This year's Amazon fee increases will be on track, and Amazon fees 2022 will be among the largest increases in Amazon marketplace costs for sellers in contrast to the previous two years.
Amazon announced the planned adjustments in a post on Seller Forums in December, stating that the first rise in Amazon Seller Fees would begin on January 18, 2022, with Amazon's FBA fulfillment charge changes.
Despite the dissatisfaction of some sellers with the adjustments, Amazon fees remain an unavoidable part of doing business on the platform. So, if you want to keep making money in 2022, you will have to find a way to adjust.
We'll break down the most significant changes to Amazon selling fees, giving Amazon Sellers all they need to know to prepare for the Amazon cost rises in 2022.
What are the new Amazon Fee 2022 Changes?
Every year, Amazon's FBA seller fee changes, and 2022 is no exception. The announcement, however, came several months later than usual, giving sellers little time to consider the impacts and make business decisions.
As is customary with Amazon, the rise is attributed to "higher levels of service and more expenditure necessary for higher fulfillment volumes." While we congratulate Amazon for making things a little simpler for sellers and buyers, the issue remains as to how this adjustment will impact sales.
FBA sellers have been assured that their sales would be largely unaffected. After all, orders completed outside of Amazon FBA are still 30 per cent lower.
Despite this, many vendors are nonetheless concerned about the ongoing cost increases. Despite Amazon's claim that the charge increase is required to reduce the time and effort required to complete orders, the proposed adjustment is still a significant increase.
Storage costs, new aging inventory parameters for surcharges, and adjustments to shipping and referral fees are all part of the rising cost of selling on Amazon.
Across the board, Amazon seller fees will vary (in most cases, rise) in all five of the following categories:
· Referral Fees
· Removal & Disposal Fees
· Small & Light Fees
· Storage Fees + Aged Inventory Surcharge
· Fulfillment Fees
Why is Amazon increasing their fees?
Given the yearly increase in FBA seller fees, it may appear that Amazon FBA is getting increasingly expensive for sellers. However, many financial difficulties, including personnel, storage, and fulfillment expenses, are handled by Amazon FBA on behalf of sellers.
Yes, these charges cover the seller's portion of the transaction. Yes, the price increase is required to make Amazon viable and to ensure that promised services are provided to customers and sellers.
5 Major Changes To Amazon Fees 2022
1. The average increase in FBA fulfillment fees will be 5.2 per cent, with fees and percentage increases across all size categories from standard to large.
2. The cost of storing your things on a monthly basis will skyrocket.
· From January through September, storage prices for standard and large items will increase by around 10.5 per cent, with no increases during peak months (October to December).
3. Removal and disposal fees have risen significantly.
· You should expect removal or disposal order fees to increase by more than double the prior fee for every product size (except the smallest).
4. Products weighing up to 3 pounds can now be included in the small and light program (used to be 12 oz max).
Finally, referral fees will be mostly unchanged, with the exception of lawnmowers and snowblowers, which will see a reduction.
How does it affect my business?
The 2-3 per cent average price rise, according to Amazon representatives, should not have a significant impact on Amazon FBA brand owners. Indeed, when it comes to delivering logistics to Amazon sellers, the platform remains one of the most cost-effective.
Additionally, having a business that is not only more visible on Amazon but also more appealing to a possible Amazon aggregator or Amazon roll-up firm has its advantages.
Larger and heavier objects are the most affected by the adjustments. Not sure if your company fits into this group, and if so, what can you do to offset some of these expenses? Keep reading on.
Learn more about How to Start an Amazon FBA Business
What can be done to minimize the effect of this price increase?
While the fee rise and reduced profit margins are unavoidable, there are things you can do to minimize the impact on you. If you need help, here's a list of suggestions to help you cope with Amazon's FBA charge increase.
· Take advantage of borderline product weight qualifications
If you analyze the Amazon FBA charge levels closely, you'll see that each category has very little change. You may take advantage of this by modifying your packaging.
Unlike physical stores, Amazon FBA products do not have the option of using larger, more practical bags and boxes. Instead, you'll want packaging that's as small and light as feasible.
Also, if you have any hefty fillers, stuffers, or cards, get rid of them. These little changes may have an influence on the overall size and weight of your product, allowing it to be put in a lighter category and hence attract lower Amazon FBA prices.
Consider deconstructing your goods before delivering them if at all possible; this will save you money on FBA costs. But don't forget to provide assembly instructions for your consumers!
· Manage your inventory
Amazon encourages its sellers to limit their products to a bare minimum in order to make the most of their storage capacity. We recommend using the same method if you want to save money on Amazon FBA expenses.
Check your things to see if any are taking up too much space or aren't selling quickly enough to avoid spending too much on storage. That's not to say you shouldn't maintain a slow-moving product if it makes a big contribution to your profit margins.
It could be time to get rid of a product that has been languishing on your shelf for far too long. If you take this route, don't count on Amazon to sell your items. Given how strict Amazon is about inventory management optimization, there is a cost for this service as well.
· Unfulfillable products
Take inventory of what you already have in your Amazon FBA warehouse and determine if you have any "unfulfillable" items.
Are you unfamiliar with the term? Unfulfillable products are those that aren't in good enough shape to sell. These can include items that are broken or malfunctioning, as well as those that are returned in less-than-perfect condition. They will just take up space and cost you money if you leave them in the Amazon warehouse. Either sell them elsewhere or dispose of them according to the manufacturer's instructions.
Contacting the manufacturer is another option for dealing with unfulfillable products. If the faults were caused by the shipper, you might be eligible for a refund. Worst-case scenario? You can obtain a partial refund if you return the products to the manufacturer.
· Record your product dimensions accurately
One of the simplest ways to lose money on Amazon FBA is to list a product with wrong measurements. This is especially important now because the new cost is based on the size and weight of your product. You're paying more costs than necessary because Amazon believes your product is larger or heavier than it is.
Take the time to measure and re-measure your products, as well as correct any inconsistencies in product specifications on Amazon, to avoid this. This verifies that you haven't made any mistakes and that your products are in the appropriate category. Target the moderately overweight goods while you're at it.
· Audit your FBA invoices
Amazon isn't without flaws. They make mistakes from time to time, such as overlooking charges or making modifications that aren't quite appropriate. Keep a tight check on your invoices if you want to be sure every dollar you pay is accounted for.
Keep track of your own sales and fees. If you find any inconsistencies, lodge a claim. It may appear to be a lengthy operation, but believe us when we tell it is critical.
Are you curious as to why? Simple: You may appear to be losing a few bucks now, but you might wind up spending thousands of dollars in fees that you don't have to pay in the long term.
The best part about making claims with Amazon is that they are typically fair. Unless you don't have enough proof, you won't have to bother about addressing these allegations.
· Prepare everything in advance
Every Amazon FBA seller is aware that fees are charged by the fulfillment center for products that must be prepared prior to shipping. Pre-package and prepare everything so it's ready to depart the facility as soon as it's asked to save money on these costs.
Just double-check that you've got the right labels. If you do not follow these criteria, your products may be rejected or wrongly classified. Hiring an Amazon FBA prep company is one way to reduce the risk of error.
These companies specialize in Amazon FBA product preparation for a modest cost. And, sure, they're usually less expensive than Amazon FBA's in-house services.
In conclusion, the Amazon FBA charge rise in 2022 may appear to have a significant impact on your business. To be honest, it most certainly will if done poorly. That's why it's important to make wise decisions so that you don't lose a significant amount of money when the Amazon FBA bill arrives.
We hope that this post has given you a better understanding of the changes coming in 2022 and how you can prepare as an Amazon FBA seller to deal with them.