Battling FBA's Fee Frenzy: Navigating Placement & Inventory Charges in a $12M FBA Business
Greetings my fellow disheartened sellers,
I wanted to take a moment and sum up my thoughts on the ever-increasing Amazon fees, most recently, the inventory placement fee and the impending low inventory fee. These new fees, combined with the already heavy burden of FBA fees, are impacting the very sustainability of my company.
Financial Context:
In the last twelve months, my company contributed over $4 million in fees to Amazon, along with $360,000 in Sponsored Ads, on $12M of FBA revenue. Despite Amazon enjoying a gross profit margin of 36% from my business, my own margins of 13% will be squeezed an additional 8-10% by inventory placement fees that average $0.40 per unit, or roughly $150,000. This new $150K doesn't include the low inventory fees which go live in a month, but for the moment, let's stick with placement fees and the main issues we're having.
1. Systemic Issues with Amazon Optimized Shipments (the no-fee option):
One of the core issues with these new placement fees lies in the FBA system's inability to offer the no-fee option of Amazon Optimized Shipments, regardless of the number of SKUs included in my shipments. This limitation forces me into single-warehouse placements, directly contradicting the supposed efficiency Amazon promotes.
2. Inaccurate Measurements and Oversized Classifications:
Compounding the issue of there being no no-fee option, are the inaccurate measurements for products. In my particular case that would be belts, which are often measured lengthwise instead of coiled. This leads to inflated FBA fees and incorrect oversized classifications, further escalating costs unjustly.
Amazon limits us to 20 cubiscan attempts per month, but I carry over 10,000 different SKUs, and I can rarely make headway as listings constantly break, and incorrect dimensions get added faster than I can convince Seller Support to fix the issues (many of which they deny even when provided with evidence, but this is larger Seller Support issue with which you are all familiar).
3. Exclusions from AWD
Complicating matters further, my key product lines are excluded from the no-placement-fees AWD program given that I primarily sell footwear and apparel.
4. The Low Inventory Fee and the Egregious Double Dip:
In a news post in these forums, Amazon justified the new low inventory fees with the rationale, "When sellers don’t carry enough inventory, we are unable to distribute products as effectively and efficiently across our network." Is this not the same issue that the inventory placement fees are intended to address, that our products be shipped to the most optimum warehouses, and in doing so, reduce shipping times to our mutual customers? This just feels wrong that we seem to be getting taxed twice for the same exact thing.
A Tipping Point:
These challenges highlight a critical juncture; there's a limit to what Amazon can extract from sellers before they kill their golden goose. As I mentioned above, 13% is my operating margin, not my net profit margin. At some point, there simply won't be any blood left for them to take from us, as we can only raise our prices so high in a competitive marketplace, or our customers will refuse to pay the price required, perhaps seeking other products off of Amazon. In the case of my business, that would mean $4M in annual fees that they get from me. The sad thing is we're growing, and Amazon's fees are naturally increasing as we add products, expanding our SKUs, and improving our listings.
But the trajectory of FBA's fee structure and policies is unsustainable and necessitates urgent reevaluation. It's vital to address these issues to prevent sellers from being driven out, ultimately harming the very ecosystem we all contribute to.
Sadly, I've never seen Amazon change its mind, and I doubt that anyone in the Seattle Ivory Tower will ever see this, or if they did, make any kind of change. They have run the numbers and believe this is what's best for their company. So it may be that in the short term, I'd be better off investing in Amazon stock than in my own business, as they will likely have some great quarters, at least until they run out of meat and start hitting bone.
0 replies
Seller_O0IHdb7xjNv0X
This is a great collection of thoughts about our current situation. I've been able to adjust to all the rate increases over the last few years but this combination of placement and low inventory fees seem insurmountable at this point. Not only the fees themselves but the current lack of ability to plan for them.
Hopefully all the angst on the forums catches the eye of Amazon.
Seller_WsdULSSIajCRd
There are a lot of posts out on this topic with most being like mine. Sellers in general discouragement and dismay battling a sense of helplessness at our inability to have a voice in this.
But like all good entrepreneurs, we acknowledge what we can’t change and try to focus on what we can and there are workarounds that some sellers are finding that may help you. So I’d encourage anyone who is discouraged to read through these and look for things that might help, and if I find anything else helpful, I’ll update this post with it.
Remember that good changes are coming and that we still have more opportunity here in the 21st century, and in this great country, than humans have had at any point in the past. (And that AI will soon replace the “Support” that had become the primary obstacle to actual improvement.)
HIGHLY STRINGENT WORKAROUND TO CUT NEW FBA SPD SHIPMENT PLACEMENT FEES
Regarding Inventory Placement Fees 2024
WARNING DANGER new LTL/FTL inbound placement service charges cost 2x UPS
What is the Placement Service and how do I opt out?
