user profile
Sign in
user profile

Inbound Placement Fees

by Seller_2nHKMJRUHkO90

I have been selling on Amazon for 10-years and sell $15million per year. I ship 1-2 full truck loads per week to amazon FCs. It used to cost about $600 shipping per full truck. Now it costs $600 shipping + about $3,000 inbound placement fee per truck. That's 6x more expensive per truck than it used to cost me just a few days ago. Why would Amazon increase the expenses for 3rd party sellers all at once like this? If they want to increase our fees, at least do it little by little so we have time to adapt. This is going to be so painful for my business and so many other businesses. It's an instant added $200,000+ expenses per year for me, and I don't know if I can operate in this new environment. I hope Amazon sees all the damage caused and decreases these inbound placement fees. If they doubled the shipping cost, that would be unfair, but to increase it 6-fold is just ridiculous.

Tags: FBA
1710
5327 views
92 replies
Reply
92 replies
Quick filters
Sort by
user profile
Seller_3qllv6SY8mdjV
In reply to: Seller_2nHKMJRUHkO90's post

Im a mere $5M seller, but I sympathize with you. It is as if Amazon doesn't know how to do their job, so they want us to be in charge of distribution. Sorry Amazon, we already pay a hefty 15% fee on top of the fulfilment fee, so distribution amongst their warehouses is 100% something they should be responsible for. In 10 years of selling I have never, never seen such an egregious fee hike. Really outrageous.

Reply
910
user profile
Dominic_Amazon
In reply to: Seller_2nHKMJRUHkO90's post

Hi @Seller_2nHKMJRUHkO90,

Dominic from Amazon here, want to provide some context.

The FBA inbound placement service fee for standard and large bulky sized products reflects the cost of distributing inventory to fulfillment centers close to customers. The fee is effective as of March 1, 2024.

When you create a shipping plan, you can select one of the following inventory inbound placement options:

  • Minimal shipment splits: You can send your inventory to the minimal number of inbound locations, generally to a single location, and we will spread inventory across our network on your behalf, for a fee. The fee may vary by inbound location—for example, there may be higher fees for shipments sent to locations in the West versus other parts of the country.
  • Partial or Amazon-optimized shipment splits: Send your inventory to multiple inbound locations yourself for a reduced or no fee. The reduced fees will depend on the number of shipments and inbound locations that you send your inventory to. For instance, if your shipping plan qualifies, you can select the inbound placement option to send your inventory to the optimal number of inbound locations recommended by Amazon, generally four or more locations, and pay no fee. If you select the placement option in which you send your inventory to a partial number of inbound locations, generally two or three, you will pay a reduced fee.

I do want to note:

  • On average, we will decrease FBA fulfillment fee rates for standard-sized products by $0.20 per unit and for Large Bulky-sized products by $0.61 per unit. These fees will apply starting April 15, 2024, the same date that the first inbound placement fees will begin to be charged. Products priced below $10 will continue to have an additional $0.77 discount on per-unit fees. Go to the FBA fulfillment fee rates page for more details.

Please let me know if you have any questions.

Best,

Dominic

Reply
3237
user profile
Seller_olOtvIaZSSmYt
In reply to: Seller_2nHKMJRUHkO90's post

Really dont know how to proceed forward from here, margins are going to be signifgantly cut. This New low inventory fee is going to make it worse for larger sellers

I was shipping around 10-12 pallets a week for anywhere from 440-600 dollars. I purchase product ahead of time on this pricing and a signifgant give room for mistakes and errors. To wake up and see my standard weekly shipment cost 5x, is something completely outrageous. I will take a loss on my upcoming obligations, but know Amazon - you are making your platform less competitive, less sellers on this platform will cause higher prices for your consumers and a mass exodus of users to other 3P marketplaces. Do not dig yourself a grave

Really hoping amazon wakes up and realizes this horrible mistake. This idea was made in a board room full of people so far removed from what a seller goes through in a day to day

Reply
870
user profile
Seller_WsdULSSIajCRd
In reply to: Seller_2nHKMJRUHkO90's post

I’ve had a similar experience and go into the overall effect these fees are having on my business here.

Battling FBA's Fee Frenzy: Navigating Placement & Inventory Charges in a $12M FBA Business

Reply
80
user profile
Seller_n1mh65Ij2NT7L
In reply to: Seller_2nHKMJRUHkO90's post

If Amazon is reducing FBA fees April 15, 2024, it will help. I'm sure Amazon spent almost if not more on intra FC shipments and processing them than we paid them. We'll survive it but prices across the board will have to go up. There's a lot of customers who really don't need or even want items delivered in a day or two. If Amazon had a local-to-the-seller FC as say, *home base* they could offer the items cheaper if the buyer was willing to wait a week. Perhaps they really would rather pay LESS and wait a little longer. I understand the next day delivery thing, but we get our own personal AZ orders in 2-3 days anyway. The question is: Can Amazon ship items between the FCs cheaper than UPS...

Reply
70
user profile
Seller_rr45B3vDsauwa
In reply to: Seller_2nHKMJRUHkO90's post

I can't agree more. This is cripling financially. Lots of businesses are going to go under due to this or have to leave Amazon.

Reply
150
user profile
Seller_ScGn03WhJ86cc
In reply to: Seller_2nHKMJRUHkO90's post

I have a genuine question for you. Assuming you've looked into utilizing the AWD program, what about it makes it not a viable option to reduce the fees of sending product into amazon? I've read some articles that these new placement fees are a way for Amazon to force businesses to use AWD, but there must be a reason why it's not attractive, or else businesses like yours would just pivot towards that. Again, this is coming from genuine curiosity, and is in no way supporting one way or the other.

Reply
50
user profile
Seller_WrMwp7lazozxc
In reply to: Seller_2nHKMJRUHkO90's post

Guess who didn't get impacted like that?!

The Chinese sellers.

That's all you need to know.

75% of 3rd party sellers are from China (and growing). They want to be Ali-Express. Clearly we are no longer part of their business model.

Reply
242
user profile
Seller_3RoLAuCqvb4QW
In reply to: Seller_2nHKMJRUHkO90's post

(1) "I have been selling on Amazon for 10-years and sell $15million per year."

Sales volume this much is the reason Amazon thinks you can still be squeezed.

(2) "It's an instant added $200,000+ expenses per year for me, and I don't know if I can operate in this new environment."

With sales volumes at 15M/year, why 0.2M/year more expenses is a big problem? It only accounts for 1.3% of your sales. What is your profit margin?

(3) Amazon mis-invested and built too many warehouses before the pandemic. Amazon will lose money if the warehouses are empty, but it also loses money when they are full with current fee structure.

Believe you me, the current FBA fee hike is meticulously calculated, and 6X fee hike is about the break even to drag its FBA services out of loss.

(4) Don't worry. Amazon does not want to kill all the sheep in one year. It will scale the fee hike back a bit. But the fee hike is the long-term trend. Better be prepared earlier rather than later.

Reply
314
user profile
Seller_3RoLAuCqvb4QW
In reply to: Seller_2nHKMJRUHkO90's post

Elon has no appetite for a new Amazon, because Amazon sales does not really earn a lot of money. It's all beautiful sales numbers; they don't bother to mention the net profit.

user profile
Seller_0737vXk8LFiLc
Show post
Until a new Billionaire decides to open a New Amazon
Reply
20
Go to original post

Similar Discussions