Amazon FBA fees are going up.
The retailer has announced the fee increases for 2022, and like EcomCrew clockwork, we'll examine how big or small these increases really are. Amazon will always paint a picture of modest fee increases even in the case of massive ones (such as in 2018).
We'll give a no-Amazon-spin analysis of what these fee increases will really mean for you as a seller.
Related Reading: Amazon FBA Fee Updates (2021)
Related Reading: Amazon FBA Fee Updates (2020)
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Related Reading: Amazon FBA Fee Updates (2018)
Related Reading: Amazon FBA Fee Updates (2017)
Summary of Amazon 2022 Seller Fee Changes
- Storage fees are going up approximately 10.5% for both standard-size and oversize items from January to September. There are no increases during peak months (October to December).
- There's a median increase of 4.8% for standard-size items, with small standard-size items seeing the largest increase of 7.5%.
- There's just a 2.8% increase for small oversize items but a 12.1% and 7.8% increase for medium and large oversize items respectively.
- Apparel items are seeing fee increases of approximately 10%.
- Contrary to previous years, there are no fee decreases for any categories (for the 2021 fee increases, smaller items actually saw significant fee decreases).
- No referral fee changes except for a decrease for lawnmowers and snow blowers.
Amazon 2022 Fee Increases – Standard Size Items
Amazon has increased fees for standard-size items quite significantly. Amazon FBA fee increases affect mostly smaller items, going up 7.5% for all weight categories for small standard size. For large standard size, fees are going up from 1.9% to 6.3%. This is one of the biggest fee increases for standard-size items in a couple of years.
Related reading: The Ultimate Amazon FBA Fee Calculator
Amazon 2022 Fee Increases – Oversize Items
Increases in Amazon Storage Fees
Amazon is increasing storage fees quite significantly by roughly 10.5% during non-peak times, from January to September, for both standard-size and oversize items. This is the first time in a couple of years that Amazon has increased storage fees and one of the largest storage fee increases ever. There will be no increases during peak periods.
Amazon Historical Increases from 2014 to 2022
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 2022?
In summary, here are some tactics for dampening the blow of these fee increases for 2022:
- The storage fee increases are significant. Amazon is already significantly more expensive for storage than most 3PLs. Consider off-loading some of your storage costs away from Amazon (although for many sellers it's a non-voluntary choice anyways given storage limits).
- You definitely faced significant freight increases in 2021, your Chinese supplier prices have probably increased too, and now your FBA fees are going up 5% to 10%. Inflation is real, and it's here. Unless you sell an absurdly profitable product, you need to increase your prices.
- Fee increases will likely be minimal in 2023 (Amazon tends to alternate between big fee increases and minimal fee increases). Consider this in your medium-term planning.
Conclusion
The fee increases scheduled in 2022 are some of the biggest increases ever. We predicted during the last fee update that the 2022 fee increases would be significant as Amazon seems to alternate between large and minimal fee increases. The good news is that it means 2023's fee increases will likely be small. The bad news is that sellers will have more rising costs to deal with over the next year.
Not wanting to be dramatic but I think this spells the end for many small FBA sellers. Unless you have sizeable margins already, rising product costs combined with last mile & storage costs with Amazon are going to be brutal. Maybe this signals a swing back to drop shipping models. Time will tell.