The New FBA Inbound Inventory Placement Service Fee - A Huge Win for Chinese Sellers
Inventory placement fee increasing shipping costs 6X
Amazons Double Wammy Inbound Placement Fees
These are the larger discussions I’ve been able to find. I know I missed some but if you find any that has helpful information for sellers, please reply with a link.
Best of luck everyone!
Seller_2F0nz2Sl9HMdK
Like many of you, I've been closely monitoring our discussion on the recent changes and challenges we face as third-party sellers on Amazon. It's clear that the landscape is shifting, and not necessarily to our advantage. I want to highlight several critical issues that underscore our shared concerns:
The introduction of Inbound Placement Fees and Low Inventory Fees adds another layer of financial burden on us, making it increasingly difficult to operate profitably.
Random increases in Amazon Fulfillment Fees on our listings, without any changes in our products or packaging, have become an unpredictable and stressful aspect of selling on Amazon.
The pace at which Amazon increases its fulfillment fees has significantly accelerated, with fee adjustments now occurring two to three times a year.
Amazon's aggressive push for sellers to invest more in advertising, including the temporary removal of key product variations and requesting additional documentation, seems designed to coerce more spending on our part.
Amazon's dual role as both marketplace operator and direct competitor presents a significant conflict of interest. Their advantages in terms of free advertising, fulfillment, and referral fees create an uneven playing field that is difficult for independent sellers to compete against.
These examples are just the tip of the iceberg, with many more issues affecting our ability to sustain and grow our businesses on this platform.
The message being sent, whether intentionally or not, is clear: Amazon may no longer value its third-party sellers as it once did. This shift in dynamics is moving us away from the diverse and vibrant community that was instrumental in building Amazon into the powerhouse it is today. Instead, we're seeing a pivot towards a model that disproportionately benefits Amazon, often at our expense.
If these trends continue without rectification, I fear many of us may have no choice but to seek alternative platforms, despite the pivotal role we've played in Amazon's success. The notion that Amazon is too big to need us is a dangerous presumption. Even the largest entities can falter without the support and diversity that third-party sellers bring to the marketplace.
It's crucial that we continue this conversation and work towards actionable solutions. Our goal isn't just to air grievances but to foster a sustainable environment where all parties can thrive. After all, Amazon's peak should not signal the beginning of a downturn for third-party sellers.
Best,
Seller_a17OxJGVBeZhI
I agree. We do about $3M in sales and this is like a upfront tax. It hurts cash flow for sure. We would send in a truckload at a time for about $1200. Now with or without placement fees a truckload worth of inventory will cost us $6000 or more.
Amazon wants all goods going through their warehouses for a number of reasons. One is if your using their AWD you can't sell on other marketplaces. Plus they want to get you hooked and raise costs later of course.
I don't know if you do any auditing of your inventory but check out GETIDA. They could automate your re-measurement tickets, inventory etc.
I'm most worried about the high return fees hitting soon. June I think? Every unit returned over their threshold costs like half of the FBA cost. It's nuts. Customer use your stuff and return it free and then we have to pay another fee on top.
Seller_iobipI6xASRkh
My largest issue is they don't even give an option to do anything but pay it. Their "specific" algorithm is unavailable to sellers to know what they are looking for or want.
Given that we cannot do FBM as a manufacturer for multiple brands, this leaves us really letting FBA run out. Unlike many small businesses, we have a huge platform off Amazon, and I have to justify expenses. This I cannot explain or even say how it works. I have a meeting in 2 days and without a single answer for them on what this is or how it works other than Amazon's secret algorithm.
If ANYONE finds a way to understand what they want please tag me, this is exhausting and no way I move these 500-odd units around in boxes does Amazon give any other option but to pay 4x higher than normal, which is above expense allowances. I am pretty much at a wall.
Seller_2F0nz2Sl9HMdK
I urge those of you promoting Amazon Selling Courses to reconsider your focus. Instead of investing time and resources in courses that benefit Amazon's brand, let's prioritize our own long-term success.
These courses perpetuate the illusion that selling on Amazon leads to substantial wealth for everyone involved. However, this is often far from the truth and can ultimately harm third-party sellers, like ourselves, in the long run.
Rather than serving as unwitting ambassadors for Amazon, let's explore alternative platforms and revenue streams that better align with our interests and goals.
Seller_2nHKMJRUHkO90
Wow what an Amazing Post. I sell $15million per year, been selling on Amazon for 10-years. My numbers are very similar to yours. My situation is very similar to yours. And I agree with everything you said. I can feel your pain. I'm there with you.
Seller_olOtvIaZSSmYt
I agree wholeheartly with everything said in this post.. Unfortunately nobody in Amazon will care, I've paid millions at this point between all my accounts.
