All 2024 Amazon Fee Changes Explained

There are a lot of Amazon fee changes coming in 2024. In a mass email sent out to sellers, Amazon explained all of the changes…but it was still very confusing. So in this article we want to break the changes down, to make them easier to understand.

Calculate Your Fees for 2024

We’ve built a calculator inside a Google Sheet (it also works in Excel). While it’s a good idea to understand what the different fees are and how they affect your account, you can also just calculate Amazon’s fees for each one of your SKUs.

Here’s a video on how to use the calculator:

But that’s just the tool, it’s still important to make sure you know what the fee changes are and how they can affect your account–because there are a lot of changes.

Changes at a Glance

The TLDR of the changes are summarized below, with more detailed explanations following later in the article. Here are the highlights from the letter Amazon sent out to all sellers:

• FBA fulfillment fees (shipping the product to the customer) are generally decreasing
• Inbound and removal shipment fees (sending product to and from Amazon) are generally increasing
• Storage fees for having too much or too little inventory in stock are increasing
• Standard storage fees are generally decreasing
• All other fees are generally becoming more flexible

These changes generally reflect Amazon’s program changes regarding logistics. While Amazon has added a bunch of program options for storing and fulfilling your products, the actual last-mile logistics for Amazon hasn’t changed much in the last couple of years.

However, Amazon has changed how much of an emphasis on appropriate inventory levels, since they want every product to be as close to every customer as possible. So, even though Amazon doesn’t want you to have too many units in stock, they also will penalize you if you have too few units in stock.

In fact, most of Amazon’s logistics changes in the last year or two have been to streamline getting products in-stock as fast as possible. You might have noticed that inventory processing during Q4 of 2023 was much more efficient than in previous years. Let’s dig into some of these other fee changes.

Fee Changes for Low-Inventory Levels

Amazon has a ridiculous obsession about getting products into customers’ hands as fast as possible. During 2023, many regions with a warehouse within 100 miles of customers saw a decrease in fulfillment time from 2-day delivery to 1-day delivery–then from 1-day delivery to same-day delivery. And Amazon wants to make this the standard for all products.

But in order to do that, they need to have all products in-stock at all warehouses. With that in mind, there are two fees to be on the lookout regarding stocking-up your product:

Inventory Placement Fee

When you create an FBA replenishment shipment, you have the option to send the whole shipment to one (1) warehouse, or to break the shipment out into multiple, smaller shipments, that are sent to multiple warehouses throughout the nation.

If you choose to ship to only one warehouse, Amazon will break the shipment out anyway, and then charge you for distributing the product shipments to other warehouses.

This fee has actually been around for a while, but it’s being highlighted here to demonstrate that they want you to have your products distributed to as many warehouses as possible.

Our recommendation is that you should usually have Distributed Inventory Placement enabled in your fulfillment settings in Amazon. If you’re going to get charged either way, at least you can have the benefit of faster processing times by breaking it out yourself.

Low-Inventory Fee

If your inventory levels are too low, then Amazon can’t have your product in-stock at every warehouse, which means they can’t fulfill products as fast.

To combat this, Amazon’s implementing a “low storage” fee, meaning they’ll essentially charge you for the difference of having to ship a product farther because it was out-of-stock near the customer who ordered it.

This is wildly dumb, but it is what it is, too. And all this means is that you just have to make sure you have your products in-stock at the recommended levels at all times, if possible. Which shouldn’t be as difficult anymore, given Amazon’s efficiency increases in inventory processing.

In both cases, the goal here is to always keep enough stock in Amazon at all times. You’re penalized with fees, otherwise.

FBA Fee Decreasing

With Amazon pushing for more greater in-stock rates, the cost of getting the product to customers is actually going down for Amazon. If every product is at every warehouse, Amazon spends less on fulfillment.

As such, Amazon’s actually decreasing the fulfillment fees, on average, from $0.20-$0.61 per unit. This means that the number next to your price in seller central will actually go down.

In general, Amazon’s FBA fees will go down for most sellers. But the key here is that Amazon is getting specific. The actual possible discount range for FBA fees is $0.04-$1.32, and how much of that discount you end up getting is dependent on:

• How much your product weighs
• The size of your product
• Whether you participate in the Ships in Product Packaging (SIPP) program

We don’t anticipate the cost savings from the reduced FBA feel will be major for most sellers, but with FBA fee increases over the last several years, any cost savings are important. This is also a good opportunity to look at ways your brand might be able to reduce the size and weight of your product to save even more on FBA fees.

Storage Fees Decreasing

Amazon is reducing non-peak monthly storage fees. That “non-peak” is key. Because the fee reduction will not apply to October-December storage fees.

Amazon storage fees are generally not very expensive, as long as your inventory is less than 6 months old. And given that many sellers are going to be increasing their inventory levels next year with the new rules, it’s likely you won’t see a noticeable difference in storage fees.

