Amazon Fees – Turning Amazon’s 2024 Fee Hike into Your Competitive Feast

Selling on Amazon is evolving, especially with the fees on the rise and two new ones coming in 2024 that you’ve got to watch out for. It’s shaking things up for everyone.

However, if you’re diligent and plan better than your competitors, you’ve got an edge. While they’re busy complaining about these fees, you’ll be finding ways to reduce yours and operate more efficiently, essentially eating their lunch.

Let’s get familiar with these fees:

Referral Fee: This is Amazon’s cut for each item you sell, usually a straightforward 15%. It’s their “thank you” for using their platform.

Selling Plan Fees: There are two paths here. If you’re a pro seller, you’re looking at a monthly fee of $39.99. For individual sellers, those selling 40 units or less a month, it’s $0.99 per sale, without a monthly charge.

Fulfillment Fee: For FBA sellers, this fee covers Amazon’s packaging and shipping costs, varying by your product’s weight and size. A tip from my playbook: focus on items under 1 pound to avoid higher fees.

Storage Fees: These are based on the volume your inventory occupies in Amazon’s warehouses. Be wary; fees ramp up from October to December (approx. x3 as high).

Refund Administration Fee: If a customer requests a refund, you’ll face a fee of $5 or 20% of the refunded amount, opting for the lesser.

Removal Order Fee: When it’s time to retrieve some of your inventory, the cost depends on the item’s weight. Lighter items will, thankfully, cost you less.

Starting March 2024 introduces Placement Fees, marking a new chapter in how you send items to fulfillment centers. To minimize this fees, plan more SKUs and more units when restocking so Amazon can split your inventory to more fulfillment centers and save you money. So far, I’ve managed to send in a lot of inventory for $0 placement fees which could’ve cost us thousands of dollars if not well planned.

And then there’s Low Inventory Fees starting May 2024; if you’re running hot but your inventory doesn’t last 30 days, Amazon will make you pay for it.

So, 2024 is all about mastering the art of fee navigation on Amazon. It’s your turn to plan smarter, not harder. While your competition laments over fees, your strategy will be to trim yours down, streamline operations, and yes, eat their lunch.