Amazon Inbound Placements Fees and How to Still Make a Profit in 2024!

Amazon recently announced their new Fulfilled by Amazon (FBA) Inbound Placement Service Fee.

In this article, I share 8 tactics you can use to manage this new Inbound Placement Fee increase and avoid a dint in your profits.

This fee structure was created by Amazon to reflect the cost of distributing the sellers’ inventory to fulfillment centers closer to buyers. Specifically, from 1 March 2024, an Inbound Placement Service Fee for standard and large-bulky-sized items have been effected.

Like with other Amazon fees, shipping and storage costs continue to put the pinch on FBA sellers’ profits and in some cases force small-scale sellers to close up shop!

Let’s now take a look at the 8 tactics to keep more profit in your pocket.

In the Fulfilled by Amazon settings you need to choose your preferred Inbound Setting.

1) On the front page of FBA Seller Central, there is a gear symbol on the top right corner.

2) Hover over it and select the Fulfillment by Amazon option

3) Scroll to Inbound Settings. On the right, there is an edit button.

4) Change your settings

• Amazon-Optimized Shipment Splits: With this option, FBA sellers are sending shipments to as many as 4+ Amazon warehouses. You should expect minimal Inbound Placement fees and if you’re lucky, no additional fees.
• Partial shipment splits. FBA sellers can send inventory to fewer locations, but Inbound Placement Fees will be subject to a surcharge per unit.
• Minimal shipment splits. If you choose this option, you will have to bear the full Inbound Placement Fees for each unit in your shipment.

Obviously choosing the Amazon-optimized shipment split is the best option for avoiding these fees. But it means you’ll take on the extra costs of the inbound distribution to the 4+ FBA warehouses.

You must do the math and work out if your own inbound shipping costs ‘save’ you enough money.

For some Amazon sellers, the new Inbound Placement Fees will mean they will have to increase product prices to absorb the fees.

Ultimately, the reason that Amazon wants to move products to other warehouses (Fulfillment Center Transfer) is to locate products closer to customers who are expecting even quicker delivery.

So, shouldn’t the end customer shoulder some of the costs for the privilege of super-fast delivery?

We know it’s hard to build a customer relationship with our Amazon customers.

But if you use off-Amazon techniques to stay in touch with your customers you can build a relationship and stimulate repeat business. If you have complementary products, and you’re not doing this, then you could be leaving money on the table.

If you haven’t tried it yet, then Helium 10 Portals is a tool that helps you create an off-Amazon landing page where you can divert your customers. The best way to do this is to add an insert (QR Code) to your product so customers can get to your landing page.

Once customers are in your Portals environment you can begin email marketing or other campaigns to nurture a customer relationship to drive repeat sales.

Profitability is key. Now more than ever, you need to pay close attention to all your costs and stay net profitable.

One option for cost savings is to audit your PPC campaigns.

Consider pulling back on exploratory broad PPC campaigns and focus your campaigns on exact match PPC keywords and phrases generating the best conversions.

If PPC isn’t your forte, then get in touch with a company like eComcy who offer free PPC audits. Or do your own audit using Helium 10’s free PPC audit tool.

It’s your job as an Amazon seller to stay ahead of the many ways that your profit can get eroded. That means never sitting on your laurels and always getting creative.

You’ve heard me say it before and I’ll say it again. The FBA sellers that can sustain price hikes are the ones that are selling at a higher price point. You don’t have to completely reinvent your product. But you can create extra value. Think about:

It’s important to build a relationship with your suppliers so you can work towards lowering your upfront landed costs. For example, you can:

FBA has many advantages, and some sellers believe in this distribution model. However, there are also Amazon sellers who attest that a Fulfilled by Merchant FBM model works perfectly well for them.

If you do choose FBM then you can take advantage of Amazon discounts being offered to sellers who choose to buy their shipping through Amazon!

When sales velocity and momentum take a dive, and you can’t generate profit, then you have to consider cutting a product.

Only you can decide to draw a line in the sand, and whether selling a product is still viable. But profitability must be a top factor in your decision-making.

Sometimes cutting ties with a product can open bandwidth for you to find and launch a new much better product. My advice; don’t go down with a sinking ship. Even some of the most successful sellers have had to cut their losses and go back to the drawing board.

In this article, I have shared 8 legitimate tactics you can use to reduce your costs and keep profits in your pocket.

If you’re a seasoned Amazon seller, then you’ll already know that Amazon marketplace is a cutthroat business and there is no easy ride.

To be successful you need to embrace the challenge and repeat my mantra of ‘adapt and thrive’.