On June 30, 2023, Remote Fulfillment with FBA fees will be increased to reflect the rising costs of fulfillment, transportation, storage, and customer service while aligning with the rest of the US FBA. This article will discuss how these fee changes will impact sellers, along with strategies to mitigate the impact of these updates, alternatives, and tips to help with this increase.
Amazon's Remote Fulfillment with FBA program allows sellers in the US to sell to customers in Canada and Mexico without having to send inventory to those countries. By enrolling in the Remote Fulfillment with FBA program and creating offers on Amazon.ca and Amazon.com.mx, inventory located in US fulfillment centers will be utilized by Fulfillment by Amazon to fulfill cross-border orders directly to customers.
Fees for Remote Fulfillment with FBA are based on the size and shipping weight of the product. Also, to account for the expenses associated with cross-border fulfillment to Canada and Mexico, Remote Fulfillment with FBA fees are more costly than the standard US fees.
Like the fee changes Amazon implemented on June 30th last year, Amazon will again update the FBA fees this year on June 30th (seems to be an annual trend, don’t you think?). As part of the fee update, more granular weight tiers for fulfillment fees will be introduced to align fees and shipping costs better. Amazon states that the fee changes are in line with or below industry-average increases for fulfillment services.
Here’s a breakdown of what to expect with this fee increase …
Learn more about these fee changes by visiting Amazon’s seller central: https://sellercentral.amazon.com/help/hub/reference/external/G57UH6FFZUJ5DX3W.
The Remote Fulfillment with FBA fee changes are being made for a couple of reasons.
The main reason for this increase is to better align with the increasing costs of fulfillment, transportation, storage, and customer service. This increase will also make Remote Fulfillment with FBA line up better with the rest of the US FBA.
The second reason Amazon has given for the fee increases is to improve Remote Fulfillment with FBA. Amazon has continued to invest in the Remote Fulfillment with FBA program and has increased shipping speeds and enhanced shipping tracking.
Amazon also touts the program as a seamless way to offer US FBA inventory for sale in Canada and Mexico without needing to send inventory to those countries, worry about paying import duties, or filing import taxes outside the US.
There are several strategies sellers can use to mitigate the impact of Remote Fulfillment with FBA fee changes. One method is to increase product prices to offset the increased fees. However, sellers should be cautious when increasing prices to avoid pricing themselves out of the market.
Another strategy is to optimize inventory management to reduce storage fees. Sellers should evaluate their inventory levels regularly and adjust their inventory levels to avoid overstocking products in Amazon's fulfillment centers. Sellers should also consider using Amazon's Inventory Performance Index (IPI) to monitor their inventory levels and identify opportunities to improve inventory management.
Sellers concerned about the impact of the FBA fee changes may want to consider an alternative, like independent third-party logistics (3PL) companies with warehouses in Canada and Mexico. Here are some pros and cons of using an independent 3PL for your remote fulfillment:
It may require some investment of time and effort to find an FBA alternative. But an independent 3PL can provide improved control of your whole fulfillment process, giving you more opportunities to innovate and battle rising costs instead of just accepting an arbitrary annual increase.
Our growing 3PL network provides a network of warehouses to help you grow your business. Join the Zenventory Fulfillment Network (ZFN) and get connected with a vetted 3PL.
Amazon's updated Remote Fulfillment with FBA fees for 2023 will significantly impact sellers. Like last year, the fee increases will reduce a seller's profit margin, making competing with other sellers on Amazon more difficult. Sellers should evaluate their product pricing and profitability, optimize inventory management, and consider alternative fulfillment options like independent 3PLs to mitigate the impact of the fee changes.