Amazon FBA Fees in 2020 Are Going Up A LOTDecember in Blog
As is an annual tradition, Amazon has announced its latest FBA fee updates for 2020.
In this fourth 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.
Quick spoiler alert – FBA fees in 2020, specifically storage fees, are going up A LOT.
Summary of Changes
- Non-peak storage rates are going up 8.7% for standard size items (ouch)
- Oversize storage rates (peak & non-peak) and peak standard size storage rates are unchanged
- BIG increases to removal fees for items over 2 lbs. Generally removal fees are going up 25%+.
- Standard size item referral fees are going up, on average, 3.6%
- Oversize items have no fee increases EXCEPT for medium oversize items which will have an increase of 14.7%
- There are NO new size categories this year—a popular way that Amazon has ‘snuck’ in big referral fee changes in the past
- Small and Light now charged based on weight, not item price
The biggest change is in Amazon storage fees. They’re getting one of their biggest increases in years, going up 8.7% for standard size items during January to September. That’s pretty significant.
FBA fees are, for the most part, experiencing only minor increases of around 3.6% for standard size items and nothing for oversize items UNLESS your items fall in the medium oversize category in which case you will see a whopping increase of around 14.7%.
Another big change this year will come to making removal orders for your items. They will go up over 25% in most cases and upwards of 50%+ in many others.
Amazon 2020 Fee Increases – Standard Size Items
On average, fees for standard size items are increasing 3.6%
The biggest increases are coming for small standard size items in between 10 and 16 ounces, which are going up approximately 5.7%.
Last year Amazon implemented some new size categories for standard size items (it broke up items under 1 lbs into two different categories). There will be no new size categories this year.
Related reading: The Ultimate Amazon FBA Fee Calculator
Amazon 2020 Fee Increases – Oversize Items
There are no increases to fulfillment fees for oversize items EXCEPT for medium oversize items. Medium oversize items will see a fee increase, on average, of 14.7%
As a reminder, a medium oversize item is essentially any package with its longest side 18-59″ and its median side 14-30″ and that weighs less than 150 lbs.
Increase in Storage Fees
Storage fees are the big increase for 2020 and are going up 8.7% for standard size items during non-peak (January to September).
Thankfully, peak rates are getting no increases and oversize items are also getting no increase.
Increase in Removal Fees
For the most part, if you’re removing anything over 2 lbs then you’re looking at a 50% increase in removal fees.
If you’re removing heavy oversize items you could be looking at removal fee increases over 650%!
These are big increases and raise the punitive damages for sending too much stuff into Amazon. Thankfully, it shouldn’t significantly affect the day-to-day P&L of most sellers though.
Miscellaneous Other Changes
Amazon is also making some other miscellaneous changes which are unlikely to affect the vast majority of sellers but may affect sellers in particular niches:
- The Small and Light program is moving to a weight-based categorization exclusively (previously there were different categories for items under $5 and above $5)
- Personal care items under $10.00 will have referral fees reduced from 15% to 8%.
- Outdoor furniture over $200 will have referral fees decreased from 15% to 10%.
The outdoor furniture category particularly may be some indication that there’s a void of competition here and a good opportunity for sellers, especially in light of the decreased referral fees.
Amazon Historical Increases from 2014-2020
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 2020?
In summary, here’s a good plan of action going into 2020:
- Your margins WILL decrease from these increases, especially in regards to storage fees. Either be more nimble with how much inventory you store or increase prices.
- Make any removal orders you have planned before February 18, 2020
- If your items are standard size items weighing 10-16 ounces or Medium Oversize items, be prepared for fairly steep FBA fee increase
Relatively small fee increases like the ones for 2020 are easy to ignore but over multiple years they’re the proverbial heat being turned up on the frog. In addition to overall more expensive advertising costs, your margins will shrink significantly if you don’t take action to reduce costs or increase prices.
Every February, Amazon implements new referral and FBA fee changes. Some years are worse than others, and this year was one of the worst for storage rate increases.
How will you be impacted by the new fee increases? Let me know in the comments section below.
Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He’s also a former Amazon warehouse employee of one week.