E590: Amazon Announces Major Fee Increases for AWD

Dave breaks down the huge fee increases for the Amazon Warehousing and Distribution program that takes effect on April 1st, 2025. He talks about the changes in warehousing and distribution fees, specifically on how much the fees have increased from previous iterations. 

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Today's episode is sponsored by Autron. Maximize your ROI with Autron’s real-time algorithmic bidding, optimizing every ad dollar for smarter spending and higher returns. Start optimizing today and get 30% off for 3 months!   Amazon Warehousing and Distribution (AWD) was one of the biggest programs that Amazon introduced in 2022, and pushed a lot of sellers into using AWD by increasing prices on the FBA side of inventory.    Back then, it seemed like an attractive alternative because of the low prices despite the shove to get everyone into the program.    That is until today where Amazon announced a fee increase to the AWD program in the most confusing way possible.    Luckily, Dave is here to break it all down for us and how these fees impact your e-commerce business.  Big Takeaways

• Amazon is increasing fees starting April 1st, 2025.
• The fee increase is not like previous fee announcements; they've given sellers only three weeks notice.
• AWD storage fees will increase by 20%.
• Amazon has changed the name of their "integrated rate" to "smart storage rate".
• To qualify for the smart storage rate, 70 days of inventory is required.
• Processing fees will increase from $2.50 to $2.70 per box.
• Transportation fees will rise from $1.00 to $1.15 per cubic foot.
• Overall, expect a 15-20% increase in fees.
• Amazon's tactics make it hard to plan for these increases.
• Sellers need to increase prices to maintain margins.

Timestamps

• 00:00 - Introduction to Amazon Fee Increases
• 03:12 - Understanding the New AWD Fees
• 05:51 - Impact of Storage Fee Changes
• 09:10 - Processing and Transportation Fee Adjustments
• 11:03 - Conclusion and Final Thoughts

Thanks for listening!

Until next time, happy selling!