The most egregious out of all of these is the double dipping of the low inventory fee. I dont believe many sellers comprehend how catestrophic this is going to be for anyone that has a semi large catelog. We carry well over 2k SKUS, it is LITERALY impossible to procure the amount of capital (nether the less find the stock) for all of these SKUS to withstand 28 days of sales MINIMUM. Completely asinine
Seller_vQrMnPKQlwPaI
Completely agree. It's incomprehensible. Unless by strategic decision, Amazon decided to remove many from the business, which was already quite dubious before these latest fees.
Seller_JUzllISOgHLP6
This is a very helpful and insightful post. Thank you for not simply complaining but actually explaining.
Our brand has always been glad to sell on Amazon and has understood that the fees brought us access to a big marketplace. These fees don't help us get access to a broader market; it's getting less for more.
Moderators, I hope you're reading through these threads and sharing the feedback.
Battling FBA's Fee Frenzy: Navigating Placement & Inventory Charges in a $12M FBA Business
Greetings my fellow disheartened sellers,
I wanted to take a moment and sum up my thoughts on the ever-increasing Amazon fees, most recently, the inventory placement fee and the impending low inventory fee. These new fees, combined with the already heavy burden of FBA fees, are impacting the very sustainability of my company.
Financial Context:
In the last twelve months, my company contributed over $4 million in fees to Amazon, along with $360,000 in Sponsored Ads, on $12M of FBA revenue. Despite Amazon enjoying a gross profit margin of 36% from my business, my own margins of 13% will be squeezed an additional 8-10% by inventory placement fees that average $0.40 per unit, or roughly $150,000. This new $150K doesn't include the low inventory fees which go live in a month, but for the moment, let's stick with placement fees and the main issues we're having.
1. Systemic Issues with Amazon Optimized Shipments (the no-fee option):
One of the core issues with these new placement fees lies in the FBA system's inability to offer the no-fee option of Amazon Optimized Shipments, regardless of the number of SKUs included in my shipments. This limitation forces me into single-warehouse placements, directly contradicting the supposed efficiency Amazon promotes.
2. Inaccurate Measurements and Oversized Classifications:
Compounding the issue of there being no no-fee option, are the inaccurate measurements for products. In my particular case that would be belts, which are often measured lengthwise instead of coiled. This leads to inflated FBA fees and incorrect oversized classifications, further escalating costs unjustly.
Amazon limits us to 20 cubiscan attempts per month, but I carry over 10,000 different SKUs, and I can rarely make headway as listings constantly break, and incorrect dimensions get added faster than I can convince Seller Support to fix the issues (many of which they deny even when provided with evidence, but this is larger Seller Support issue with which you are all familiar).
3. Exclusions from AWD
Complicating matters further, my key product lines are excluded from the no-placement-fees AWD program given that I primarily sell footwear and apparel.
4. The Low Inventory Fee and the Egregious Double Dip:
In a news post in these forums, Amazon justified the new low inventory fees with the rationale, "When sellers don’t carry enough inventory, we are unable to distribute products as effectively and efficiently across our network." Is this not the same issue that the inventory placement fees are intended to address, that our products be shipped to the most optimum warehouses, and in doing so, reduce shipping times to our mutual customers? This just feels wrong that we seem to be getting taxed twice for the same exact thing.
A Tipping Point:
These challenges highlight a critical juncture; there's a limit to what Amazon can extract from sellers before they kill their golden goose. As I mentioned above, 13% is my operating margin, not my net profit margin. At some point, there simply won't be any blood left for them to take from us, as we can only raise our prices so high in a competitive marketplace, or our customers will refuse to pay the price required, perhaps seeking other products off of Amazon. In the case of my business, that would mean $4M in annual fees that they get from me. The sad thing is we're growing, and Amazon's fees are naturally increasing as we add products, expanding our SKUs, and improving our listings.
But the trajectory of FBA's fee structure and policies is unsustainable and necessitates urgent reevaluation. It's vital to address these issues to prevent sellers from being driven out, ultimately harming the very ecosystem we all contribute to.
Sadly, I've never seen Amazon change its mind, and I doubt that anyone in the Seattle Ivory Tower will ever see this, or if they did, make any kind of change. They have run the numbers and believe this is what's best for their company. So it may be that in the short term, I'd be better off investing in Amazon stock than in my own business, as they will likely have some great quarters, at least until they run out of meat and start hitting bone.
Battling FBA's Fee Frenzy: Navigating Placement & Inventory Charges in a $12M FBA Business
Greetings my fellow disheartened sellers,
I wanted to take a moment and sum up my thoughts on the ever-increasing Amazon fees, most recently, the inventory placement fee and the impending low inventory fee. These new fees, combined with the already heavy burden of FBA fees, are impacting the very sustainability of my company.
