Tis the season for…fee increases? That certainly seems to be the case this winter. Higher costs associated with transportation and fulfillment have caused prices for these services to increase.
Amazon.com, Inc. (“Amazon”), UPS, FedEx and USPS have all recently announced increased fees that could impact Amazon sellers. In this blog post, we’ll provide a quick overview of the changes so you know what to expect in 2018.
FBA Fee Changes
Amazon will be raising fees for the FBA program on February 22, 2018. Fulfillment fees will go up for the majority of product size tiers and weights. These rates will apply year-round, and there will no longer be a separate fulfillment fee rate for Q4.
Dimensional weight calculation will be changed to reflect current industry best practices. At this time, dimensional weight is calculated as unit volume divided by 166. On February 22, 2018, this calculation will change to unit volume divided by 139. (Unit volume is based on length x width x height in inches.) Dimensional weight calculations only apply to large standard-size items that weigh more than one pound, as well as all small, medium and large oversize items.
To get complete details about the FBA fee changes, click here to see the current and new FBA fees.
Shipping Fee Changes
UPS, FedEx and the USPS have all announced increased shipping fees for 2018.
UPS: New rates will begin on December 24, 2017. UPS will raise rates by an average of 4.9% for UPS Ground, UPS Air and International shipping services. There are also many surcharges that will increase, including address correction, large package and return services. You can learn more about UPS rate changes here.
FedEx: FedEx will also raise rates an average of 4.9%, with new prices taking effect on January 1, 2018. In addition, rates for surcharges such as address correction and residential delivery will also increase. FedEx will add dim-weight pricing to FedEx SmartPost on January 22, 2018, changing criteria and pricing for packages that are oversized, unauthorized or require additional handling. See the 2018 FedEx rates here.
USPS: USPS Priority Mail rates will increase by an average on 3.9% on January 21, 2018. You can see the proposed pricing changes here.
Plan for Increased Rates
It’s important to be aware of these fee changes as you make plans for your Amazon business in 2018. You may need to change your own prices or shipping charges to protect your margins. The FBA fee changes might impact the type of products you choose to stock in the year ahead. You’ll also want to factor in return costs. How will the increased shipping rates impact your holiday return process?
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