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.
Table of Contents
- Introduction to Remote Fulfillment with FBA
- What Are Remote Fulfillment with FBA Fees?
- New Remote Fulfillment with FBA Fees for 2023
- Reasons for the 2023 Remote Fulfillment with FBA Increase
- Strategies to Mitigate the Impact of the Fee Changes
- FBA Alternatives
- Get Connected with a Vetted Independent 3PL
- Conclusion & Final Thoughts
- Similar Articles
Introduction to Remote Fulfillment with FBA
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.
What Are the Fees for Remote Fulfillment with FBA?
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.
New Remote Fulfillment with FBA Fees for 2023
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 …
Canada: 2023 Remote Fulfillment with FBA Fees
Mexico: 2023 Remote Fulfillment with FBA Fees
Learn more about these fee changes by visiting Amazon’s seller central: https://sellercentral.amazon.com/help/hub/reference/external/G57UH6FFZUJ5DX3W.
Reasons for the 2023 Remote Fulfillment with FBA Increase
The Remote Fulfillment with FBA fee changes are being made for a couple of reasons.
Reason #1: Rising Costs
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.
Reason #2: Make Remote Fulfillment with FBA Better
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.
Strategies to Mitigate the Impact of the Fee Changes
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.
Alternative to Remote Fulfillment with FBA
Independent 3PLs in Canada & Mexico
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:
- A more reasonable and personalized fee structure with local partners on the ground with the expertise to help you minimize cross-border expenses.
- Gain a partner that can help you grow your brand. Independent 3PLs help you set realistic reorder points and par levels so that you only pay for the space you will use.
- Receive additional customization services. Use branded packaging and labels to help promote your brand.
- A 3PL in Canada and/or Mexico will have to be located, and inventory will need to be dispatched to the warehouse(s).
- You will now have to pay import duties.
- You will also have to file import taxes outside the US.
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.
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Conclusion & Final Thoughts
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.