As is an annual tradition, Amazon has just announced its latest FBA fee updates for 2021. To make up for Amazon totally screwing over sellers over the last several months with ASIN limits, storage limits, huge delays checking in inventory and overall logistics madness, Amazon was so kind as to delay the usual annual fee updates by 3 months. How kind, right?
In this fifth annual fee increase review, we'll get past the Amazon bias and take a look at what the fee increase really means and reveal who's going to be impacted the most.
Summary of Amazon 2021 Seller Fee Changes
- There's a median increase of 4.4% for standard size items.
- There are minimal to no increases for oversize items due to the elimination of the 1pound packaging weight
- There are some big savings in certain categories, for example:
Small Standard size items weighing 12 to 16 ounces get big savings of up to 48% as they're now classified in their own category and no longer pushed to the 1-2 lbs category due to packaging weight.
Large Standard Size Items over 3 lbs have savings of 4.5% to 7.0%
- Amazon eliminated the 4ounce packaging weight for standard size items and the 1 pound packaging weight for oversize items
- No referral fee changes except for a few categories (full-sized appliances, personal computers, and veterinary diet food)
- No increases to storage rates
Amazon 2021 Fee Increases – Standard Size Items
Standard size items are increasing a median amount of 4.4%. Amazon has gotten rid of the 4 ounce packaging weight it previously applied to all items. The result has been that items in the 12 to 16 ounce category are seeing massive fee decreases of 47.6%.
Amazon also decreased the weight surcharge for large standard size items weighing 3 to 20 lbs. The savings equate to 4.5% to 7.0% depending on the weight of the item.
Related reading: The Ultimate Amazon FBA Fee Calculator
Amazon 2021 Fee Increases – Oversize Items
Amazon has eliminated the 1 lbs packaging weight for oversize items. The result is that most oversize items will see minimal to no fee increases for 2021.
Increase in Storage Fees for 2021
Good news – this year there's no increases to storage rates which is a sigh of relief after Amazon's large storage fee increases in 2020 of 8.7%
Increase in Removal Fees
Amazon is increasing removal fees by a lot – a median increase of 28%.
Amazon Historical Increases from 2014-2021
Want to see how rates have increased (or decreased) over the last several years? Here's a snapshot.
Below are the historical increases for oversize items.
What Should You Do Going into 2021?
In summary, here's a good plan of action going into 2021:
- These fees are relatively small, but you don't want to fall into the trap of death by a thousand papercuts. Adjust your profit margin calculations appropriately for the 4-5% fee increases.
- Determine if you have any items in the 12 to 16 ounce category. You may be able to decrease prices or leave them as is and benefit from the increase in profits
- Remove any unfulfillable inventory before June 1, 2020
- Brace yourself for big fee increases in 2021 (Amazon seems to alternate between years of big increases and minimal increases)
The 2021 Amazon fee increases are minimal. This is some sigh of relief but unfortunately logistics problems both with Amazon specifically but also generally across the world mean large cost increases have snuck in for most of us sellers. Take the time to carefully examine your profit margins and make some hard choices regarding potential price increases.