Amazon FBA warehouses have approximately 250 warehouses across the United States, from the West to the East. Therefore, Amazon has the most powerful distribution network for e-commerce in the United States. Amazon will also calculate which warehouse is closer to potential buyers of this product, and first place the goods When placed in this warehouse, the high-speed delivery time of two days or same day delivery has been reached.
For sellers, before 2023, if you want to purchase goods from Amazon warehouse, Amazon will give you two options :
Please note that the above is not a logistics fee. The seller has to find a logistics provider to deliver the logistics fee. The above fee is simply Amazon's internal warehouse transfer fee.
Of course, from the seller's perspective, if a batch of goods is delivered to a single warehouse, the logistics cost must be the cheapest, so many sellers will consider paying more placement fees to deliver to a single warehouse.
But after 2024, the Placement fee is no longer applicable. It is now renamed Inbound Placement Option, and the fee has been adjusted accordingly. It has become more expensive overall, and the calculation method has become more complicated. Below we use a photo frame to illustrate Here are some examples:
Suppose we purchase 1,000 pcs. After calculation, Amazon will now give us three options
1. Deliver to a single designated warehouse ($0.49/item) - In the past, Amazon would not give us the choice of whether to go to the West Coast or the East Coast. Now we can choose, but the West Coast is the most expensive and the East Coast is the cheapest. For this photo frame, it is delivered to One item costs $0.49 at designated warehouses on the West Coast, and $0.32 for one item sent to the East Coast. The larger the item, the more expensive it will be.
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2. Delivery to 2-3 warehouses ($0.34/item) - You read that right. In the past, you didn’t have to pay anything to deliver to 2-3 warehouses. Now you need to pay extra. You can also choose to deliver to the east and west coasts. , you can also choose whether you want to send to 2 or 3 warehouses. The more warehouses you send to, the cheaper the price will be.
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3. Deliver to more than 4 warehouses ($0/item) - Now if you want to deliver goods without paying the cost of internal pulling, you must deliver to more than 4 warehouses. Currently, I see that most people choose this Sellers all deliver to 5 warehouses
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So according to the current cost, the overall cost will definitely become more expensive, especially assuming that the first batch of goods will be 100KG, divided into 4 warehouses for distribution, and one logistics will be 25KG. For sellers, the cost will definitely increase significantly.
💡 Some new sellers may not understand why the cost of each batch of small-weight shipments (for example, 25KG) is high. This is because many logistics companies have a minimum shipping weight of 100kg. Suppose your shipment is 25KG today, the logistics company still calculates based on 100KG. So assuming the total weight is 100kg, but it is divided into four 25KG packages and sent to different warehouses, your billable weight will be 400KG, which is very expensive! However, the minimum starting weight of Logistiic Logistics mentioned below is only 10KG, which can perfectly avoid this problem.
Fees will be charged 45 days after the goods are received in the Amazon warehouse.
If you want to calculate the cost of your own product, you can refer to the following steps and prepare two pieces of information first.
Follow the steps below :
1. Open the Amazon logistics computer and select Define Product. Fill in the length, width and height of the product. You can fill in the Item price and Shipping Charge as you like. It will not affect our calculation of the Inbound Placement fee). After entering, click Estimate.
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Here is a little tip. If you are too lazy to type in, you can go directly to Amazon to search for similar competing products. Copy the ASIN, click Search Amazon Catalog on your computer, and paste it. If you don’t know how to find the ASIN of competing products, you can refer to This article below.
How to find the ASIN code of an item on Amazon
2. After entering the information, the system will automatically calculate the cost. Remember to scroll down to the screenshot.
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In response to Amazon’s gradually rising Placement Fee, you can use the following two solutions to solve it
1. Using the Amazon AWD warehouse
AWD is Amazon Warehousing & Distribution, which is called Amazon's warehousing distribution network in Chinese and Amazon's third-party replenishment warehouse in vernacular.
Why is Amazon making Amazon AWD? Because Amazon has built too many warehouses, but there are still too many goods to fit in, so it is just a matter of replenishing goods through other warehouses.
This warehouse cannot ship goods and is only used for inventory. Then when the FBA warehouse is out of stock, it will automatically replenish the goods into the FBA warehouse. It is used like a general third-party overseas warehouse, but it has several advantages:
If you want to know more about AWD, please click on the article below
What is the Amazon AWD warehouse? ReplenishmentStep by Step
2. Shipping through Logisticiic system
(1) Logsitiic is a logistics system currently used by many big sellers in the United States to ship goods to Amazon. Shipping can be done with just a few clicks, as easy as calling an Uber. Through this Logistiic, you can directly set multiple destinations, which is a great assistant for basically dividing the shipment into warehouses!
(2)Choose products
(3)Automatic quotation
The most important thing is that Logistiic can ship as little as 10kg! Therefore, even if it is divided into many warehouses today, it can still be shipped cheaply, and there is no need to worry about the risk of rising placement fees!
Amazon continues to increase service fees. For example, new low-volume inventory fees will be added in 2024, which will continue to increase sellers’ sales costs. Therefore, sellers must be careful with their calculations and learn more about how fees are changing. We also We will inform you all of the latest news first-hand! You are also welcome to subscribe to our newsletter so that we can share with you the latest news, knowledge, changes in FBA and e-commerce tactics of big sellers!
