With the start of the new year, Amazon is once again announcing a series of fee changes for FBA (Fulfillment by Amazon) sellers in 2024. The first adjustments will take effect as early as February, and you can find the most important changes and possible alternatives in this blog article.
Table of contents
An overview of the most important fee changes:
Domestic shipping in Germany remains stable
Good news for domestic sellers in Germany - the fees for domestic shipping by Amazon remain unchanged. Unfortunately, this does not apply to all countries, such as the United Kingdom, the Netherlands, Sweden, Poland and Belgium, where from February 5, 2024 higher domestic shipping fees will apply.
Storage fees for standard size decrease
For all standard size items (excluding dangerous goods), storage fees for FBA sellers will decrease from March 1, 2024. While this means a cost saving for storage costs, sellers should expect additional costs in certain storage contexts as Amazon aims to optimize inventory levels.
Additional charges in the storage area
In order to optimize stock levels, Amazon is making some changes to the storage fees. In particular, these apply to old stock in the warehouse when shipped by Amazon. From February 15, sellers will have to pay over 90 euros per cubic meter per month for storage periods between 271 and 365 days. The storage time up to the surcharge for storage use for shipping by Amazon will be reduced from 26 to 22 weeks, and additional costs will be incurred from the 22nd week. From 1 June new time intervals for warehouse utilization will also apply, with specific mark-up costs, excluding stock with a storage time between 0 and 30 days and products in the clothing, shoes and bags categories.
From April 1, FBA sellers who use the Pan-European shipping program through Amazon will also have to pay additional fees for low inventory. This fee is based on the weight of the products and is calculated using historical stock levels.
Advantages for oversized products in pan-European shipping
From July 1, 2024 the surcharge for the sale of oversized products in pan-European shipping (in France, Spain, Italy and Germany) will no longer apply, provided that the country of sale and destination are identical. In addition, the discount for shipping products in their original packaging without additional outer packaging is now available in the UK, Germany, France, Italy and Spain.
In the article by Revoic you will find further information and sample calculations on the topic.
As every year, there are some adjustments to consider, prices rise and fall and the regulations that Amazon Fulfillment users have to adhere to are not without their challenges. Last year, we already addressed the question: Is Fulfillment by Amazon still worth it - or should FBA sellers consider switching to Fulfillment by Merchant (FBM)? We have compared the advantages and disadvantages of the FBM alternative for you.
FBA or FBM?
FBM or Fulfillment by Merchant simply means handling logistics via the merchant themselves or a third-party provider instead of via Amazon. As most retailers lack experience with logistics and simply have too little time for such an extensive task, many opt for the second alternative: processing via an external fulfillment service provider.
So what advantages does FBM offer?
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- Cost savings: If you opt for an external fulfillment provider, you can use their flexibility and adjust your contract as required. Your storage space grows and shrinks with your company, depending on current requirements.
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- No FBA requirements: As a Fulfillment by Merchant (FBM), you don't have to worry about the constantly changing and often unannounced requirements from Amazon for FBA sellers. The rapid policy changes often leave merchants little room for maneuver to switch over in time. When selecting your fulfillment service provider, you can define clear rules from the outset and benefit from a personal exchange.
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- Everything at a glance: You can control the logistics yourself, get an overview of the most common reasons for returns and receive valuable customer feedback that you can use to sustainably improve your business.
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- Brand presence: Another advantage of FBM is that you can design the packaging according to your own ideas. For Amazon customers, FBA sellers are no different from each other. The dominant brand is Amazon. With FBM, you have the freedom to use your own packaging to strengthen your brand image, be it through an individual design, small goodies or sustainable packaging. Your product is therefore not just one of many and can stand out from the competition.
Disadvantages of FBM
Of course, the FBM variant also has its disadvantages.
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- Not automatically qualified for Prime: Unlike FBA sellers, FBA sellers do not receive immediate access to Prime. In order to meet the high expectations of fast delivery on the part of customers, it is crucial to find the right logistics provider.
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- Finding the right partner: If you don't want to sit on your parcels alone, you first need to find the right partner. Without expertise, this search can quickly become very frustrating and time-consuming. Conveniently, we have a network of over 1,000 partners, so we can find the right one for you.
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- Returns handling: The management of returns is not handled by Amazon, so FBM sellers need to implement an effective returns policy and clear communication for smooth returns. A customer portal can help with this.
Conclusion
There is no one-size-fits-all for all companies. Especially if you only serve low margins, FBM is a more attractive solution than FBA - because: Depending on the product category of your SKUs, FBA costs can be relatively high. But there are also other options, whether pre-FBA, Seller-Fulfilled-Prime (SFP) or FBM. No matter how you decide, we have a suitable solution for you.
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