What is the Amazon FBA Inbound Placement Service Fee?

What is the Amazon FBA Inbound Placement Service Fee?

On March 1st, 2024, Amazon implemented the FBA inbound placement service fee. Per Amazon, this fee is “for standard and large bulky sized products and reflects the cost of distributing inventory to fulfillment centers close to customers.” The placement service is designed to help optimize inventory placement to improve delivery speed and reduce shipping costs to customers. When creating the inventory placement options, Amazon takes into account the types and quantities of products you are shipping in, your existing inventory levels across Amazon’s network, and the location of customer demand. The fee itself varies based on the size and weight of the items, with different rates for standard-size and oversized items.

FBA Inbound Placement Service Options

When you create a shipping plan, you can select one of the following inventory inbound placement options:

Minimal shipment splits
​Send your inventory to a minimal number of fulfillment centers (usually just one) and Amazon will further distribute them across their network. This option incurs an additional per-item fee, varying by location, and are particularly higher in the Western U.S.

Partial or Amazon-optimized shipment splits
​With this option, you can send your inventory to multiple inbound locations for a reduced or no fee. You can choose to send your inventory to the optimal number of locations recommended by Amazon, (usually four to six), without incurring any fees. If you choose to send your inventory to a partial number of locations (usually two or three) you will pay a reduced fee.

​The availability of these inbound placement options is based on several factors, including the product types and quantities that you have in your shipping plan, your existing inventory levels across our network, and the location of customer demand. When you create a shipping plan, you’ll see a fee estimate for each available inbound placement option. You’ll be charged the FBA inbound placement service fee 45 days after your shipment is received, based on the inbound location and the quantities received.

Factors for Inbound Placement Fee

The fees are calculated based on the following factors:

• Item size: Whether the item is small standard, large standard, or large bulky.
• Weight: Weight of the product. Amazon uses the unit weight for small standard items and the greater of dimensional weight or unit weight for large standard and large bulky items.
• Number of locations tier: Minimal (highest fee), Partial (lower fee), or Amazon-optimized (no fee) shipment splits
• Inbound location: The fee range will vary by the location of the fulfillment center. There may be higher fees for shipments sent to inbound locations in the West versus other parts of the country.
  

Below is the per unit fee table provided by Amazon based on an item’s size and weight:

How to look up your past FBA inbound placement service fees

You’ll be charged an FBA inbound placement service fee 45 days after your shipment is received. You can track your charges as follows:

• Go to Payments dashboard
• Click the Transaction view tab, then select Service fees in the Transaction type drop-down menu.
• Click Update to view your FBA inbound placement service fee per shipment.
• Locate your shipment ID under the Order ID field in the transaction view. You will be able to view the total fee charges on a shipment level.
  

You can also use the FBA inbound placement service fee downloadable report. This report will show the inbound placement service fee charges on shipping plan, shipment, and SKU levels, and will help you identify if your shipping plan was compliant.

To navigate to your report, follow these steps:

• From the Reports drop-down menu, select Fulfillment.
• Under Payments, click FBA inbound placement service fees.
  

Tips to Minimize the New Amazon FBA Inbound Placement Service Fee

Breakup Standard and Oversize Items - Separate your shipments into standard-size and oversized items before creating the shipping plans since the fee structure varies significantly between these two categories

Strategically Plan Inventory Levels - Evaluate larger shipments in relation to storage expenses to maximize cost savings

Utilize Amazon's Optimized Shipment Splits - Distribute your inventory across at least four Amazon-designated centers to eliminate per-item fees, and try to avoid shipping to the West (if possible)

Conclusion

The introduction of the FBA Inbound Placement Service Fee requires Amazon sellers to navigate carefully through new financial considerations. By understanding the fee structures, sellers can mitigate these costs and maintain profitability. Understanding Amazon’s new inbound placement fees is important for managing costs when using FBA.