Placement fees 12x my UPS fee!!
I am shipping a box of 400 units of a very small product to Amazon's fulfillment center. $12 per piece retail. The box dimensions are 18x12x12 for the entire shipment. 5lb box. The cost to use UPS to ship the box to Amazon is $7. With the new placement fees, they are charging me an additional $84! So what used to cost me $7 to ship now costs me $91! This is a 12x increase in costs.
To add to that, I am not given the option to spread the units myself to avoid that fee. Outrageous. And the fact they don't take price, size or weight into consideration is unbelievable. It's either over 20lbs or under. But will charge just as much if the product is $12 and weighs less than an ounce vs someone who's item is 12lbs and retails for $700 each. Unreal. They want you out of business people, its clear as day.
Placement fees 12x my UPS fee!!
I am shipping a box of 400 units of a very small product to Amazon's fulfillment center. $12 per piece retail. The box dimensions are 18x12x12 for the entire shipment. 5lb box. The cost to use UPS to ship the box to Amazon is $7. With the new placement fees, they are charging me an additional $84! So what used to cost me $7 to ship now costs me $91! This is a 12x increase in costs.
To add to that, I am not given the option to spread the units myself to avoid that fee. Outrageous. And the fact they don't take price, size or weight into consideration is unbelievable. It's either over 20lbs or under. But will charge just as much if the product is $12 and weighs less than an ounce vs someone who's item is 12lbs and retails for $700 each. Unreal. They want you out of business people, its clear as day.
28 replies
Bryce_Amazon
Good morning @Seller_wta8uqcroFHRK,
Inbound placement options will be provided only when your shipments qualify. Factors that affect the number of inbound options include the following:
- Whether your shipment includes a mix of standard-size items, non-standard-size items, or special handling categories
- Whether each box contains the same mix and quantities of SKUs
- Quantities and number of boxes for each item
- Geographical demand
To maximize the number of inbound options, try the following:
- Create separate shipments for standard-size items, non-standard-size items, and each special handling category
- Ensure that the item mix and item quantities are equal across all boxes
- Increase the number of boxes
For more information, go to "2024 FBA inbound placement service fee".
I realize that you are sending 400 units of the same item, so some of the above suggested adjustments may not be possible. I do also want to draw your attention to the upcoming fee decrease, which goes live in conjunction with the Inbound placement fee charges going live:
"On average, we will decrease FBA fulfillment fee rates for standard-sized products by $0.20 per unit and for Large Bulky-sized products by $0.61 per unit. These fees will apply starting April 15, 2024, the same date that the first inbound placement fees will begin to be charged. Products priced below $10 will continue to have an additional $0.77 discount on per-unit fees. Go to the FBA fulfillment fee rates page for more details."
Thank you for your feedback, please let me know if you have any additional thoughts.
- Bryce
Seller_SiuK8J4LewyTy
We too were SHOCKED at this additional placement fee to our shipment yesterday! It has doubled our FBA cost, which is outrageous. Selling on Amazon is no longer a feasible retail option and we are also questioning their motive. The fee decrease and discounts described by the Amazon rep does not make sense - "These fees will apply starting April 15, 2024, the same date that the first inbound placement fees will begin to be charged." but we were charged the placement fee yesterday on 3/21/2024. So will we be reimbursed?
Seller_Ha6JyVvDK6Ybs
Now you also need to worry about low inventory or they will add even more fees but then again who on Amazon selling is here to make money we are taking loss on 90% of items sold just because we are done and eliminating entire business and items we should be making money we get high pricing error so F it.
Seller_T2QM2RkQKZ2bn
Indeed, our profit margins on Amazon have been steadily decreasing. We're feeling the pressure, being squeezed out, and running dry financially.
Seller_J5FUJobUMLfvl
get used to it
Amazon does not care about your workload or profit margin.
Seller_BiV649kw4h9T1
ship 5 cases or more at a time, then you dont have to pay placement fee. or split your case of 400pcs into 5 smaller cases and ship to 5 different FCs if that saves u some $
Seller_EP0tunIRkIqMQ
If you calculate the $.20 cents per unit FBA fulfillment cost reduction savings, you will have $80.00 less in FBA fees. So your increase in costs is only $11.00 or $.0275 per unit on your 400 units or less than a .25% (yes 1/4 of 1 percent) increase in fulfilment costs. We were taken aback by the additional costs as well at first, but have changed our shipping process which has limited our fee increases. We will ship in 4 separate shipments, when possible, which gives us no placement fees, but increases our inbound shipping due to the different destinations. But this is normally offset by the fee reductions.
Seller_uItZ6gBdiQ481
I feel your pain and Bryce from Amazon copy/pasted the same answer to me.
I just created a shipment with 28 skus in 4 different boxes and I did it 2 ways- the first was by putting all the units with the same skus in 1 box, this cost $100.80 in placement fees. So then I tried to make sure the item mix and item quantities are equal across all boxes as suggested and guess what? The same fee of $100.80. So my item that use to cost MAXIMUM $0.05 per unit to ship now costs $0.27 per units to ship. That is a 440% increase. How do you think that is sustainable on an inexpensive item? If I increase my price, I won't have the Buy Box anymore because my other retailers off Amazon will be selling it cheaper. What is wrong with this picture?
Seller_HEe7QtbRbk5qC
I had the same panic initially. But then I did the math on the FBA reduction and it's pretty much a wash.
For you, with 400 items, the FBA fees will be $80 less at 20 cents each. Subtract that from the $84 you're paying in placement fees.
Net difference is $4 more to you -- or 1 cent per piece.
Still not zero, but not as bad as I feared initially.
Seller_6uwr4mP8CnJup
BEFORE: ship in parcel at around ~$8-$10 a case for 8 - 12 cases a time for east coast single location. If I needed to ship in 15 or more cases I'd do a LCL pallet for ~$100-150 (was usually a more economical breakpoint).
NOW: East coast single location around ~$28 a case with placement fee (almost 3x). LCL is almost just as expensive single location pallet is ~$250 and optimized location for pallets is out of question for this volume. Best i could do was try a bunch of different case quantities for parcel (4 - 24) and was able to get around $12 (divided cost per case average) with Amazon optimized location (no placement fee) (usually 4 - 5 separate shipments). A slight annoyance having to generate and print so many different shipment labels.
I would consider AWD but they only offer CA warehouse destination which is >$300 a pallet from east coast. Not any better of a solution with warehouse so far away.
I know they are advertising the discount on fulfillment, but personally I'd rather put the fee on fulfillment for an easier send to Amazon flow. I really thought that how it was before was some of the best it's been from years prior... It seems that Amazon-optimized is the best option for lighter and smaller goods. Heavier and bulkier goods will hit harder on the distance shipments which might mean single location would be the cheaper option.
In your case I'd recommend getting a new packing template going that gets you 4+ cases per workflow and only shoot for Amazon-optimized (this seems to be the min number to possibly get offered Amazon-optimized).
