How to Reduce Amazon FBA Fees in 2024

18 September 2024
Ben Mathew

Amazon’s global marketplace offers sellers unparalleled access to millions of customers worldwide. However, selling on Amazon can become expensive, particularly if you use the Fulfillment by Amazon (FBA) service. In fact, according to studies, about one-third of the money you make selling on Amazon goes towards fees. Managing these fees is critical to maximize your profits and ensure long-term business success.

This guide will break down the primary fees affecting sellers' profits and provide actionable strategies to reduce FBA fees in 2024.

Key Costs Impacting Amazon Sellers

The main fees impacting your Amazon business include:

Let’s explore each of these fees in detail and outline strategies for reducing them.


1. Reducing Amazon Fulfillment Fees

Fulfillment fees are a significant cost factor for Amazon sellers. Starting February 5, 2024, Amazon will introduce changes to its size tiers and fulfillment fees:

New Hack: Utilize Amazon's Ships in Product Packaging (SIPP) program starting February 5, 2024, to receive discounts on fulfillment fees. Products that meet SIPP guidelines and ship in their original packaging can automatically receive a discounted fulfillment fee. This is especially useful for reducing costs on small and large standard-size items.

By keeping track of these updates, you can better manage your fulfillment costs and enhance your profitability.


2. Reducing Amazon Referral Fees

The referral fee is the largest portion of Amazon's fees, accounting for about 15% of your product's sale price in most categories. However, understanding how referral fees work can help you find ways to reduce them.

Strategies to Lower Referral Fees


3. Cutting Amazon Storage Fees

Amazon charges storage fees based on the volume your products occupy in their warehouses. These fees can quickly accumulate, especially for slow-moving inventory or during peak seasons.

2024 Storage Fee Changes:

Strategies to Reduce Storage Fees

Hack: Participate in Amazon's Low-Price FBA Program for products priced under $10, as it offers $0.77 lower fulfillment rates than standard FBA rates, helping to further reduce costs.


Conclusion

Reducing Amazon FBA fees in 2024 is essential for boosting profitability and staying competitive. Regularly audit your fees using Amazon's tools, stay informed about policy changes, and apply the best practices discussed in this guide. This proactive approach will help you keep more money in your pocket and reinvest in growing your Amazon business.

If you need personalized guidance or help fine-tuning your strategies, Superfuel AI can assist. Our AI-powered assistant analyzes 36+ key Amazon metrics to identify and address the root causes of sales fluctuations, helping you optimize your storefront and boost sales. Reach out to us at [email protected].

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Ben Mathew, Amazon Expert

Ben Mathew is a co-founder at Superfuel, a sales assistant for Amazon sellers. In the past, Ben and his team of e-commerce specialists and software engineers have launched 40+ new brands on Amazon, taking them from zero to bestsellers. In his free time, he is either learning from other top sellers or encouraging his 3 daughters in their love for reading. He is reachable at ben [at] superfuel.io.


FAQs

  1. What are the biggest Amazon fees impacting sellers in 2024?

    • The most significant fees include fulfillment fees, referral fees, storage fees (now including low-inventory-level fees), and advertising costs.
  2. How can I lower my Amazon fulfillment fees?

    • Utilize SIPP discounts, optimize product size and weight, bundle products, use Amazon's FBA fee calculator to estimate costs, and regularly audit product measurements for overcharges.
  3. Are there ways to reduce referral fees on Amazon?

    • Yes, sell in categories with lower referral fees, and enroll in Amazon's Brand Referral Bonus Program to earn a bonus on referral fees by driving external traffic to your listings.
  4. How do I minimize storage fees?

    • Avoid overstocking, use removal orders for slow-moving inventory, run promotions to clear out excess stock, and utilize Amazon's IPI score to track inventory health. Also, be mindful of the new Low-Inventory-Level Fee coming into effect in 2024.
  5. What’s the best way to cut advertising costs on Amazon?

    • Set a target ACoS, use high-traffic, low-competition keywords, optimize your product listings, and leverage free marketing strategies like social media to supplement paid advertising.