At the beginning of Q1 2023, Amazon sellers were met with the announcement of increased FBA fees on Amazon starting on January 17th, 2023. This news may have left some Amazon sellers feeling uncertain about the future of their business, as increased inflation has already impacted costs across the board. However, it is important to remember that with any change comes the opportunity for growth and innovation.
Direct Agents Key Recommendations: Reevaluate Your Inventory Management Strategy
It’s time to get creative. Amazon sellers need to rethink their inventory management strategies to stay profitable. Luckily, we have several strategies to help Amazon sellers recession-proof their business.
- Send more frequent, smaller shipments to Amazon – Determine an average run rate to reduce your overall storage fees.
- Rethink your product packaging – Minimize size and weight by bundling small items or using smaller and more lightweight packaging.
- Use a combination of FBA and FBM – Leverage FBM backup for larger quantities or slower-moving items and utilize 3P FBM vendors for multi-channel fulfillment.
- Take advantage of Amazon’s US FBA New Selection Program – This program helps boost by offering incentives for new products offered through FBA. These products are eligible for free storage, free liquidation, and free return processing for a limited time. Brand-registered sellers may also be eligible for a monthly rebate of 10% on sales of eligible branded new to FBA parent ASINs.
Inventory Planning & Forecasting
Strategists at Direct Agents leverage several tools to help sellers make crucial inventory decisions.
- Inventory Tracker – Easily track run rate to know how much inventory to keep on hand. The inventory tracker combines recent sales data, specific fees for your brand, and current sell-through/inbound units to make recommendations for FBA units to send.
- Include COGs / Fees in your Forecasting – Include these to understand if the media mix and planned inventory needed to achieve your sales goals are realistic.
- Profitability Analysis – This takes into account seller fees, spending fees, agency fees, and COGs to track toward forecasting profitability goals.
While the fee changes may seem daunting, there are still ways to adapt and succeed as an Amazon seller. Stay informed about the changes by reading the overview of the 2023 fee changes and the breakdown of the FBA fulfillment fees. With a little creativity and planning, you can recession-proof your business and come out on top.
For an overview of the 2023 fee changes see here. For a breakdown of the FBA fulfillment fees see here.
If you’re interested in learning more about Direct Agents’ Amazon offerings and how our eCommerce team can help your brand grow on Amazon, email email@example.com to learn more.
Amira Desai, eCommerce & Google Strategy, Direct Agents