Amazon inflation surcharge will be permanent with 2023 FBA fee hike

Amazon will make a fulfillment upcharge introduced for inflation permanent in 2023, as the ecommerce giant makes a series of increases to fees in its program that provides logistics for third-party sellers.

Fulfillment by Amazon (FBA) provides storage, processing and shipping services for seller orders, making Amazon's logistics network available to the merchants that sell on its marketplace. Such services also have a growing importance to Amazon's business, as the third-party marketplace provides an expanded selection for Prime members, as well as revenue earned through both sales as well as shipping orders. According to Marketplace Pulse, Amazon fulfillment fees increased 30% between 2020 and the third quarter of 2022. In 2023, they are set to rise again.

Amazon VP of Worldwide Selling Partner Services Dharmesh Mehta announced the following changes to fees in the Fulfillment by Amazon (FBA) for 2023:

A 5% fuel and inflation surcharge that was introduced in April was advertised as being a temporary fee at the time to account for rising transportation costs. But now, it will be factored into overall rates, effectively making it permanent.

“These cost increases have not attenuated as quickly as we had hoped, so we will adjust our standard FBA fee rates to account for these increased and supply chain costs and we will remove the separate Fuel & Inflation Surcharge at this time," Mehta wrote.

FBA fees will be changing in part as a result of observed inefficency patterns by the company.

“This year, we saw some sellers use more of our storage than we expected or believe was needed to serve customers well, and that constrained how much product from other sellers could be sent into FBA,” Mehta wrote.

The company is making the following fee changes:

FBA outbound fees are increasing by $0.22 on average.

For apparel, the company is creating a new weight tier that will use the greater of unit weight or dimensional weight to determine the shipping weight for all large, standard-size products.

Returns processing fees for apparel and footwear will decrease by an average of $0.20 per return.

Off-peak storage fees for standard-size products will increase by $0.04 per cubic foot and $0.03 per cubic foot for oversize products.

Peak storage fees for the non-sortable network will increase by $0.20 per cubic foot. Sortable fees will remain unchanged.

A storage utilization surcharge will be introduced for sellers who have “a high cube of inventory stored in our fulfillment centers relative to the cube of their recent weekly sales.” Amazon estimates that 7.5% of sellers will be affected by this change, which takes effect April 1, 2023.

Inventory surcharges will be increased for items stored 271-365 days.

Aged inventory surcharges will be introduced for inventory stored 180-270 days in the categories of apparel, shoes, bags, jewelry and watches.

Removal and disposal fees will increase.

The U.S. FBA New Selection program will have reduced fees. A rebate on sales for eligible new-to-FBA parent ASINs will decrease from 5% to 10% on average. The New Selection program aims to incentivize sellers by offering free monthly storage fees of up to 50 units for 90 days.

The Small & Light program will expand (again) by increasing the item price for eligible products from $10-or-less to $12-or-less. This will allow more sellers to access the lower prices in this program, which provides lower prices for shipment of small items.

More details can be found here.