As an Amazon seller, it’s crucial to stay informed about changes in fees and policies that can impact your business. On March 1, 2024, Amazon introduced a new fee called the Amazon FBA “Inbound Placement Service Fee“, which reflects the cost of distributing inventory to multiple Amazon fulfillment centers close to customers. The new inbound placement fees are structured on a per-unit basis, with costs varying based on the item sizes. Sellers can opt for reduced / no fees by shipping to four different locations. Therefore, costs vary based on whether the shipment is going to the West Coast, East Coast, or Central regions.
Inbound Placement Options:
When creating a shipping plan, sellers can choose from the following inventory inbound placement options:
- Minimal shipment splits: Send inventory to a single location, and Amazon will distribute it across their network for a fee, which may vary by inbound location. This option offers the cheapest overall shipping costs but may result in additional fees per unit and potential FC transfers
- Partial shipment splits: Send inventory to multiple inbound locations for a reduced fee. This option offers a balance between cost and efficiency.
- Amazon optimized shipment splits: Free shipping but could lead to higher overall shipping costs due to multiple destination shipments.
The availability of these options depends on factors such as product types, quantities, existing inventory levels, and customer demand. While this can lead to increased shipping costs, it also presents opportunities for sellers to improve their inventory management and overall efficiency.
Pros:
- Reduced inventory storage costs by distributing items across multiple fulfillment centers
- Faster delivery times for customers due to closer proximity to fulfillment centers
- Improved inventory accuracy and reduced risk of stockouts
Cons:
- Increased shipping costs due to multiple shipments
- Potential for delays and lost items if shipments are not managed effectively
- Additional fees associated with split shipments
Fee Structure:
The Inbound Placement Service Fee is assessed based on product size tier, shipping weight, inbound locations, and the number of locations or shipments in your shipping plan. The fee will be charged 45 days after your shipment is received.
Standard-size product fees range from $0.21 to $0.68 per unit, while large bulky-size product fees range from $2.16 to $6.00 per unit, depending on the weight and inbound placement option selected.
Frequently Asked Questions:
- Will outbound fees be reduced with the introduction of the new fee? Yes, starting April 15, 2024, FBA fulfillment fees will decrease by an average of $0.20 per unit for standard-size products and $0.61 per unit for large bulky-size products.
- Are there any incentives for new sellers? New sellers who create and send their first shipment within 90 days of listing their offer will qualify for $400 in credits that apply to the Inbound Placement Service Fee.
- What happens if I don’t send my inventory to the designated fulfillment centers or send incomplete shipments? Misrouted or abandoned shipments will incur fees based on the actual shipments received and inbound locations, which may be higher than the estimated fees at the time of shipment creation.
- How can I reduce or avoid the Inbound Placement Service Fee? Sellers can use the Partial or Amazon-optimized shipment splits options to pay a reduced fee or no fee for sending inventory to multiple inbound locations. Fees may also be lower for shipments sent outside the Western part of the country.
The new Amazon FBA Inbound Placement Service Fee is designed to optimize inventory placement and improve delivery speed while reducing costs. Managing split shipments and placement fees on Amazon requires careful planning and execution. By understanding the fee structure and available options, sellers can make informed decisions about their inventory management strategies. Stay proactive, review your shipping plans, and consider utilizing tools like One Page Inventory to effectively plan your replenishment strategy. Try OPI for free today!