Financial Context:
In the last twelve months, my company contributed over $4 million in fees to Amazon, along with $360,000 in Sponsored Ads, on $12M of FBA revenue. Despite Amazon enjoying a gross profit margin of 36% from my business, my own margins of 13% will be squeezed an additional 8-10% by inventory placement fees that average $0.40 per unit, or roughly $150,000. This new $150K doesn't include the low inventory fees which go live in a month, but for the moment, let's stick with placement fees and the main issues we're having.
1. Systemic Issues with Amazon Optimized Shipments (the no-fee option):
One of the core issues with these new placement fees lies in the FBA system's inability to offer the no-fee option of Amazon Optimized Shipments, regardless of the number of SKUs included in my shipments. This limitation forces me into single-warehouse placements, directly contradicting the supposed efficiency Amazon promotes.
2. Inaccurate Measurements and Oversized Classifications:
Compounding the issue of there being no no-fee option, are the inaccurate measurements for products. In my particular case that would be belts, which are often measured lengthwise instead of coiled. This leads to inflated FBA fees and incorrect oversized classifications, further escalating costs unjustly.
Amazon limits us to 20 cubiscan attempts per month, but I carry over 10,000 different SKUs, and I can rarely make headway as listings constantly break, and incorrect dimensions get added faster than I can convince Seller Support to fix the issues (many of which they deny even when provided with evidence, but this is larger Seller Support issue with which you are all familiar).
3. Exclusions from AWD
Complicating matters further, my key product lines are excluded from the no-placement-fees AWD program given that I primarily sell footwear and apparel.
4. The Low Inventory Fee and the Egregious Double Dip:
In a news post in these forums, Amazon justified the new low inventory fees with the rationale, "When sellers don’t carry enough inventory, we are unable to distribute products as effectively and efficiently across our network." Is this not the same issue that the inventory placement fees are intended to address, that our products be shipped to the most optimum warehouses, and in doing so, reduce shipping times to our mutual customers? This just feels wrong that we seem to be getting taxed twice for the same exact thing.
A Tipping Point:
These challenges highlight a critical juncture; there's a limit to what Amazon can extract from sellers before they kill their golden goose. As I mentioned above, 13% is my operating margin, not my net profit margin. At some point, there simply won't be any blood left for them to take from us, as we can only raise our prices so high in a competitive marketplace, or our customers will refuse to pay the price required, perhaps seeking other products off of Amazon. In the case of my business, that would mean $4M in annual fees that they get from me. The sad thing is we're growing, and Amazon's fees are naturally increasing as we add products, expanding our SKUs, and improving our listings.
But the trajectory of FBA's fee structure and policies is unsustainable and necessitates urgent reevaluation. It's vital to address these issues to prevent sellers from being driven out, ultimately harming the very ecosystem we all contribute to.
Sadly, I've never seen Amazon change its mind, and I doubt that anyone in the Seattle Ivory Tower will ever see this, or if they did, make any kind of change. They have run the numbers and believe this is what's best for their company. So it may be that in the short term, I'd be better off investing in Amazon stock than in my own business, as they will likely have some great quarters, at least until they run out of meat and start hitting bone.
0 replies
0 replies
Seller_O0IHdb7xjNv0X
This is a great collection of thoughts about our current situation. I've been able to adjust to all the rate increases over the last few years but this combination of placement and low inventory fees seem insurmountable at this point. Not only the fees themselves but the current lack of ability to plan for them.
Hopefully all the angst on the forums catches the eye of Amazon.
Seller_WsdULSSIajCRd
There are a lot of posts out on this topic with most being like mine. Sellers in general discouragement and dismay battling a sense of helplessness at our inability to have a voice in this.
But like all good entrepreneurs, we acknowledge what we can’t change and try to focus on what we can and there are workarounds that some sellers are finding that may help you. So I’d encourage anyone who is discouraged to read through these and look for things that might help, and if I find anything else helpful, I’ll update this post with it.
Remember that good changes are coming and that we still have more opportunity here in the 21st century, and in this great country, than humans have had at any point in the past. (And that AI will soon replace the “Support” that had become the primary obstacle to actual improvement.)
HIGHLY STRINGENT WORKAROUND TO CUT NEW FBA SPD SHIPMENT PLACEMENT FEES
Regarding Inventory Placement Fees 2024
WARNING DANGER new LTL/FTL inbound placement service charges cost 2x UPS
What is the Placement Service and how do I opt out?
The New FBA Inbound Inventory Placement Service Fee - A Huge Win for Chinese Sellers
Inventory placement fee increasing shipping costs 6X
Amazons Double Wammy Inbound Placement Fees
These are the larger discussions I’ve been able to find. I know I missed some but if you find any that has helpful information for sellers, please reply with a link.
