February brought winter storms, underwhelming Superbowl, and 30 ‘Happy Valentine’ cards waiting on my desk to be assembled for my son’s kindergarten class.
Excitement all around.
And just like Q1 brings tax related tortures, Amazon brings annual change in FBA fees this time of the year. 2019 fees changes will go into effect on February 15th (storage fees ) and February 19th (referral and fulfillment), 2019.
If you use FBA program and these changes are news to you – don’t worry. I will just pull the band-aid off and give you a summary of changes in a human (non-Amazon) language in this article.
To emphasize: if you do your own fulfillment these changes do not affect you.
1. FBA fulfillment fees
These are fees that are taken from each order, and usually are most impactful (assuming proper inventory forecasting).
Our take: Biggest impact will be to items in 10 oz – 20 lbs unit weight. While oversize items have higher absolute dollar number increase oversize items also tend to be higher priced, which makes it easier to absorb fees increases.
Introduction of hazmat fee
Amazon is introducing separate fulfillment fees for dangerous goods that contain flammable or pressurized aerosol substances and items containing lithium ion batteries.
Full schedule of new hazmat fees is in the link on the bottom of the article. If you have hazmat items make sure to review this additional FBA fee for dangerous goods
Our take: this will push hazmat sellers to take a hard look at profitability of FBA program, and evaluate Self-Fulfilled Prime option.
2. Storage fees
Monthly storage fees remain unchanged.
Long term storages changes:
3. Referral fees
There are sizable referral fee changes to some categories:
Our take: Categories that went from flat % to tiered based on price (such as Baby, Beauty, Health and Personal Care) will see positive change for items priced under $10.00. Reduction in minimum applicable fee, again, gives some breathing room for lower priced items.
With changes across many fees categories it is critical brands review their Amazon catalog and inventory management to get a full picture of impact to their profitability.
And if you need help with Amazon financial models contact us.