Sellers Feel the Squeeze After Amazon Announces US MCF Fee Hike
Amazon decided to be the Grinch who spoiled the holidays for US sellers after announcing major fee changes to its Multi-Channel Fulfillment (MCF) program. đź«Ł
Sneaking Fee Increases Just Before Christmas
On December 20th, the eComm giant said they will update their US MCF fees to reflect the recent improvements they have made to offer sellers:
- Faster shipping times (from 7 days to 5 days)
- Advanced shipment tracking capabilities and IT security systems
- Free MCF integrator apps for Big Commerce, Adobe Magento, and Wix
⚠️ The updates will take effect on January 19, 2023.
It seems to us that these improvements most impact customer experience rather than seller benefit. While sellers may feel the effects of faster shipping times, it probably won’t be nearly as much as they’ll feel the strain on their profit margins.
On the Forums page, one seller commented that these adjustments would increase the cost of MCF by a whopping 37% for them. Currently, a 5 oz large standard item costs $5.35 to ship, but in 2023, the fee would climb to $7.35 per unit, making MCF an expensive fulfillment method for many sellers. 🤦‍♀️
Here’s a quick look at how Amazon’s fee adjustments will increase MCF costs for Standard 3-5 Business Days Shipping in 2023:
| Size Tier | Current Rate Card (As of August 16, 2022) | New Rate Card for January 19, 2023 and after |
|---|---|---|
| Small standard 2 oz or less | $4.75 | $7.15 |
| Small standard 2+ to 6 oz | $5.35 | $7.15 |
| Small standard 6+ to 12 oz | $6.20 | $7.80 |
| Small standard 12+ to 16 oz | $7.45 | $8.25 |
| Large standard 2 oz or less | $4.75 | $7.35 |
| Large standard 6 oz or less | $5.35 | $7.35 |
| Large standard 6+ to 12 oz | $6.20 | $8.20 |
| Large standard 12+ to 16 oz | $7.45 | $8.50 |
| Large standard 1+ to 2 lbs | $7.65 | $9.50 |
| Large standard 2+ to 20 lbs | $7.65 + $0.46/lb above first 2 lb | $9.50 + $0.62/lb above first 2 lb |
| Small oversize 2+ to 30 lbs | $12.50 + $0.46/lb above first 2 lb | $16.00 + $0.62/lb above first 2 lb |
| Small oversize Over 30 lb | $24.70 + $0.46/lb above first 30 lb | $32.88 + $0.62/lb above first 30 lb |
| Medium oversize | $20.20 + $0.51/lb above first 2 lb | $25.25 + $0.62/lb above first 2 lb |
| Large oversize | $103.39 + $1.05/lb above first 90 lb | $118.80 + $1.16/lb above first 90 lb |
| Special oversize | $171.99 + $1.10/lb above first 90 lb | $189.19 + $1.21/lb above first 90 lb |
As you can see, Amazon has also made a few adjustments to its weight tiers. Both “2 oz or less” and “2+ to 6 oz” tiers now fall under a single new category: 6 oz or less. 🤔
So, any small standard item weighing less than 6 oz, for instance, will now cost you $7.15/unit to ship via MCF, a $1.80 to $2.40 per unit increase from the current rates.
If you’re using MCF for small and low-cost products (under $20), you might have to rethink your fulfillment strategy to stay profitable next year. You could raise your prices to account for this fee change, switch to FBA Small and Light to take advantage of reduced fulfillment costs, or incentivize shoppers to buy multiple units in one order so you can qualify for MCF shipping discounts.
Related: Amazon Announces Unbranded Packaging for MCF Orders
Tiered Discounts on Multi-Unit Orders
If the cost of shipping a single item is too steep for you, consider giving out discount coupons or bundling items to encourage customers to increase their units per order – for example, get 10% off with a minimum purchase of 3 items.
According to Amazon, when your MCF order has multiple units, you’ll receive up to 50% discount on your fees.
Suppose you’re shipping a 4-unit small standard 6 oz or less order. In that case, you’re going to be charged $3.72, which is 50% less than what you’d be paying for per 1 unit order.
Here’s how discounts will be applied to standard shipping multi-unit orders.
Go to Amazon Supply Chain to view the latest US MCF rates for expedited and priority shipping.
These price hikes are obviously squeezing every penny out of sellers. And if they continue to increase with little room for adjustment (amid soaring gas prices and inflationary pressures), Amazon might just become too expensive not only for sellers but also for customers, forcing them back to shopping in-store or to look for alternative online marketplaces.
If you have any feedback on these updates, send an email at
[email protected].
You can also visit Multi-Channel Fulfillment for more details.
Related: Amazon Hikes FBA Fees Again: What This Means for Your Business
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Chelsea Cohen is an Amazon seller, speaker & consultant. An Amazon expert, her regular clients include 7 & 8-figure sellers. She has been featured on AM/PM Podcast, 7-Figure Sellers Summit, and the Prosper Show & Amazing Summit stages, among others.