Best of luck everyone!
Seller_2F0nz2Sl9HMdK
Like many of you, I've been closely monitoring our discussion on the recent changes and challenges we face as third-party sellers on Amazon. It's clear that the landscape is shifting, and not necessarily to our advantage. I want to highlight several critical issues that underscore our shared concerns:
The introduction of Inbound Placement Fees and Low Inventory Fees adds another layer of financial burden on us, making it increasingly difficult to operate profitably.
Random increases in Amazon Fulfillment Fees on our listings, without any changes in our products or packaging, have become an unpredictable and stressful aspect of selling on Amazon.
The pace at which Amazon increases its fulfillment fees has significantly accelerated, with fee adjustments now occurring two to three times a year.
Amazon's aggressive push for sellers to invest more in advertising, including the temporary removal of key product variations and requesting additional documentation, seems designed to coerce more spending on our part.
Amazon's dual role as both marketplace operator and direct competitor presents a significant conflict of interest. Their advantages in terms of free advertising, fulfillment, and referral fees create an uneven playing field that is difficult for independent sellers to compete against.
These examples are just the tip of the iceberg, with many more issues affecting our ability to sustain and grow our businesses on this platform.
The message being sent, whether intentionally or not, is clear: Amazon may no longer value its third-party sellers as it once did. This shift in dynamics is moving us away from the diverse and vibrant community that was instrumental in building Amazon into the powerhouse it is today. Instead, we're seeing a pivot towards a model that disproportionately benefits Amazon, often at our expense.
If these trends continue without rectification, I fear many of us may have no choice but to seek alternative platforms, despite the pivotal role we've played in Amazon's success. The notion that Amazon is too big to need us is a dangerous presumption. Even the largest entities can falter without the support and diversity that third-party sellers bring to the marketplace.
It's crucial that we continue this conversation and work towards actionable solutions. Our goal isn't just to air grievances but to foster a sustainable environment where all parties can thrive. After all, Amazon's peak should not signal the beginning of a downturn for third-party sellers.
Best,
Seller_a17OxJGVBeZhI
I agree. We do about $3M in sales and this is like a upfront tax. It hurts cash flow for sure. We would send in a truckload at a time for about $1200. Now with or without placement fees a truckload worth of inventory will cost us $6000 or more.
Amazon wants all goods going through their warehouses for a number of reasons. One is if your using their AWD you can't sell on other marketplaces. Plus they want to get you hooked and raise costs later of course.
I don't know if you do any auditing of your inventory but check out GETIDA. They could automate your re-measurement tickets, inventory etc.
I'm most worried about the high return fees hitting soon. June I think? Every unit returned over their threshold costs like half of the FBA cost. It's nuts. Customer use your stuff and return it free and then we have to pay another fee on top.
Seller_iobipI6xASRkh
My largest issue is they don't even give an option to do anything but pay it. Their "specific" algorithm is unavailable to sellers to know what they are looking for or want.
Given that we cannot do FBM as a manufacturer for multiple brands, this leaves us really letting FBA run out. Unlike many small businesses, we have a huge platform off Amazon, and I have to justify expenses. This I cannot explain or even say how it works. I have a meeting in 2 days and without a single answer for them on what this is or how it works other than Amazon's secret algorithm.
If ANYONE finds a way to understand what they want please tag me, this is exhausting and no way I move these 500-odd units around in boxes does Amazon give any other option but to pay 4x higher than normal, which is above expense allowances. I am pretty much at a wall.
Seller_2F0nz2Sl9HMdK
I urge those of you promoting Amazon Selling Courses to reconsider your focus. Instead of investing time and resources in courses that benefit Amazon's brand, let's prioritize our own long-term success.
These courses perpetuate the illusion that selling on Amazon leads to substantial wealth for everyone involved. However, this is often far from the truth and can ultimately harm third-party sellers, like ourselves, in the long run.
Rather than serving as unwitting ambassadors for Amazon, let's explore alternative platforms and revenue streams that better align with our interests and goals.
Seller_2nHKMJRUHkO90
Wow what an Amazing Post. I sell $15million per year, been selling on Amazon for 10-years. My numbers are very similar to yours. My situation is very similar to yours. And I agree with everything you said. I can feel your pain. I'm there with you.
Seller_olOtvIaZSSmYt
I agree wholeheartly with everything said in this post.. Unfortunately nobody in Amazon will care, I've paid millions at this point between all my accounts.
The most egregious out of all of these is the double dipping of the low inventory fee. I dont believe many sellers comprehend how catestrophic this is going to be for anyone that has a semi large catelog. We carry well over 2k SKUS, it is LITERALY impossible to procure the amount of capital (nether the less find the stock) for all of these SKUS to withstand 28 days of sales MINIMUM. Completely asinine
Seller_vQrMnPKQlwPaI
Completely agree. It's incomprehensible. Unless by strategic decision, Amazon decided to remove many from the business, which was already quite dubious before these latest fees.
