As of March 1, 2024, Amazon has introduced an Inbound Placement Fee for those utilizing Fulfillment by Amazon (FBA), a move aimed at enhancing the efficiency of its delivery network by strategically placing your inventory closer to your customers. This initiative promises not only to speed up delivery times but also to lower shipping costs for you. Let's break down how this new fee structure affects your shipping plans and what you can do to manage its impact.
Your Options with FBA Inbound Placement Service
When you're setting up a shipping plan, Amazon now offers you different options on how your inventory can be distributed across its fulfillment network, each with its associated costs:
- Minimal Shipment Splits: You have the option to send your inventory to as few locations as possible, typically just one, after which Amazon will take the responsibility of spreading it across its network. This convenience comes with a fee, which varies depending on the destination within the country. For instance, sending inventory to the West may cost you more.
- Partial or Amazon-Optimized Shipment Splits: If you're willing to handle the distribution yourself, you can send your inventory to multiple locations, potentially qualifying for reduced or no fees at all. By adhering to Amazon's recommendation of distributing to four or more locations, you could avoid the fee entirely. Distributing to two or three locations, however, will result in a reduced fee.
The best choice for you will depend on factors such as the types and quantities of products you plan to ship, your current inventory levels across Amazon's network, and where your customers are located.
How the Fee Affects You
The Inbound Placement Fee you'll encounter is determined by a combination of factors that you'll see outlined in a fee table when creating your shipping plans. These factors include:
- Item Size: Your items will be categorized as small standard, large standard, or large bulky.
- Weight: The fee calculation will consider the unit weight for small standard items and the greater of dimensional weight or unit weight for larger items.
- Number of Locations Tier: The fee adjusts based on whether your shipment is minimal, partial, or optimized according to Amazon's guidelines.
- Inbound Location: Fees also vary by the destination of your inventory, with some regions costing more than others.
Understanding these factors is crucial for you to strategically plan your shipments to minimize fees and keep your costs in check. This new fee structure emphasizes the importance of efficient inventory management and planning, encouraging you to think strategically about how best to distribute your products within Amazon's vast fulfillment network. By considering the implications of each option, you can make informed decisions that balance cost with the benefits of faster delivery to your customers. We’ve build a comprehensive Amazon Fee Calculator to help you understand the impact of all Amazon fees - including the FBA inbound placement fee - on your business. Get your free copy by clicking here.
If you would like to see how the new inbound placement fees affect your profitability, try 3fin for free! 3fin provides you with a detailed breakdown of every Amazon fee and gives you strategic insights to boost profitability.
