How Will Increasing Fulfillment Fees Impact Your Business in 2017?

By February 6, 2017Blog
With rising fulfillment costs in 2017, find out what it means for your business and how Shipped By Newegg can help.

As more businesses focus on providing easy and seamless shopping experiences for millions of their customers, storing and fulfilling orders in 2017 looks to be increasingly more expensive for sellers. These new fulfillment fee changes are designed to help optimize the available space at the fulfillment centers like Amazon while delivery companies like USPS and UPS have also put in place higher rates for 2017. So what increases can you expect this year for your fulfillment costs?

Starting February 22, the monthly inventory fees for Amazon are going up, especially when it gets closer to the holiday season. You can expect to pay about 4% more compared to 2016, and expect an even greater increase during October to December. Fulfillment fees for small, lightweight items will decrease up to 6%, which is great, but fulfillment fees for bulkier and heavier items will see a significant increase of almost 20%, which is not so great for sellers. FedEx, for instance, changed their surcharge fees on January 2, 2017, which means that U.S. freight services go from $120 per pallet to $130 while U.S. express package services (FedEx Ground) sees a small bump from $3.70 to $3.90 per package.https://www.newegg.com/sellers/index.php/2017/02/06/will-rising-fulfillment-fees-impact-business-2017/

Businesses selling media products will also see a significant increase to match those of non-media items. In 2016, media fees were about $1.56, but they could be up to $2.41 which is a 54% increase! And be prepared for fees on items $300 or more since Amazon is doing away with the zero-fee fulfillment discount, which will now be based on the product sizing fees that apply.

Lastly, sellers will be asked more frequently to send items to multiple fulfillment centers when creating their shipping plans, but will be charged less if they choose to ship to fewer destinations based on a per-item service fee. Although you may be asked to send items more frequently to fulfillment centers, it could be cheaper if the request is closely followed compared to last year (ie. You may pay less if asked to ship to three locations and you only ship to two, based on the item size.)

With all these changes and increases coming to Amazon and other fulfillment services soon, you’re probably wondering how your own business and profits will be affected.

What does this mean for my business?

As more sellers scale their business and orders, the need for more fulfillment services rises which can put them at the mercy of higher fulfillment costs year over year. In turn, available space now comes at a premium and forces you to decide which items are worth sending to fulfillment centers and during what months, not including storage fees you’ll incur when items don’t move out of inventory.

What other fulfillment options can I look into?

At Newegg, you’ll find that our fulfillment rates up to 18% lower than the upcoming fees changes with other fulfillment services. This is due to the fact that we haven’t raised our fulfillment costs for 2017, which means a better bottom line for you. With our Shipped By Newegg (SBN) service, not only will you find lower fulfillment rates, but also other benefits that help your business save money.

While other fulfillment services are doing away with the zero-fee fulfillment discount, we wanted to keep that intact so you can focus more on getting those items to customers without an added cost to your business or them. Our inbound rate and pick/pack fees are about 5% lower than the competition, and may continue to lower as other fulfillment services raise their fees throughout the year. Even if you don’t sell your items on Newegg, you can take advantage of our Multi-Channel Order Fulfillment services to get your products in customers’ hands fast and at lower costs for your business.

Whether you fulfill your own orders or use other fulfillment services, Newegg is here to help your business grow by tapping into our 30+ million customer base with interests in not only computer electronics, but from a wide range of categories including Home Automation to Outdoor & Garden to Sports Equipment and more. Gain some peace of mind with Shipped By Newegg for your fulfillment needs, and if you would like to know more about our fulfillment or seller services, send us an email with your questions at MarketplaceMarketing@Newegg.com.