Seller_JUzllISOgHLP6
This is a very helpful and insightful post. Thank you for not simply complaining but actually explaining.
Our brand has always been glad to sell on Amazon and has understood that the fees brought us access to a big marketplace. These fees don't help us get access to a broader market; it's getting less for more.
Moderators, I hope you're reading through these threads and sharing the feedback.
Seller_O0IHdb7xjNv0X
This is a great collection of thoughts about our current situation. I've been able to adjust to all the rate increases over the last few years but this combination of placement and low inventory fees seem insurmountable at this point. Not only the fees themselves but the current lack of ability to plan for them.
Hopefully all the angst on the forums catches the eye of Amazon.
Seller_O0IHdb7xjNv0X
This is a great collection of thoughts about our current situation. I've been able to adjust to all the rate increases over the last few years but this combination of placement and low inventory fees seem insurmountable at this point. Not only the fees themselves but the current lack of ability to plan for them.
Hopefully all the angst on the forums catches the eye of Amazon.
Seller_WsdULSSIajCRd
There are a lot of posts out on this topic with most being like mine. Sellers in general discouragement and dismay battling a sense of helplessness at our inability to have a voice in this.
But like all good entrepreneurs, we acknowledge what we can’t change and try to focus on what we can and there are workarounds that some sellers are finding that may help you. So I’d encourage anyone who is discouraged to read through these and look for things that might help, and if I find anything else helpful, I’ll update this post with it.
Remember that good changes are coming and that we still have more opportunity here in the 21st century, and in this great country, than humans have had at any point in the past. (And that AI will soon replace the “Support” that had become the primary obstacle to actual improvement.)
HIGHLY STRINGENT WORKAROUND TO CUT NEW FBA SPD SHIPMENT PLACEMENT FEES
Regarding Inventory Placement Fees 2024
WARNING DANGER new LTL/FTL inbound placement service charges cost 2x UPS
What is the Placement Service and how do I opt out?
The New FBA Inbound Inventory Placement Service Fee - A Huge Win for Chinese Sellers
Inventory placement fee increasing shipping costs 6X
Amazons Double Wammy Inbound Placement Fees
These are the larger discussions I’ve been able to find. I know I missed some but if you find any that has helpful information for sellers, please reply with a link.
Best of luck everyone!
Seller_WsdULSSIajCRd
There are a lot of posts out on this topic with most being like mine. Sellers in general discouragement and dismay battling a sense of helplessness at our inability to have a voice in this.
But like all good entrepreneurs, we acknowledge what we can’t change and try to focus on what we can and there are workarounds that some sellers are finding that may help you. So I’d encourage anyone who is discouraged to read through these and look for things that might help, and if I find anything else helpful, I’ll update this post with it.
Remember that good changes are coming and that we still have more opportunity here in the 21st century, and in this great country, than humans have had at any point in the past. (And that AI will soon replace the “Support” that had become the primary obstacle to actual improvement.)
HIGHLY STRINGENT WORKAROUND TO CUT NEW FBA SPD SHIPMENT PLACEMENT FEES
Regarding Inventory Placement Fees 2024
WARNING DANGER new LTL/FTL inbound placement service charges cost 2x UPS
What is the Placement Service and how do I opt out?
The New FBA Inbound Inventory Placement Service Fee - A Huge Win for Chinese Sellers
Inventory placement fee increasing shipping costs 6X
Amazons Double Wammy Inbound Placement Fees
These are the larger discussions I’ve been able to find. I know I missed some but if you find any that has helpful information for sellers, please reply with a link.
Best of luck everyone!
Seller_2F0nz2Sl9HMdK
Like many of you, I've been closely monitoring our discussion on the recent changes and challenges we face as third-party sellers on Amazon. It's clear that the landscape is shifting, and not necessarily to our advantage. I want to highlight several critical issues that underscore our shared concerns:
The introduction of Inbound Placement Fees and Low Inventory Fees adds another layer of financial burden on us, making it increasingly difficult to operate profitably.
Random increases in Amazon Fulfillment Fees on our listings, without any changes in our products or packaging, have become an unpredictable and stressful aspect of selling on Amazon.
The pace at which Amazon increases its fulfillment fees has significantly accelerated, with fee adjustments now occurring two to three times a year.
Amazon's aggressive push for sellers to invest more in advertising, including the temporary removal of key product variations and requesting additional documentation, seems designed to coerce more spending on our part.
Amazon's dual role as both marketplace operator and direct competitor presents a significant conflict of interest. Their advantages in terms of free advertising, fulfillment, and referral fees create an uneven playing field that is difficult for independent sellers to compete against.
