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As an Amazon seller, you may incur Inbound Placement Fees when sending inventory to Amazon’s fulfillment centers under the Fulfillment by Amazon (FBA) program.
This fee is part of Amazon's logistics process, which manages how and where inventory is placed across its vast network of warehouses and fulfillment centers.
Understanding what and how Amazon’s inbound placement fees work is one key to making smart logistics decisions that impact your Amazon business positively.
In this article, we will explore all you need to know about Amazon’s new inbound placement fees, how to calculate inbound placement fees, and most importantly, how you can reduce inbound placement fees.
When you send your inventory to Amazon, the company may direct you to ship to one or multiple fulfillment centers based on factors such as demand patterns (where customers are likely to order the product) and inventory levels across fulfillment centers.
The new inbound placement fee is a charge implemented by Amazon for sellers using FBA who choose to bypass Amazon's default placement plan and instead want to ship their entire inventory to a single fulfillment center. Then, Amazon distributes their inventory across its network. This fee is calculated based on the size, weight, and destination of items sent to Amazon's warehouses. This helps to improve delivery speed while reducing shipping costs. The fee applies to both standard-size and oversized items and is charged 45 days after Amazon receives the shipment.
Amazon allows you to choose between two inventory placement options: Minimal shipment splits, or Partial/Amazon-optimized shipment splits.
With minimal shipment splits, you can send your inventory to a single inbound location at a cost. Amazon will then distribute your inventory across its network for you. Depending on the inbound location, the cost may vary. Shipments sent to Western locations typically incur higher fees compared to other locations.
With Partial/Amazon-optimized shipment splits, you can send your inventory to different inbound locations for a reduced or no fee at all. The fee is applied based on inbound locations and number of shipments.
If your shipping plan qualifies, you can choose to send your inventory to the recommended number of locations, which is usually four or more at no cost. On the other hand, you can send your inventory to a partial number of locations (typically two or three) at a reduced fee.
Here’s how you can select your Amazon inventory placement option via your Amazon Seller Central account:
Here, you'll see the current inventory placement setting. There are generally three options to choose from:
Default: This is Amazon's standard option, where they decide how to distribute your inventory across multiple fulfillment centers.
Inventory Placement Service: This allows you to send all your inventory to one fulfillment center, which Amazon then distributes.
Distributed Inventory Placement: This option gives you more control over where your inventory is placed.
Some factors can affect the inbound placement options available. These include:
The size and weight of your item can affect your inbound placement options. Sizes include small standard items (up to 15x12x0.75 inches, weighing 16 oz or less), large standard items (over 15x12x0.75 inches but under 59x33x3 inches, weighing more than 16 oz but less than 50 lbs), and large bulky items (over 59x33x3 inches or weighing 50 lbs or more). Extra-large-sized products are exempt from the inbound placement service fee.
Availability of inbound placement options depends on product types, quantities, existing inventory levels across the Amazon Fulfillment Network, and customer demand location
To qualify for certain options, you need to meet certain minimum quantity thresholds.
When creating a shipping plan, you'll receive a fee estimate for each available inbound placement option. The Amazon FBA inbound placement service fee is charged 45 days after your shipment is received, based on quantities received as well as inbound location.
The fee structure and availability may change over time, so it's important to check Amazon's official documentation for the most up-to-date information.
The inbound placement service fee is calculated based on several factors:
Using these factors, Amazon calculates your inbound placement fees for placing your inventory strategically.
Amazon has integrated inbound placement service fee calculation into their Revenue Calculator tool. This allows you to calculate estimated per-unit rates for either single SKUs or bulk quantities, choose from a range of FBA inbound placement service fee options, select the fulfillment center location (West, East, or Central), and specify the number of shipments being sent.
Amazon introduced new inbound placement fees in March 2024 for sellers using Fulfillment by Amazon (FBA). These fees apply to products sent to Amazon's fulfillment centers:
With the new inbound placement fees, many sellers are looking for ways to reduce their costs. Here are some strategies that will help you reduce Amazon’s inbound placement fees:
Before implementing any reduction strategies, it's crucial to first understand how the fees are calculated. Your fees will vary based on your item size, weight, shipment split options, and inbound location.
One of the most effective ways to reduce fees is to choose the right shipment split option.
With the partial/Amazon-optimized shipment split, you can avoid per-item inbound placement fees when sending inventory to four or more Amazon fulfillment centers.
This option can be more cost-effective than minimal shipment splits for some sellers.
The minimal shipment split is the simplest inbound placement option, however, it may result in higher fees for some products. You want to ensure you choose the shipment split option that is best for your products.
One way to reduce costs and save money is to group similar products together in larger shipments. You can combine related items into single shipments whenever possible.
Also, you can consider increasing order quantities to reach minimum thresholds for reduced fees. Use Amazon's Revenue Calculator to estimate costs for different shipment sizes.
Amazon's Revenue Calculator is a powerful tool for optimizing your shipping strategy. Simply input your product details, including size, weight, and quantity. Compare different shipment split options and their fees and adjust your strategy based on the estimated costs.
Classifying your products effectively is one way to reduce inbound placement fees. Ensure you accurately categorize your items as standard size or oversized. For small standard items, focus on minimizing unit weight to reduce per-unit fees. For larger items, optimize dimensional weight calculations to lower fees.
While this may not always be possible, choosing the right inbound location can impact fees.
Shipments sent to eastern locations often incur lower fees compared to western locations. You can consider the trade-off between faster shipping times and cost savings when deciding on inbound locations.
Effective inventory management strategies can indirectly reduce fees. Ensure you maintain optimal inventory levels to avoid unnecessary shipments. Use Amazon's inventory management tools to track stock levels accurately. You can implement just-in-time ordering practices to reduce excess inventory.
Amazon occasionally offers promotions, so ensure you stay informed about the latest promotions and special offers. Consider joining Amazon's Seller Central forums to stay updated on potential fee reduction opportunities.
Amazon’s inbound placement fee is Amazon’s way of optimizing its logistics network while encouraging sellers to adopt cost-efficient shipping practices. While these fees can stack up to your overall costs, they also offer an option for convenience in managing inbound shipments.
Amazon's inbound placement fee is a new charge implemented for sellers using Fulfillment by Amazon who choose to have Amazon distribute their inventory across multiple fulfillment centers. The new inbound placement fee was introduced on March 1, 2024, and is charged to cover the expenses of distributing products to various fulfillment centers located close to customers across Amazon's network.
One way to avoid inbound placement fees is to use Amazon’s default placement system. This allows Amazon to determine the best fulfillment centers based on its algorithms and customer demand data. While you may have shipments to multiple warehouses, you can avoid placement fees.
The Amazon inbound transportation charge refers to the fees charged for shipping products to Amazon's fulfillment centers using Amazon's partner carrier services. This charge is separate from the new inbound placement service fee introduced in March 2024. The charge covers the cost of shipping items to Amazon's fulfillment centers and is typically calculated based on the weight and dimensions of the shipped items.
Amazon charges a variety of fees that cover the different types of services provided, from listing products on the Amazon platform to handling storage, shipping, and customer service through Amazon’s Fulfillment by Amazon. Some Amazon FBA fees include referral fees, fulfillment fees, storage fees, closing fees, etc.
You’ve probably already considered selling on Amazon but its way easier than you think.
Call Us Now