NEW Inbound Inventory Placement Service Fees

There used to be one choice to make regarding shipping via Amazon’s Preferred Partner Program – LTL or Small Parcel? Now, with the introduction of the Inbound Placement Service Fees, each of these options is just the beginning of a minefield of decisions. 

What are Inbound Placement Service Fees

In addition to seeing shipping prices via Amazon’s Preferred Partner Program go up tremendously in recent years, there are now more fees to be aware of when shipping to Amazon FBA. Amazon has recently implemented their Inbound Inventory Placement Service Fees.See here & here as well. 

In the past, there was a fee that you could opt into, that would ensure your items/cartons were all sent to ONE Amazon location. This new set of fees is different. For one, it is not optional. 

What are we finding so far?

Essentially, Amazon is giving choices between a)shipping all to one destination and b)shipping to multiple locations, as well as choices between shipping to a) East, b) West, and c) middle America). 

Not everyone has every option available to them yet. 

The closest destination is not the cheapest – it seems that the least expensive option we are seeing so far is often the East Coast, as that might be where Amazon wants the units to end up. 

Here is what it looks like if you have all options available:

Others have grayed out options:

This fee is in addition to postage. So for the screenshot above, where the placement fee is $519, the postage on this shipment was approximately $300. Total, our client paid almost $900 to ship. 

We recognize that this is not ideal. 

Can we do anything about it?

Not at this time. If you work with us, and your Account Manager generates your postage, we will likely pick the least expensive option. However, least expensive does not necessarily mean inexpensive. Additionally, we are seeing that LTL rates are currently more expensive than Small Parcel rates much of the time.

We also tried a workaround in which we get the postage for the shipment for our client – however, our rates were so similar to Amazon’s shipping rates, and the placement fee still applies – so we could not save our client money here either.

For our current clients on the API (Online Arbitrage and Wholesale Clients) we have not seen this affect you so far. Update: It has come to our attention that for sellers using the API, placement fees will still apply. 

However, for sellers who use an API, here is some more information:

If you use the Amazon Marketplace Web Service (MWS) API or Selling Partner API, you can provide your preferred inbound option through a new setting under the Fulfillment by Amazon settings page starting on March 1, 2024.

What can YOU do? 

• If your prep center gets your shipping labels for you from your Amazon account, see if you can take over that task temporarily, so you can get a feel for the new options. This way, you can agree to the rates and destinations and shipping speeds you prefer without back and forth. 
• Write on the forums, or work with an Amazon Rep if you have one. Make your voice heard. 
• Absorb these fees as much as you can until April. One of our clients told us they heard that other fees are being reduced in April to help offset these fees – so maybe there is hope? But we did not hear this straight from Amazon ourselves – so please take this with a grain of salt. We did see this, though:

• If all else fails, focus on growing your most profitable items, and phase out the least profitable skus. 

Rules about Deleting Shipments?

Amazon has also indicated that if they believe a seller is creating and deleting shipments in order to get the “best” rate, they will penalize the seller with fines. They said,  “Deleting or abandoning shipments to avoid shipment splits in a shipping plan will result in a higher inbound placement service fee and you may incur added inbound defect fees due to non-compliance.

As Amazon no longer allows postage to be voided (if using Send to Amazon/the New Workflow), we would assume that they will allow some deleting of shipments. However, we believe that if attempted manipulation is obvious, they will absolutely fine you. So please do not risk your account trying to avoid the fees. 

If you have more information you don’t mind sharing, or any questions we might be able to answer, please feel free to contact us. As things develop, we will keep you updated!