, a seller found that the cost of building a shipment a few days ago was only $1,000, but after March 1, AGL+AMP, the cost became $1,500. "It was agreed that the warehouse configuration fee would not be included, so what is the $500 price difference? Moreover, the original AGL quotation already included the transportation fee." The seller said angrily.

Amazon warehousing configuration service fee