They did it again: Major new fees for FBA sellers have arrived. What’s happening, and how much should
Part One in a Five-Part Series
Let’s get to it. In the past 3 weeks, the following Fulfillment by
- New FBA fees hit lower-end books (and more).
- New simplification of FBA fee structure (the only partially good change).
- New FBA storage fees increase 8%.
- FBA long term storage fees (LTSF) to be charged monthly.
- New long term storage fee minimum of 50 cents a month imposed.
- New inventory limits for sellers who don’t maintain certain turnover.
I’m running down each of these in detail below.
Sidebar: I’m breaking this into five articles over the next 10 days.
In this series, I’m not just reporting the new fees (that would be boring and not very useful), but I’ll set out to answer every question about what these fees mean, and how
Here is a preview of this series:
Part One: A rundown of all new and upcoming fees
Part Two: The numbers: Exactly what new FBA fees translate to in hard numbers for books of various sizes.
Part Three: More numbers: Exactly what new Long Term Storage Fees translate to in hard numbers for books of various sizes.
Part Four: How new FBA fees will affect my buying strategy.
Part Five: How new LTSF will buying and repricing strategy.
This first article is the big one.
So what is
There’s no sugar coating this: The new FBA fees of the last 12+ months have been severe.
The biggest impact has been (and continues to be) on the following two categories of used media:
- Low-end sales (esp. $10 and under).
- Long-tail products (slow selling items hit by new long term storage fees).
What hasn’t changed for
Books and used media are still the cheapest and most abundant category on
This is not the end of selling cheap used stuff via Fulfillment by
The three changes
Here are the top three adjustments FBA sellers must make after the new
- Greater attention to the FBA offers your scanning app isn’t showing you (to prevent sourcing books that will sell at a loss).
- Stricter standards applied to purchasing long tail books.
- A stricter formula for liquidating books before the 6 month mark.
I will go into each of these in much greater detail over the next 10 days. This article synopsizes the latest developments, and later articles will break down the raw numbers and higher-level implications.
The thing that’s motivating
“At times we experience physical constraints on inventory capacity during key shopping seasons. To help minimize these constraints, we want to continue to allow the most efficiently managed inventory to flow through the network, while limiting less efficiently managed inventory.”
Code for “stop sending us so much cheap and/or slow-selling stuff.”
You’ll notice that every change is designed to 1) limit the amount of inventory getting shipped in, and 2) purge slow-selling inventory from FBA warehouses.
Here’s the quick lightning-round on every new change:
New thing #1: New FBA fees
What this is: Greater commissions for anything sold via Fulfillment by
When this starts: February 22nd (already started)
Severity level (1 to 10 scale): 7
More detail: This is closer to an 8 for lower-end books (sub-$10), and more of a 5 for higher priced books.
New thing #2: New FBA fees have been simplified
What this is: FBA fees now have a single per-pound fulfillment fee.
When this starts: February 22nd (already started)
More detail: For each weight tier, fulfillment prices are going up. The biggest jump is from the <1 pound to 1-to-2 pound bracket. Even smaller, lighter books, the flat rate per pound further guts profit from sales and lower prices (esp. $10 and below).
Severity level (1 to 10 scale): This is off the severity scale altogether, since it is merely a qualifier of the aforementioned new FBA fees. If
New thing #3: New FBA monthly storage fees increase
What this is: Monthly storage fees going up about 8%.
When this starts: April 1st.
Severity level (1 to 10 scale): 2
More detail: Not much to say about this. Compared to other developments, this one won’t move the needle that much. The monthly fees are small enough as it is, that an added 8% just isn’t much of a big deal.
New thing #4: Long term storage fees to be imposed monthly
What this is: Every item in storage longer than six months will have be charged a LTSF each month (instead of every six months)
When this starts: September 15th.
Severity level (1 to 10 scale): 8
More detail: This one is huge. Instead of getting hit with a big fee every August and February, we’ll now be hit with a smaller fee, but every month.
On a month-by-month basis, this very roughly translates to a little less than double the amount of old long term storage fees (LTSF).
New thing #5: New monthly minimum set for all items at
What this is: For every item in your inventory for longer than a year,
When this starts: August 15th:
Severity level (1 to 10 scale): 8 (if you like your long-tail books as much as I do)
More detail: Before new fees, well under half of books were charged 50 cents every six months. These same books will now be charged that every single month. This adds a new seriousness to keeping books at
My off-the-cuff assessment is that this means that for every book ranked roughly 3 million and up, FBA sellers need to get strict about shipping them in only if they have a sales price over a certain amount (and purging them when that price drops).
New thing #6: Inventory restrictions and the “Inventory Performance Index”
What this is: A new metric is applied to each seller as the basis for imposing inventory limits.
When this starts: July 1st 2018
Severity level (1 to 10 scale): 3 (though full impact still unclear)
More detail: This is a new metric
- Excess inventory
- In stock rate
- Stranded inventory
It’s not clear if the list above are the top factors overall, or just the ones I see in Seller Central that I personally need to improve (view your score here, then post in the comments below if you see additional factors not mentioned in this list).
I tend to think inventory turnover rate is a huge part of this metric, though they’re not divulging that outright.
The way it works is that each seller gets a score of 1 to 1,000. Anyone with a score of less than 350 will have restrictions imposed on the number of units they can store at an FBA warehouse.
The motive here is clear:
What now? How to assess the damage
Assessing new FBA fees: Run any book through the old tried and true “Fulfillment by
Assessing new LTSFs: The best way to preview your upcoming LTSFs on
This is a report you can view online or download that shows which items in your inventory are subject to upcoming long term storage fees.
This series: What’s coming over the next 10 days
I’m going deep into every facet of how these fees will impact us: Both the concrete (hard math) and the higher-level implications.
- Part Two: The numbers: Exactly what new FBA fees translate to in hard numbers for books of various sizes.
- Part Three: More numbers: Exactly what new Long Term Storage Fees translate to in hard numbers for books of various sizes.
- Part Four: How new FBA fees will affect my buying strategy.
- Part Five: How new LTSF will buying and repricing strategy.
Endnote I: What are the biggest questions you want answered about new fees?
Drop a comment below so I can work them in to this series.
Endnote II: Two cool new tools to deal with Long Term Storage Fees
I got tipped off to a new tool called “LTSF Solutions” that lets you reprice just your inventory subject to upcoming long term storage fees. I tried it out, and its a cool way to quickly liquidate just your high–risk inventory.
The second tool is one I designed and am getting ready to release, allowing you to quickly liquidate dead inventory. I’m not even going to give you a hint as to how this works, but I already have a working prototype I’m playing with and I’m really excited to announce this. Look for an email soon.
Endnote III: Unrelated, but if you didn’t get both of my (free) books, ask yourself what exactly you’re doing with your life.