Top 5 Amazon News for May 2023

Amazon announcement:

“We would like to thank you for your continued partnership. We started 2023 with high fuel prices and inflationary pressure, and we have seen recessionary concerns arise in many places around the world. Despite these challenges, you have persevered and demonstrated tremendous agility, and together, we have served customers well.

We continue to invest heavily in people, technology, transportation and infrastructure to innovate on behalf of our selling partners. We do this while also working to be more efficient and manage our costs to serve you and customers, so that we can provide an amazing service that is also a great value. Today, we would like to share the updates that we are making to our Canada referral and Fulfilment by Amazon (FBA) fees that will take effect on June 30, 2023, except where otherwise noted.

1. Referral fees will remain unchanged with the exception of the Personal Computer category, increasing from 6% to 8%, in line with the rates for selling on Amazon.com. Referral fees provide sellers with traffic from hundreds of millions of customers, an attractive shopping experience for customers, payment processing, fraud prevention and much more. We will remove the following fee categories: Toys and Games – Collectible Cards and Sports Collectibles. Impacted ASINs will be re-categorized to their most suitable product category, which may result in different (some lower, some higher) fees for those re-categorized products. For more information, please visit: Fee category definitions.
2. Last year, we introduced a fuel and inflation surcharge for our FBA fees for what we believed might only be temporary cost increases. Although we have seen some decreases, elevated costs have generally persisted, so we will adjust our standard FBA fee rates to account for these costs and we will remove the separate fuel and inflation surcharge at this time. These changes are reflected in the below summary.
3. Last year, we saw some sellers use more of our storage than we reasonably anticipated was needed to serve customers well, and that constrained how much product from other sellers could be sent into FBA. As a result, we will make updates and create additional granularity in our FBA fees that continue to better align fees with our underlying costs. This will drive improved Inventory Health, more efficient use of our storage and create more capacity for sellers who are using space efficiently. For more information, please visit: 2023 CA Fulfilment by Amazon fee changes and 2023 storage fee changes. This includes five areas:

a. We will increase the monthly off-peak storage fee (January to September) for standard-size products by $3.00 per cubic metre and oversized products by $2.00 per cubic metre beginning on July 1, 2023. We will increase peak storage fees (October to December) for standard-size products by $9.00 per cubic metre and oversized products by $4.00 per cubic metre.

b. We will introduce a storage utilization surcharge for sellers who have a high volume of inventory stored in our fulfilment centres relative to the cube of their recent weekly sales. We estimate that this will impact approximately 6.6% of sellers who use the highest volume of storage relative to their sales volume. This change will take effect on September 1, 2023.

c. We will increase the surcharges applied to inventory stored over 365 days. This change will take effect for the July 15, 2023 aged inventory assessment date. We encourage you to check your aged inventory surcharge and take action on these products. These changes will help drive more efficient use of our storage and create more capacity for sellers who are using space efficiently.

d. We will increase removal and disposal fees driven by increased costs of these services. To learn how to configure your settings for automated removals, go to Remove inventory automatically.

e. We will increase FBA outbound fee rates by $0.27, on average, which is below fee increases announced by most logistics providers. As part of this, we will introduce more granular weight tiers for FBA outbound fees (at the 100-gram level) to better align fees with shipping costs.

4. We will introduce a monthly inventory storage overage fee beginning on August 1, 2023. Overage fees will apply if on-hand inventory in Amazon’s fulfilment centres, not including open shipments, exceeds your FBA capacity limits (new capacity management system launching on May 1, 2023). Overage fees are calculated based on the highest estimated or confirmed limit that we provided for the given period. Overage fees help prevent excessive inventory levels and shouldn’t affect sellers who maintain healthy inventory levels. To learn more, go to FBA inventory overage fees and FBA dashboard.

These changes are designed to allow us to collectively better serve customers while ensuring that we continue to provide you with a great value relative to alternatives. On average, these fee changes are below those announced so far by most logistics providers. In addition, Amazon’s fulfilment fees will remain an average of 30% less expensive than standard shipping methods offered by other major third-party logistics providers in Canada (…).”

ProMerit Tip: Keep in mind, these changes only go into effect for Canadian FBA sellers on June 30, 2023. Also, not all product categories are affected, so we will need to check whether it will have an impact on a case-by-case basis.

Some temporary fees will become standard as they have persisted over previous months, such as fuel for example. Other fees affected are:

• Fulfilment fees (envelope, standard, small, medium, large and special).
• Storage fees and aged inventory surcharge
• Referral fees (e.g. the referral fee percentage for personal computers will increase from 6% to 8%)
• Removal and disposal order fees (depending on shipping weight)

You can access Amazon’s platform to check each category and product to find out how it will affect your individual brand.