Also, note that Amazon is not reducing long-term storage fees. So it’s still important to make sure that your inventory levels aren’t too high.

New Return Processing Fee

Amazon snuck a paragraph in at the end of the letter to sellers concerning a new Returns Processing Fee. This fee is important because Amazon is now adding a new metric for sellers to be aware of: High Return Rate.

For years, Amazon has been implementing tools for sellers to check how many returns they’re getting on each of their products. And products that have been negatively reviewed, or had a high order defect rate, have received penalties.

Now, Amazon’s going to quantify that penalty. For “high return rate” products, sellers will need to pay a “return processing fee” for each return that is made by a customer.

It’s important to note that it looks like there will be no return processing fees for product that have a “normal” return rate. Only high return rate items receive the fee.

And this brings into question what a high return rate even is. Unfortunately, Amazon doesn’t tell us. They just outline what the return fees are–and for most products, you can expect an increase of anywhere from $1.78-$5 per return.

This fee is also in addition to Amazon’s removal order fees. Which means that on a $20 product, you’re looking at a fee that could be up to 25% of your sale price.

You can find Amazon’s Return Processing Fee schedule here.

Other Fee Changes

In their letter to sellers, Amazon highlighted other recent, as well as future fee changes. Most of these are small changes, but they’re worth a mention–especially if you participate in relevant programs.

Reduced Vine Fees

A few months ago, Amazon reduced their fees for Vine enrollment.

Vine is a program that allows sellers to provide free product to reviewers in exchange for reviews. It’s Amazon’s only sanctioned way of generating reviews for new products. And historically, it’s cost $200 + the units you provide for free.

You can enroll up to 30 units in Vine for each eligible product. And the recent change allows for sellers to enroll fewer units and pay reduced fees (there’s no fee if you’re only enrolling 2 units).

Because reviews are so important, we recommend sellers utilize all 30 units eligible for Vine. So we think this new fee structure is unimportant.

Reduced Referral Fees for Apparel

Most categories on Amazon have a referral fee of 15%. Apparel has a referral fee of 17%, and that can make selling apparel on Amazon very challenging.

However, if your product is less than $20, you’re looking at reduced referral fees. The new referral fee schedule for Apparel looks like this:

It’s a pretty niche fee reduction, but it’s not nothing. But if you sell socks, this may be your chance to actually make money on Amazon.

But make sure your socks are priced at $14.99.

Multi-Channel Fulfillment Fee Increase

In a separate email, Amazon sent out fee increases for Multi-Channel Fulfillment (MCF) orders.

From what we’ve seen, the rates associate with MCF have not been super competitive, so this change is not surprising. However, if you’re using Amazon as your sole logistics provider (more on that later), this fee increase could be a really big deal for you.

Where is This All Going?

All told, these changes constitute a major restructuring for Amazon’s fees. And the question is, why? And there are really two parts to that.

Supply Chain by Amazon

Amazon now has a full service supply chain program called Supply Chain by Amazon. This is the umbrella term that encapsulates the following smaller programs:

• Amazon Global Logistics (AGL): This is Amazon’s logistics program for bringing international shipments to the US marketplace.
• Amazon Freight: This service allows for brands to purchase Full Truck Load (FTL) shipments from Amazon.
• Amazon Warehousing and Distribution (AWD): This program is a network of bulk storage warehouses that offer long-term storage at discounted rates.
• Multi-Channel Fulfillment (MCF): As mentioned before, this programs allows you to fulfill orders from all your sales channels using Amazon’s warehouses and fulfillment infrastructure.
• Amazon Shipping: This is Amazon’s carrier program, where you can use Amazon instead of UPS, FedEx, or USPS. You manufacture and store your own products, but Amazon ships them for you.

With all of these new logistics programs that Amazon Sellers and Non-Amazon Sellers alike can access, Amazon has more segments of customers. As such, Amazon needs to break their fees out to more specific fees to appeal to more customers who don’t want to use all of their products and services.

One-Day Delivery

As mentioned at the top of this article, Amazon has always pushed for faster and faster delivery times. And Amazon wants to eliminate the bottleneck that sellers have been in the past.

With FBA and storage fees decreasing, and the new low-inventory penalties. Amazon’s ensuring that sellers always have inventory in-stock. And this means that Amazon can continue to push for delivery to customers in under 24 hours.

Although this means faster shipping times, this will likely mean higher fees in years to comer. And with Amazon’s pricing parity policy, this likely means that consumers and sellers will be paying for shipping that no one actually asked for, and that other platforms can’t compete with.

However, in 2024, most sellers who manage their inventory levels well, it’s likely there won’t be a significant change in fees. For a deeper look at all of the fees that Amazon charges sellers, check out this article here.