These examples are just the tip of the iceberg, with many more issues affecting our ability to sustain and grow our businesses on this platform.
The message being sent, whether intentionally or not, is clear: Amazon may no longer value its third-party sellers as it once did. This shift in dynamics is moving us away from the diverse and vibrant community that was instrumental in building Amazon into the powerhouse it is today. Instead, we're seeing a pivot towards a model that disproportionately benefits Amazon, often at our expense.
If these trends continue without rectification, I fear many of us may have no choice but to seek alternative platforms, despite the pivotal role we've played in Amazon's success. The notion that Amazon is too big to need us is a dangerous presumption. Even the largest entities can falter without the support and diversity that third-party sellers bring to the marketplace.
It's crucial that we continue this conversation and work towards actionable solutions. Our goal isn't just to air grievances but to foster a sustainable environment where all parties can thrive. After all, Amazon's peak should not signal the beginning of a downturn for third-party sellers.
Best,
Seller_2F0nz2Sl9HMdK
Like many of you, I've been closely monitoring our discussion on the recent changes and challenges we face as third-party sellers on Amazon. It's clear that the landscape is shifting, and not necessarily to our advantage. I want to highlight several critical issues that underscore our shared concerns:
The introduction of Inbound Placement Fees and Low Inventory Fees adds another layer of financial burden on us, making it increasingly difficult to operate profitably.
Random increases in Amazon Fulfillment Fees on our listings, without any changes in our products or packaging, have become an unpredictable and stressful aspect of selling on Amazon.
The pace at which Amazon increases its fulfillment fees has significantly accelerated, with fee adjustments now occurring two to three times a year.
Amazon's aggressive push for sellers to invest more in advertising, including the temporary removal of key product variations and requesting additional documentation, seems designed to coerce more spending on our part.
Amazon's dual role as both marketplace operator and direct competitor presents a significant conflict of interest. Their advantages in terms of free advertising, fulfillment, and referral fees create an uneven playing field that is difficult for independent sellers to compete against.
These examples are just the tip of the iceberg, with many more issues affecting our ability to sustain and grow our businesses on this platform.
The message being sent, whether intentionally or not, is clear: Amazon may no longer value its third-party sellers as it once did. This shift in dynamics is moving us away from the diverse and vibrant community that was instrumental in building Amazon into the powerhouse it is today. Instead, we're seeing a pivot towards a model that disproportionately benefits Amazon, often at our expense.
If these trends continue without rectification, I fear many of us may have no choice but to seek alternative platforms, despite the pivotal role we've played in Amazon's success. The notion that Amazon is too big to need us is a dangerous presumption. Even the largest entities can falter without the support and diversity that third-party sellers bring to the marketplace.
It's crucial that we continue this conversation and work towards actionable solutions. Our goal isn't just to air grievances but to foster a sustainable environment where all parties can thrive. After all, Amazon's peak should not signal the beginning of a downturn for third-party sellers.
Best,
Seller_a17OxJGVBeZhI
I agree. We do about $3M in sales and this is like a upfront tax. It hurts cash flow for sure. We would send in a truckload at a time for about $1200. Now with or without placement fees a truckload worth of inventory will cost us $6000 or more.
Amazon wants all goods going through their warehouses for a number of reasons. One is if your using their AWD you can't sell on other marketplaces. Plus they want to get you hooked and raise costs later of course.
I don't know if you do any auditing of your inventory but check out GETIDA. They could automate your re-measurement tickets, inventory etc.
I'm most worried about the high return fees hitting soon. June I think? Every unit returned over their threshold costs like half of the FBA cost. It's nuts. Customer use your stuff and return it free and then we have to pay another fee on top.
Seller_a17OxJGVBeZhI
I agree. We do about $3M in sales and this is like a upfront tax. It hurts cash flow for sure. We would send in a truckload at a time for about $1200. Now with or without placement fees a truckload worth of inventory will cost us $6000 or more.
Amazon wants all goods going through their warehouses for a number of reasons. One is if your using their AWD you can't sell on other marketplaces. Plus they want to get you hooked and raise costs later of course.
I don't know if you do any auditing of your inventory but check out GETIDA. They could automate your re-measurement tickets, inventory etc.
I'm most worried about the high return fees hitting soon. June I think? Every unit returned over their threshold costs like half of the FBA cost. It's nuts. Customer use your stuff and return it free and then we have to pay another fee on top.
Seller_iobipI6xASRkh
My largest issue is they don't even give an option to do anything but pay it. Their "specific" algorithm is unavailable to sellers to know what they are looking for or want.
