Understanding 2024 Amazon Holiday Peak Fulfillment Fees: What Sellers Need to Know

As Amazon sellers approach the upcoming holiday season, they must familiarize themselves with the platform’s fulfillment fees. As of publication, the small standard Amazon fulfillment fees start at $2.41 for products less than a pound and climb to $4.71 and over as the weight of the item increases.

This standard fulfillment fee is in addition to other costs, including those that cover oversized products, apparel, and storage utilization, among many others. Due to the holiday season’s demand, fulfillment fees on the selling platform will increase. This price increase will go into effect on October 15, 2024, and last until January 14, 2025.

Understanding what these Amazon holiday peak fulfillment fees mean, how they will impact you as a seller, and how you can proactively prepare is critical to making a profit this holiday season. Keep reading to learn more.

What Are Holiday Peak Fulfillment Fees?

Holiday peak fulfillment fees are fees charged to Amazon sellers. They are designed to help the retail platform cover the increased costs of seasonal shopping.

These fees help cover the cost of hiring more drivers to deliver packages ordered during the season. They also help offset the cost of any additional resources needed in their warehouses to store products and fulfill orders. When they go into effect, these holiday peak fees will affect sellers who ship their products through Fulfillment by Amazon (FBA).

FBA is Amazon’s preferred fulfillment method. It allows sellers to send their inventory to one of Amazon’s fulfillment centers until it sells. Once it does, Amazon takes care of the rest of the process, including packaging, shipping, and, if applicable, handling any customer returns.

How Will Holiday Fulfillment Fees Impact Amazon Sellers?

The biggest way these holiday fulfillment fees will impact Amazon sellers is the increased cost during the holiday season. As briefly mentioned above, sellers will be charged an increased fulfillment fee, regardless of whether they sell through USA or Canada-based FBA platforms, or Multi-Channel Fulfillment (MCF).

Amazon sellers will also be subject to capacity limits on inventory. If their inventory exceeds the limit Amazon puts forth, they will be unable to add more. Below, we will explore this topic more and highlight the importance of determining your most sought-after products now so you can have a successful selling season moving forward.

For sellers utilizing FBA, specifically, they will be navigating a new fee structure, which we will detail below.

Sellers Using FBA

As mentioned above, FBA is the most used platform for Amazon sellers since it simplifies the fulfillment process. Also, as mentioned above, sellers will be navigating new fee structures for the first time this holiday season.

The first change refers to the different-sized tiers. For example, small standard rates for items weighing between six to eight ounces currently cost $3.33. That rate increases to $3.53 during the peak period.

Though this is not an exhaustive list, here are some examples of the increased fee structure that may apply to your shop. Remember, these price hikes are only in effect between October 15, 2024 – January 14, 2025:

• Small standard (2 ounces or less) will increase from $3.06 to $3.25
• Large standard (2 lbs – 2.25 lbs) will increase from $5.87 to $6.24
• Large bulky (anything 0 – 50 lbs) will increase by $.038 for every one-pound interval above the first pound
• Extra large (0 – 50 lbs) will increase by $.038 for every one-pound interval above the first pound
• Extra large (50 – 70 lbs) will increase by $0.75 for every one-pound interval above 51 pounds
• Extra large (70 – 150 pounds) will increase by $.075 for every one-pound interval above 71 pounds
• Extra large (150 lbs and over) will increase by $0.19 for every one-pound interval above 151 pounds

In layman’s terms, each tier gets a base increase during the peak season while additional interval fees will remain as is. For a full breakdown, click here.

Furthermore, sellers with inventory priced below $10 will still be able to enjoy Low-Price FBA rates, which cost $0.77 less than the standard rates mentioned above. However, these rate increases mentioned above will apply for the duration of the holiday season, but just cost less than what other sellers with items $10 and over will pay.

Sellers Using MCF

Moving on to Multi-Channel Fulfilment price hikes. MCF, as mentioned above, will experience the same price increase over the holiday season. Whereas FBA only applies to sellers who exclusively store their inventory and move products through Amazon, MCF sellers store their products in Amazon’s warehouse centers. However, their products can stem from multiple selling platforms, including Amazon, Etsy, and many others.

