If you’re selling on Amazon, fees are as inevitable as death and taxes. Sometimes obscure and unexpected, they devour a significant portion of a transaction’s value. But fees don’t have to kill already-slim profit margins. Smart management can claw back those precious transaction dollars. 

Let’s explore how brands can identify and reduce these hidden costs, using strategies proven to protect profitability and drive sustainable growth. 

The Financial Impact of Amazon’s Hidden Fees 

Amazon’s fees can consume as much as 30% of a transaction’s value, according to industry averages. And that’s lost profitability that inevitably slows growth and limits reinvestment.  

Moreover, studies show that reducing fees by even small percentages can skyrocket profitability gains. Seven figures of revenue can easily result in six figures of fees — a profit sieve any brand would prefer to plug.  

Optimize Fulfilled by Amazon (FBA) Costs 

FBA fees are often one of the most significant expenses for sellers. Amazon calculates shipping fees based on either dimensional weight or actual weight — whichever is greater — which can inflate costs for lightweight but bulky items. Factors like inefficient packaging or dimensional weight inaccuracies can make matters worse. 

• Streamline Packaging: Use precise dimensional measurements and eliminate excessive dunnage to avoid higher fee categories. 

• Combine Shipments: Partnering with a seller like Recom can enable full truckload or pallet shipments, reducing costs through economies of scale. 

• Bundle Items: Consider offering product bundles and combination packages that can reduce costs over individually sold and shipped items.  

• Reduce Return Rates & Fees: High return rates can devastate profitability, so do everything you can to mitigate it. For example, if you sell apparel, ensure your sizing charts and information are as clear and accurate for the majority of consumers as possible.      

Recom also utilizes advanced tools, such as laser-based Cubiscan machines, to capture precise product dimensions and optimize packaging. For example, a brand selling refillable pouches reduced its shipping costs by $3 per unit through packaging adjustments — over $200,000 annually in savings. 

Likewise, we reduced FBA fees for one of our partners by 15% through strategic packaging optimization, translating to tens of thousands in annual savings. 

It’s also possible for brands to receive unjustifiable or mistaken fees. Recom guards against these incidents with technologies and processes that refute and claw back excessive charges. 

Adapt to Multi-Destination Inbound Placement Fees 

In March 2024, Amazon introduced a significant change to its fee structure: the multi-destination inbound placement fee. Sellers must now choose ship: 

• To a single location: $0.16-$0.68 per unit for standard-sized products and $1.10-$5.95 per unit for large and bulky products 

• To two or three locations: $0.12-$0.48 per unit for standard-sized shipments and $0.55-$3.32 for large and bulky products 

• Amazon-Optimized Shipment Splits to four or more locations: No placement fee 

Navigate 2025 Fee Changes 

Amazon announced several fee adjustments for 2025, including: 

• Lower inbound placement service fees for large, bulky products, averaging a reduction of $0.58 per unit, effective January 15, 2025. 

• Fee waivers for up to 100 units for new ASINs enrolled in the FBA New Selection Program from December 1, 2024, to March 31, 2025. 

• Additional fee discounts for the New Seller Incentives and FBA New Selection programs starting Jan. 15, 2025. 

These changes present new opportunities for brands to optimize their fee structures, particularly in high-volume product categories. 

Unlock Long-Term Savings with Smarter Inventory Management 

Amazon imposes penalties for both low inventory (Days of Cover below Amazon standards) and excess stock (long-term storage fees). Effective forecasting and inventory management are essential to avoid these costs. Recom employs a proprietary system that integrates: 

• Catalog Management 

• Creative Optimization 

• Brand Control 

• Growth Marketing 

• Operations & Fulfillment 

• Data Insights 

This holistic approach ensures seamless coordination across teams, enabling brands to avoid stockouts while minimizing overstock fees. Proactive forecasting prevented a Recom-partnered brand from incurring over $50,000 in storage fees over six months. 

But what if Amazon claims it didn’t receive all your shipments? It’s surprisingly common, and it requires undergoing inbound shipment reconciliation to prove you sent your claimed number of units. Recom documents proof of inbound shipments by integrating advanced technologies that scan records and weigh boxes. 

The Final Word 

Navigating Amazon’s complex fee structures requires expertise, specialized equipment, and other resources that many brands lack. Recom’s proven systems and technologies provide brands with immediate access to years of operational refinements, driving growth while protecting profitability. Discover for yourself what we can do for your brand.