Amazon CPG Digest - 11.24.24

Amazon announcement on FBA fees changes in 2025

I do not remember a year when Amazon has not raised, or adjusted their FBA fees. Announcement usually comes late each year, with fees changes, often not in favor of sellers, taking effect Q1 of the following year.

Well, well, Christmas in November.

Amazon just announced there will be NO increase in FBA fees for 2025, no new fee types. There will be even reduction in some fees.

Amazon’s theme: simplicity, stability, and cost management

Reductions and new benefits for 3P sellers:

1. Lower Inbound Placement Fees for Bulky Items

2. Fee waivers for new SKUs (enrolled Dec 1, 2024-Mar 31, 2025)

3. Enhanced Incentives: greater fee discounts for targeted product categories (essentials, high-demand/low-availability products, and popular brands)

We can thank market forces of competition in the form of Walmart+, Temu, TikTop Shop for Amazon’ decision to not increase fees.

What does that mean for you?

1. More profitable growth on Amazon - FBA fees are virtually impossible to maneuver around. They are fixed fees based on your product category, size, price. Fee waivers, reductions, and no fee increases means more confidence in profitable growth on the platform

2. Product launches with shorter path to sales and margins - very generous fees incentives for new SKUs. Amazon wants you to sell more, of more products

3. Reward for essentials and high demand - rejoice CPG essentials! And e-commerce meritocracy of being rewarded for selling more. Examples of these incentives are waived referral fees, PPC credits, Vine credits.

Some of these incentives are already in place, here is a real example:

A client’s CPG new launch SKU receives a referral fee waiver bonus equal to 10% of monthly sales. Because of our growing sales velocity this bonus covers a referral fee.

That increased their unit profit margin from 20% to 32%.

While I am sober about Amazon’s reasons for pausing on fees increases (basically they were forced to pause on increases) I am very excited for you, for my clients, for all 3P sellers.

When it comes to e-commerce we are in a sweet spot of opportunity for Amazon.

It is still the dominant online force that matters for sales, brand building, and opening retail doors, as many of clients tell me. But thanks to growing competition Amazon now is under pressure to stay competitive, defend its position as a leader. And that means keeping fees for sellers and costs to operate on the platform competitive.

What’s your 2025 theme for Amazon channel? Growth? Profitability? Reply to let me know.

 Holiday Q4 timeline

 November 21 - December 02 - Amazon kicks off Black Friday and Cyber Monday Deals. If you signed up for Prime Exclusive Discounts, you saw that this discount started 11/21 for Black Friday Deals

December 02 - December 16 - this is what I call the sweet spot of top of the bell curve of holiday sales. In my years of experience this has proven to be key two weeks of holiday shopping, regardless of a category

December 16 - December 22 - peak is subsiding but still going strong. Here are last minute shoppers. If you are lucky some of your competition is already OOS. Perhaps you could have less or even no promotions at this point. Last minute shoppers can really be an impulsive kind

December 23 - December 25 - Death Valley zone for holiday sales

December 26 - January 2 - for some reason we just write off this week, at least in business. It’s very underestimated: shoppers are very much there, many armed with gift cards from Christmas, many competitors are OOS.

January - essentials and back to ‘real’ life CPG products step forward. There is an upswing of returns, but CPG is not impacted as much as soft lines and electronics.

Saludos,

Irina