Sellers using MCF will experience the following price increases:

• Small standard: Between $0.19 – $0.22 per item
• Large standard (3 lbs and under): $0.24 – $0.41 per item
• Large standard (Over 3 lbs but equal to or less than 20 lbs): $0.54 per item
• Large bulky: $1.04 more per item
• Extra large (up to 50 lbs): $2.73 more per item
• Extra large (Over 50 lbs – 70 pounds): $2.81 more per item
• Extra large (Over 70 lbs – 150 lbs): $4.42 more per item
• Extra Large (Anything over 150 lbs): $8.51 more per item

Price hikes will also apply to multiple orders and expedited delivery services, as well. For example, if let’s say you sell two t-shirts off Etsy and have that order fulfilled by MCF, your standard fulfillment rate would go from $6.05 per item to $6.34. If your buyer chooses expedited shipping, the cost increases from $13.80 to $14.38 in total.

Click here to learn more about holiday peak pricing with MCF.

Sellers Using Buy with Prime

What about if you’re a Prime seller? As mentioned above, expedited orders will experience peak holiday pricing from October through January. Since Amazon Prime offers expedited shipping, what should you expect?

As with both MCF and FBA, Prime sellers will experience price increases for all small and large standard orders, as well as large bulky, and extra large units. Samplings of these price hikes are listed below:

• Small standard (4oz or less): $2.50 – $5.52 per unit placed
• Small standard (12 oz or less): $3.89 – $6.74 per unit placed
• Large standard (8 oz or less): $3.30 – $6.58 per unit placed
• Large standard (16 oz or less): $4.45 – $8.48 per unit placed
• Large standard (3+ lbs – 20 lbs): $5.93 – $11.21 per unit placed, with an additional $0.58 – $0.60 added for every lb above the first 3 lbs
• Extra-large (50 lbs – 70 lbs): $29.73 plus an additional $0.55 per pound above 51 lbs
• Extra-large (150 lbs and over): $232.01 plus an additional $1.50 per pound above 151 lbs

Click here to see the total range. Amazon Prime sellers’ fulfillment rate decreases as more units are ordered. For example, for small standard sizes four ounces and under, sellers will have to pay $2.50 per four-plus unit order but $5.52 if a one-unit order is placed. There is also a 2.4% processing fee, plus an additional 0.30 cents charged for each transaction.

5 Tips to Prepare for Amazon Holiday Peak Fees

The best way to prepare for Amazon’s holiday peak fees is to make your adjustments now. The sooner you prepare, the more successful your sales experience will be this holiday season.

Here are a few tips to help you prepare:

1. Adjust Your Pricing Strategy to Account for Increased Costs

Knowing what changes to expect gives you a chance to see where you need to make adjustments. This could include temporarily increasing prices on your most in-demand products to help offset fulfillment fees. Or, if you sell with Prime, bundling items or running deals on multiple units can help keep fulfillment costs lower, while still letting you make a profit on other larger, more expensive items.

2. Forecast Demand Based on Historical Data

The cool thing about being a seller on Amazon is that you have instant access to your analytics. With this tool, you can easily identify your top sellers, which as mentioned above, can help you adjust your pricing strategy for the holiday season.

While you will want to clear out all your inventory, dealing with increased fulfillment fees isn’t the time to do it. Rather, determine the items that are in demand whether based on previous purchases or current trends, and make them a priority. Making sure you have enough inventory available for your most in-demand products is the difference between profitable sales and simply maintaining the status quo.

3. Clear Out Slow-Moving Inventory

And while we’re talking about your inventory, now’s the time to clear out those items that sell, but don’t necessarily move fast. Clearing out your slow-moving inventory lets you keep inventory that is likely to yield a profit despite higher fulfillment fees over the holiday season.

4. Prioritize High-Margin Products

Earlier, we mentioned that you should prioritize products that are most likely to sell, however, this also applies to items that are considered high-margin products. These are products, that regardless of how fast they sell, will yield a decent profit despite any increased fulfillment fees and other business expenses. Though you will still want to prioritize items that are forecasted to sell out, prioritizing high-margin products over your lower-priced items during the holiday season, is one way to get ahead.

5. Run Promotions and Ads

Last but not least, to account for the peak holiday pricing, now’s the time to run some Amazon ads to promote your items. There are several strategies you can take throughout the season. In October, when these fees take charge, run some ads to clear out your lower-priced, slow-moving inventory. This will help boost sales and make room for both in-demand and high-margin products.

Run ads based on your analytics when you are closer to the holiday season, such as November and December. What items aren’t selling without promotion? Maybe adding a few dollars to promote them will help boost sales. Likewise, what are your competitors charging? Setting up an ad or temporary promotional price for similar items can generate more business your way.

No matter which direction you choose, there are numerous strategies to increase your visibility during the holiday season and help manage peak fulfillment pricing. Reach out to Evolved Commerce today to make the most of this holiday season! As experts in Amazon marketing strategy, we’re ready to help you achieve a successful season.