Last weekend, the Amazon official public website released a piece of big news about 2022 US referral and FBA fee changes.
The increase of the FBA fee is late but here! What is the most significant impact of this change in logistics fees on sellers? Which kind of sellers are most “injured”? Today to explain to you in detail.
Anyway, Amazon sellers may still be barely acceptable if the service keeps up when the fee increases. However, many sellers said that the recent FBA shelf efficiency and service levels are maddening and exposed several pitfalls to Amazon devil warehouse.
3 things you must know
01 The considerable increase in FBA price, which is more than twice the last year!
In this 2,000-word-long article, Amazon can be said to have taken great pains first to spend half of the paper doing the groundwork, telling the story of the massive human and financial resources Amazon has invested to cope with the impact of the epidemic and to serve 200,000 new sellers. It is also said to bear billions of dollars of cost increases on behalf of sellers. Then came to the most significant concern about the cost.
FBA changes
- An average of 5.2% will increase distribution rates to reflect rising operating costs.
2. Amazon will use the greater unit or dimensional weight to determine the shipping weight for all large standard-size units. Small standard-size teams will use the unit weight.
3. Amazon will increase removal and disposal fees based on changing costs. Clearance fees will remain the same and will be lower than removal or disposal service fees.
4. Starting February 1, 2022, off-peak monthly inventory storage fees (January-September) will be increased by $0.08 per cubic foot for standard-size products and $0.05 per cubic foot for oversize products. This change will first be reflected in March 2022 charges for storage that occur in February 2022.
FBA fees are adjusted every year, but the average 5.2% increase in delivery rates is high this time! The average increase in delivery rates in March this year was 2-3%, a staggering before and after comparison. This policy immediately led to the discontent of Amazon sellers! In a survey for the official article, a whopping 93% of sellers expressed dissatisfaction with the fee adjustment, which was too large an increase.
02 Removal fees up to 172%; Under the new change, these two types of sellers are the most “injured.”
The most affected by this FBA price increase are the sellers who do large and light small items.
For sellers who sell the volumetric product, how much have costs gone up? For example, the actual weight of a product is 0.73 pounds, and the volume weight is 1.05 pounds. According to the previous policy, products within 0.75 pounds are charged according to the actual weight, so the FBA fee is 3.64. With the new policy in place, the FBA fee will be based on the greater one of actual weight and volumetric weight, which is 1.05 pounds, so the updated fee of 5.14 is a 41% cost increase!
In response, these sellers complained that they had several products that weighed less than 0.75 pounds, and now they all have to be charged by volume; Amazon is a blatant money grab!
In addition, another much-criticized part of this adjustment for sellers is the doubling of removal and abandonment fees! For example, for large items from 1.0 to 2.0 pounds, the associated fee increase is a whopping 172%!
As we all know, the performance of Amazon Q3 this year is not very satisfactory. Q4 is estimated to be even 0 profit. In the face of pressure from all sides, Amazon decided to increase the FBA fees significantly and transfer the cost to the sellers. The matter has come to this: sellers, in addition to price increases, seem to find a better way to balance the rising costs.
03 Warehouses that will make pop-ups unsaleable
They say you get what you pay for, but the quality of Amazon’s service and price increases are not proportional. After promulgating this new policy, some sellers immediately complained that FBA fees were getting more expensive. Still, the service is getting worse, the shelves are getting slower and slower, and they often send the wrong goods to the customer!
Looking back at past sale seasons, whoever wins the logistics inventory gets a head start, and in this year’s climate, even more so. Therefore, Amazon sellers preparing for Black Friday and Net 1 are praying that their goods will be delivered on time and the shelves smoothly. However, recently, sellers generally reported that FBA shelving efficiency is very low. Some sellers have even run into FBA’s “Death Warehouse” and missed out on this year’s peak season!
Choose an alternative
Amazon FBA logistics costs have risen sharply, and the pressure on sellers’ fees and expenses has increased a lot, and profits are being compressed. Want to save costs? Optimizing the logistics channel can be said to be the seller’s first choice.
Perhaps it would be wise to abandon the US warehouse, choose a Chinese warehouse, and ship directly from China.
eComhub.net can ensure our warehouse’s security and working efficiency, and we can offer the best logistics options. In a climate where logistics costs are soaring, you can save as much money as possible.
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