Given that we cannot do FBM as a manufacturer for multiple brands, this leaves us really letting FBA run out. Unlike many small businesses, we have a huge platform off Amazon, and I have to justify expenses. This I cannot explain or even say how it works. I have a meeting in 2 days and without a single answer for them on what this is or how it works other than Amazon's secret algorithm.
If ANYONE finds a way to understand what they want please tag me, this is exhausting and no way I move these 500-odd units around in boxes does Amazon give any other option but to pay 4x higher than normal, which is above expense allowances. I am pretty much at a wall.
Seller_iobipI6xASRkh
My largest issue is they don't even give an option to do anything but pay it. Their "specific" algorithm is unavailable to sellers to know what they are looking for or want.
Given that we cannot do FBM as a manufacturer for multiple brands, this leaves us really letting FBA run out. Unlike many small businesses, we have a huge platform off Amazon, and I have to justify expenses. This I cannot explain or even say how it works. I have a meeting in 2 days and without a single answer for them on what this is or how it works other than Amazon's secret algorithm.
If ANYONE finds a way to understand what they want please tag me, this is exhausting and no way I move these 500-odd units around in boxes does Amazon give any other option but to pay 4x higher than normal, which is above expense allowances. I am pretty much at a wall.
Seller_2F0nz2Sl9HMdK
I urge those of you promoting Amazon Selling Courses to reconsider your focus. Instead of investing time and resources in courses that benefit Amazon's brand, let's prioritize our own long-term success.
These courses perpetuate the illusion that selling on Amazon leads to substantial wealth for everyone involved. However, this is often far from the truth and can ultimately harm third-party sellers, like ourselves, in the long run.
Rather than serving as unwitting ambassadors for Amazon, let's explore alternative platforms and revenue streams that better align with our interests and goals.
Seller_2F0nz2Sl9HMdK
I urge those of you promoting Amazon Selling Courses to reconsider your focus. Instead of investing time and resources in courses that benefit Amazon's brand, let's prioritize our own long-term success.
These courses perpetuate the illusion that selling on Amazon leads to substantial wealth for everyone involved. However, this is often far from the truth and can ultimately harm third-party sellers, like ourselves, in the long run.
Rather than serving as unwitting ambassadors for Amazon, let's explore alternative platforms and revenue streams that better align with our interests and goals.
Seller_2nHKMJRUHkO90
Wow what an Amazing Post. I sell $15million per year, been selling on Amazon for 10-years. My numbers are very similar to yours. My situation is very similar to yours. And I agree with everything you said. I can feel your pain. I'm there with you.
Seller_2nHKMJRUHkO90
Wow what an Amazing Post. I sell $15million per year, been selling on Amazon for 10-years. My numbers are very similar to yours. My situation is very similar to yours. And I agree with everything you said. I can feel your pain. I'm there with you.
Seller_olOtvIaZSSmYt
I agree wholeheartly with everything said in this post.. Unfortunately nobody in Amazon will care, I've paid millions at this point between all my accounts.
The most egregious out of all of these is the double dipping of the low inventory fee. I dont believe many sellers comprehend how catestrophic this is going to be for anyone that has a semi large catelog. We carry well over 2k SKUS, it is LITERALY impossible to procure the amount of capital (nether the less find the stock) for all of these SKUS to withstand 28 days of sales MINIMUM. Completely asinine
Seller_olOtvIaZSSmYt
I agree wholeheartly with everything said in this post.. Unfortunately nobody in Amazon will care, I've paid millions at this point between all my accounts.
The most egregious out of all of these is the double dipping of the low inventory fee. I dont believe many sellers comprehend how catestrophic this is going to be for anyone that has a semi large catelog. We carry well over 2k SKUS, it is LITERALY impossible to procure the amount of capital (nether the less find the stock) for all of these SKUS to withstand 28 days of sales MINIMUM. Completely asinine
Seller_vQrMnPKQlwPaI
Completely agree. It's incomprehensible. Unless by strategic decision, Amazon decided to remove many from the business, which was already quite dubious before these latest fees.
Seller_vQrMnPKQlwPaI
Completely agree. It's incomprehensible. Unless by strategic decision, Amazon decided to remove many from the business, which was already quite dubious before these latest fees.
Seller_JUzllISOgHLP6
This is a very helpful and insightful post. Thank you for not simply complaining but actually explaining.
Our brand has always been glad to sell on Amazon and has understood that the fees brought us access to a big marketplace. These fees don't help us get access to a broader market; it's getting less for more.
Moderators, I hope you're reading through these threads and sharing the feedback.
Seller_JUzllISOgHLP6
This is a very helpful and insightful post. Thank you for not simply complaining but actually explaining.
Our brand has always been glad to sell on Amazon and has understood that the fees brought us access to a big marketplace. These fees don't help us get access to a broader market; it's getting less for more.
Moderators, I hope you're reading through these threads and sharing the feedback.
