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Dive Brief:
- Amazon will implement peak season fees across all products for various third-party seller fulfillment services, the company announced Thursday, the third straight year it has applied a holiday increase.
- The fees will be active from Oct. 15 to Jan. 14, 2025, and can range from a few extra cents to several dollars more per unit compared to non-peak charges depending on the product's size. They will apply to Fulfillment by Amazon in the U.S. and Canada, North America Remote Fulfillment, U.S. Multi-Channel Fulfillment and Buy with Prime orders.
- Amazon calculates and charges the fees when shipments leave its fulfillment centers, so products shipped on or after Oct. 15 will have the higher peak season charge, even if the orders were made before the active date, the company said.
U.S. Fulfillment by Amazon fees to jump during peak season
| Product | Size tier | Non-peak fulfillment fee | Peak fulfillment fee |
|---|---|---|---|
| Mobile device case | Small standard | $3.15 | $3.34 |
| T-shirt | Large standard | $4.67 | $5.00 |
| Baby cot | Large bulky | $12.27 | $13.31 |
| Monitor | Extra large 50-70 lbs. | $51.37 | $54.18 |
Source: Amazon
Dive Insight:
Amazon said the annual fee, which it first levied during the 2022 holidays, helps it cover increased fulfillment and transportation operating costs when demand jumps during the busy shipping period. Parcel carriers like FedEx and UPS implement similar charges every year.
Compared to last year, the e-commerce giant said its average holiday peak fulfillment fee is the same except for U.S. Fulfillment by Amazon products priced under $10.
"Amazon’s average FBA fulfillment fees continue to be 70% less expensive than comparable two-day shipping methods offered by other major third-party logistics providers," according to the company.
Businesses selling on Amazon have grappled with various new and adjusted fees from Amazon in recent years as the company shifted to a regionalized fulfillment model. These include charges for low inventory levels and inbound transportation into its network.
Sellers have adapted to these changes, with Amazon seeing lower-than-expected revenue derived from fees in Q2, CEO Andy Jassy said on an Aug. 1 earnings call. That's not a bad thing for Amazon.
"The incentive we've given sellers to send their items to multiple Amazon inbound facilities so they can save money where they save us effort and money is getting more traction than we even hoped," Jassy said. "These collective developments will benefit customers in the form of better selection, lower prices, and faster delivery speed."
Amazon is doing more than implementing higher fees to prepare its network for peak season. It set an earlier deadline for sellers' inventory to reach its facilities to ensure Prime delivery speeds during the busy period, as the company readies for a shorter stretch between Black Friday and Christmas than in years past.
via https://www.aiupnow.com
Max Garland, Khareem Sudlow
