Depending on category, this fee is generally 15% of the total price of the item being sold. This fee will remain unchanged in 2023.
Fuel & Inflation Surcharge
Earlier this year Amazon implemented a fuel & inflation surcharge. This was a 5% increase based on the FBA fee for of an item. The cost of this has not reduced as much as Amazon would have liked, however, they are removing the fuel & inflation surcharge but will adjust the FBA fee rate to account for increased cost. This takes affect immediately.
FBA & Storage Fees
As most of you have noticed Amazon has put storage and restock limits under the microscope. This year Amazon saw some sellers use more storage than expected or believe was needed to serve customers well, which had an impact on how much product from other sellers could be sent into Amazon fulfillment centers. As a result, Amazon will make updates to their FBA fees that will continue to better align with their underlying costs. This should help improve inventory health, better use of storage, and create more capacity for sellers who are using space efficiently.
Amazon will increase FBA fees by $0.22 on average. According to Amazon this is “below fee increases announced by other fulfillment and logistics providers.” As a result, Amazon will introduce more weight tiers for FBA outbound fees at the quarter and half pound level. The change is to better align with shipping costs.
Despite the average increase being $0.22 across size tiers, it is important to know the base rate for the large standard size tier above 3 pounds went up by $0.73. This is much higher than the $0.22 average provided and it impacts the most popular size tier that our clients sell in. It includes items that are 18" x 14" x 8" or smaller and weigh between 3 and 20 pounds. If this reflects your products, please contact me for more details. Below is a table outlining the change in 2023 FBA fees as well.
Peak / Off Peak Storage Fees
Off peak months are January to September. For standard-size products this fee will increase to $0.04 per cubic foot and oversized products by $0.03 per cubic foot. For peak months (October to December) Amazon will increase storage fees for its non-sortable (Oversize) network by $0.20 per cubic foot. Sortable (Standard-size) networks will remain unchanged.
Storage Utilization Surcharge
Amazon will introduce a storage utilization surcharge for sellers who have a high cube of inventory stored in their fulfillment centers relative to the cube of their recent weekly sales. This change will take effect on April 1, 2023.
Amazon will calculate your storage utilization ratio by dividing average daily inventory volume stored by average daily shipped volume over the trailing 13 weeks, and normalizing it by number of weeks. The formula for the ratio is:
(Trailing 13 weeks daily inventory volume / Trailing 13 weeks daily shipped volume) / 7 days in a week
Amazon will only apply the storage utilization surcharge to sellers with Professional accounts and a storage utilization ratio above 26 weeks. Below is an example calculation
Although this is one of the more notable changes for 2023, it will mainly impact sellers with poor inventory health or sell through rates.
Long Term Storage
Amazon will increase the surcharge applied to inventory stored between 271-365 days. In addition, Amazon will introduce aged inventory surcharges on inventory stored between 180-270 days. Basically, they are bumping this down a tier and significantly increasing the rate on the exiting tiers. You'll see in the table below that the rate for 271 -300 days more than doubled and the 301-330 & 331-365 tiers tripled. These changes will take effect for the April 15, 2023, aged inventory assessment date.
Removal and Disposal Fees
Although left unspecified, Amazon stated an increase will be made to these fees due to the increased cost of these services. Liquidation fees will remain unchanged.
Small and Light Program
These fees will be reduced by expanding and increasing the item price for eligible products. One of the eligibility requirements was a maximum price of $10. It is now $12. This is minor and the program doesn’t apply to most of our clients.
Message from Amazon
“These changes are designed to allow us to serve customers while ensuring that we continue to provide you collectively better with a great value relative to alternatives. On average, these fee changes are below those announced so far by other logistics providers. In addition, Amazon’s fulfillment fees will remain an average of 30% less expensive than standard-shipping methods offered by other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.”
If you have any specific questions about the 2023 fee changes and how they may affect your Amazon business, please don't hesitate to contact us.