There’s a new cost of doing business from Amazon coming in 2024, a Low Inventory Level Fee which will initially kick in on Amazon.com from the 1st of April 2024.
We will introduce a low inventory level fee for standard-sized products. The fee applies if you carry consistently low levels of inventory relative to unit sales, as this inhibits our ability to distribute products across our network, degrading delivery speeds and increasing our shipping costs. Sellers can avoid this fee by maintaining more than four weeks of inventory relative to sales.
– Amazon
This is part of Amazon’s drive to improve speed of delivery and reduce total costs. The rationale is that with low inventory levels, Amazon can’t adequately distribute your inventory efficiently around the US and so with low inventory, when an item sells it costs more to deliver.
This is part of a wider set of fee changes coming in in 2024, which Amazon say will on average see sellers paying $0.15 more per unit sold, which they are eager to point out is significantly less than the increases announced by other logistics providers.
Other changes include an inbound placement fee for standard and Large Bulky-sized products to reflect Amazon’s cost of distributing inventory to fulfillment centers close to customers. However you can reduce or avoid this fee, kicking in from the 1st of March, if you send your shipment to multiple locations.
The fee changes include:
- Inbound placement service fee for standard and Large Bulky-sized products
- A decrease in FBA fulfillment fee rates for standard-sized products by $0.20 per unit and for Large Bulky-sized products by $0.61 per unit
- A fulfillment fee discount ranging from $0.04 to $1.32, depending on item size and weight, for eligible products in the Ships in Product Packaging
- The low inventory level fee for standard-sized products
- Reduction in the non-peak monthly storage fees for standard-size products by an average of $0.09 per cubic foot
- Reduction in referral fees for apparel products priced below $20
- New, lower pricing structure for Amazon Vine
- Expanded benefits as part of the US FBA New Selection program
- Updated rates and new benefits for Supply Chain by Amazon
- Increased granularity and rates for the storage utilization surcharge
- Increased removal and disposal fees
- Increased aged inventory surcharge
- Increased prep service fees
- A new inbound defect fee
- New size bands
You’ll find a detailed summary of all the 2024 fee changes in Seller Central.
