Part 2 of the 2024 Fee Changes: Referral & Storage

• • Items priced under $15: Referral fees have been decreased from 17% to 5%.
  • Products priced between $15 and $20: Referral fees have been lowered from 17% to 10%.

Example:

• • Before Adjustment: Selling an apparel item at $14 would have incurred a referral fee of $2.38 (17% of $14).
  • After Adjustment: Now, the same item incurs a referral fee of just $0.70 (5% of $14), enhancing your margin by $1.68 per unit sold.

How to Act on It:

• • Revisit Pricing: For an apparel product previously priced at $14.99 to stay under the 17% fee threshold, consider increasing the price to perhaps $19.99 to take advantage of the lower 10% fee rate without crossing the $20 threshold, potentially increasing profit margins.
  • OR Product Line Expansion: With the reduced fees, introducing new products in the sub-$20 range becomes more attractive, possibly filling gaps in your product lineup or testing new market segments with lower financial risk.

Logistics Fees Insight: Storage Fees Adjustments
Effective April 1, 2024, Amazon has revised its storage fees, offering a reduction that benefits sellers:

• • Non-peak monthly storage fees for standard-size products have been reduced by an average of $0.09 per cubic foot, dropping from $0.87 to $0.78.

Example:

• • Before Adjustment: Storing 100 cubic feet of standard-size inventory would cost $87 per month.
  • After Adjustment: Now, the same space costs $78 per month, saving sellers $9 monthly or $108 annually on storage fees for every 100 cubic feet of inventory.

How to Act on it:

• • Reevaluate Inventory Levels: Consider increasing your standard-size product inventory to take advantage of reduced storage costs.
  • Budget Optimization: Update your financial forecasts with the new fee structure to accurately predict your profit margins.
  • Strategic Planning: Align your restocking schedules with non-peak periods to benefit from the lowered fees and avoid higher charges during peak times.