Amazon has announced fee increases for what they call multi-channel fulfillment (MCF) FBA fees starting August 30, 2017. Basically, these are the FBA fees you get charged if you ship an product for an order you receive off of Amazon, i.e. through Shopify or eBay (yes, you can ship items from FBA for non-Amazon orders).
Back in December, Amazon announced significant increases to on-Amazon FBA fees. Not surprisingly, Amazon painted these fee increases as nominal and emphasized that a very very very small fraction of orders would actually see FBA fee decreases. Of course, this was mostly fluff and the reality was that fees increased around 10-20% for most people.
Once again, when Amazon announced MCF fee increases they presented it as though it would result in cost savings for most people. But are fees really decreasing or are they actually increasing? In this post I will give an objective overview of what the fee increases really mean.
Why Should You Care about Multi-Channel Fulfillment fee increases?
I suspect many people reading this probably glossed over the words Multi-Channel Fulfillment and figured it didn't apply to them. This might be the case but it should be relevant to you.
I'm surprised how many people are still oblivious to the fact Amazon is perfectly happy to ship items from their warehouses for orders not placed through Amazon. My company now uses Amazon to ship almost all of our eBay, Shopify, and other non-Amazon orders. Forget the 3PL or making trips to the local UPS store!
Amazon does logistics better than nearly any other company in the world – and definitely better than I can do or some random third party logistics company can do. They ship flawlessly and it is hard for any other company to touch their rates on 2-Day and overnight service. As I talked about in last week's article on eBay, there are a lot of other sales channels besides Amazon BUT Amazon can help you fulfill orders for those other sales channels.
Summary of the Major Changes
Overall (and very shockingly) MCF fees are decreasing almost across the board. I can't quite figure this out as all the talk is that Amazon's warehouses are bursting at the seams so logic would entail they would want to focus their attention on Amazon specific orders (a focus that was hinted at when they removed non-Amazon branded boxes last year).
Major Fee Increases:
- The Media classification is gone – it's now more or less classified as Small Standard Size. With the new classification of media, Expedited and Priority shipping services will cost 8-40% less; however, Standard Shipping will cost 98% more
- Small Oversize items (the vast majority of oversize items) will see Standard Shipping increase approximately 15%
- If your item now fits the Medium Oversize classification, meaning it has it's longest side 71-108″, and it's longest side plus girth of 130% or less, your fees will increase 43% for Standard Shipping, will increase 12% for Expedited Shipping, and will increase 18% for Priority Shipping
Major Fee Decreases
- For Standard Size items Expedited or Priority Shipping fees are decreasing 14-21%
- For Small Oversize items (the vast majority of oversize items) Expedited Shipping is decrease approximately 10% and Priority Shipping is decrease approximately 20%
- For Media Items, Expedited Shipping is decreasing 8% and Priority Shipping is decreasing 40%
- For Standard Size items with Standard Shipping, MCF fees are decreasing just 1-10%
Fees Increases – Different Oversize and Standard Size Classification
Previously Amazon only had one standard size classification for MCF orders and one oversize classification. Now each has four different tiers:
- Small Standard Size (under 1 lbs)
- Large Standard Size (under 1 lbs)
- Large Standard Size (1-2 lbs)
- Large Standard Size (2 lbs+)
- Small Oversize
- Medium Oversize
- Large Oversize
- Special Oversize
Small Standard Size more or less replaces the media classification. For oversize items, unless you're shipping incredibly bulky items like TVs and sofas you almost certainly fit into the Small Oversize category. Here's a breakdown for the fee increases by classification with the actual numbers:
Amazon's new fee schedule for Multi-Channel Fulfillment Orders may be one of the first times in Amazon's history that they are actually decreasing fees for sellers. If you're using Multi-Channel Fulfillment this is good news for you. If you're not using MCF, this all the more reason to.
Are you currently using MCF? If so, what sales channels are you selling your products through besides Amazon?