2025 Updates to Amazon Referral and FBA Fees

Amazon’s decision to freeze referral and Fulfillment by Amazon (FBA) fees for 2025 in the US has been met with mixed reactions, and a closer look suggests that this move may be more self-serving than it appears on the surface. A slew of new fees were already introduced in the first and second quarters of 2024, which squeezed Sellers to the max, so one could argue there’s nothing left to get.

New charges in 2024 included inbound placement fees, low inventory fees, and aged inventory fees. Sure, inbound placement fees were waived if Sellers split the inventory into several inbound shipments themselves and shouldered the burden of the added labor and freight costs. But the costs weren’t waived, just shifted. The fees were introduced to enable Amazon’s shift from a single, national fulfillment center to a regionalized network of 8 fulfillment centers intended to position inventory closer to the customer for faster delivery. The new model requires the positioning of more inventory in more locations, hence the latest fees. So, while Amazon now positions itself as easing the burden on Sellers, the freeze comes after Amazon has lowered its cost of doing business at the expense of third-party Sellers.

The freeze’s timing appears less of an act of generosity and more of a calculated pivot necessitated by external pressures. With limited room left to increase fees without alienating its Seller base, Amazon is using the 2025 strategy to fortify its dominance while attempting to stave off competition from emerging rivals like Temu, which is aggressively recruiting US-based Sellers and Temu is challenging Amazon’s dominance in the budget-friendly market segment.

To its credit, Amazon will be reducing inbound placement fees for certain large and bulky items, with the average decrease being $0.58 per unit, starting January 15, 2025. It will also introduce incentives to encourage Sellers to launch new parent ASINs that qualify for the FBA New Selection Program, such as waived inbound placement fees for up to 100 inbounded units per product from now through March 2025.

With discretionary spending under strain, household staples and personal care items are expected to drive sales in 2025. By incentivizing Sellers to stock these categories and products that Amazon identifies as essential or underrepresented in its catalog, Amazon ensures a robust selection for consumers while positioning itself for continued growth. Amazon’s focus on essentials is part of a broader strategy to ensure its platform remains indispensable. While framed as a benefit to Sellers, the program serves Amazon’s interests by enhancing its marketplace’s appeal to price-conscious consumers – a demographic likely to grow significantly amid economic pressures such as inflation and higher tariffs.

However, let’s not forget that third-party Sellers will ultimately gravitate toward platforms that attract consumers, making Amazon’s efforts as much about retaining customer trust as Seller satisfaction.

Reactions from industry observers suggest cautious optimism. Observers like Eva Hart from Jungle Scout have praised Amazon’s decision as a “welcomed pivot toward easing seller costs.” In contrast, others, such as Tyler Wallis of TripleLine, have urged Sellers to seize this opportunity for strategic planning.

Summary

Amazon’s 2025 fee strategy for third-party Sellers reflects a carefully orchestrated effort to ensure continued growth and self-preservation rather than altruism. The freeze and accompanying incentives are less about easing Seller burdens and more about aligning Sellers’ efforts with Amazon’s strategic goals. As rivals like Temu gain traction despite the launch of Amazon Haul, Amazon’s latest move underscores its reliance on a model that shifts the operational and financial pressures onto Sellers while safeguarding its margins and market share. For many Sellers, though, the freeze offers a momentary reprieve that allows them to shift focus from managing costs to seizing opportunities for new growth.