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In December 2023 Amazon announced a new fee for FBA inbound shipments, called the Inbound placement service fee. The announcement said they would begin charging sellers in July ’24 for inbound placement. In March of this year, a setting was added to Seller Central allowing sellers to choose a region and 1 of 3 placement options:

Amazon Optimized was the cheapest ($0) option but shipments might be split 5 or more ways.

Currently, the Selling Partner FBA Inbound API has no way to change the inbound placement options or region so the shipment splits and eventual placement fees are driven solely from the FBA Inbound Settings in Seller Central.

In March of this year, to help sellers predict and analyze FBA Inbound Placement fees, ScanPower created an FBA Inbound Placement Calculator in Prep & Ship that estimates fees in bulk for all items in the current batch based on the selected options:

8 months later, after the failure of multiple black-hat techniques by various software selling partners to circumvent them, it is clear inbound placement service fees are here to stay.

On top of shrinking margins, the fees add another layer to FBA Inbound processing. Previously, you could adjust the inventory mix and quantity you send in each batch to generate favorable shipment splits and optimize for the best freight costs.

Now, sellers and 3PLs must choose between streamlined processing, with fewer shipments, and saving on the inbound fees but paying more for freight to multiple distant IDXs. Three different factors (region, splits preference, and inventory mix) complicate the calculus and may change at any moment during the day.

To avoid the fees, choose Amazon optimized placement. The trouble with $0 fees is the number of shipments doubles or triples leading to complicated processing and higher freight charges.

Recently, Amazon further restricted qualification for Amazon Optimized $0 placement fee by requiring shipments to include at least five identical cartons or pallets per item. Each carton or pallet must contain the same quantity per item and the same item mix. For resellers with limited access to higher quantities this means it is harder to avoid the inbound fee, especially for shipments with mixed SKUs.

If you process shipments using the FBA Inbound API with tools such as ScanPower, you will soon have the option to compare placement fees along side freight and transportation charges.

This will allow you to better estimate the total inbound cost of each shipment.

Starting December 2nd, ScanPower will support the new v1 FBA Inbound API with both workflows:

Pack first before placement and transportation options are accepted.

Pack after placement options are accepted. 

One BIG Caveat is that Small Parcel Delivery (SPD) is ONLY supported in the Pack first flow. If you are shipping by partnered small parcel, you must save packing information before you accept placement options (shipment splits and fees). Also, if you want to ship SPD and LTL form the generated shipment splits, you can only do that in the Pack first (left side) flow.

It goes without saying, sellers don’t need more stress in Q4 or big changes to existing FBA processes at this time. Unfortunately, Amazon is more worried about lowering the “cost to serve” for marketplace customers than they are the health of sellers, especially North American sellers. We want to help you with the transition and give you fair warning about the coming changes.

I will be hosting a Q&A every Wednesday until the current API is sundowned . We will be previewing the new API and discussing how it will impact different sellers and 3PLs: 

Join the Zoom Meeting: https://us02web.zoom.us/j/89018524857?pwd=TmcrT2RhWGs3bTVJTHp2L0pmUHFUZz09

NOTE: the current workflow and API will be supported through 12/20/24.

We’re excited to announce our integration with Aura repricer!

Aura has been helping Amazon sellers safeguard profit margins for years. They recently redesigned Aura from the ground up, focusing on faster repricing and smoother integration of new features.

To ​Start a Free Trial 🚀 Mention SCANPOWER and receive an extra month.

If you are selling under $10k/mo and a new Aura user, you can apply for the Early Stage program for $27/mo for up to 12 months. 

Track costs, suppliers, shoppers and other metrics of your business in ScanPower

• See Net payout and ROI as you ship

• Upload Min and Max prices in bulk

Seamlessly transfer costs to Aura and grow your sales profitably

• Powerful AI copilot for Amazon repricing

• Hyperdrive updates prices for your top 50 Amazon listings in under 10 seconds

• Mobile – manage your listings and make vital adjustments on-the-go

SEE HOW SCANPOWER WORKS WITH AURA

We are hosting webinars Tuesday 4/23 and Thursday 4/25 @2PM EST

We’ve seen a lot of consolidation in the e-commerce software service (SAAS) space recently. Aggregators are buying independent software vendors to bring together related verticals within Amazon and across marketplaces. Solutions for advertising optimization are paired with product sourcing or a reimbursement service is paired with listing and shipping, etc. Customers from one vertical can benefit from being connected to sister services and visa versa. The goal is to streamline development, marketing & sales, reach economies of scale and Profit.

The benefit of rolling up solutions and integrating them with each other are clear for the aggregator – not always so for users. New ownership can bring uncertainty. In addition to the specter of increased prices, there are changes in staffing and product direction. Sometimes positive changes are offset by missteps in execution. Even more challenging is bringing multiple top-rated services under a single brand. Our experience has been, and what we hear from sellers, is they want ONLY THE BEST solutions. They don’t mind having separate software subscriptions as long as they are best-in-breed. They are no longer looking for an all-in-one solution because that does not exist. 

What sellers need is for best-in-breed solutions to work together and integrate with each other.

At ScanPower we’re very focused on integrations. In the last three months, we’ve completed 3 integrations and are working on more. The foundation for most integrations is a public API, which allows the two systems to talk with a shared protocol and known data mappings. Our API has been available for over five years and many of our large sellers use it to integrate with their commercial and custom software.

APIs and Integration are increasingly important, not only because they save sellers time. They also allow automation. Automation will soon be the difference between a profitable business and one that treads water. Anything that cannot be automated will absorb a disproportionate amount of time and cost from the business.

In the very near future, logging in to a browser to accomplish business tasks won’t be needed. They will be automated away by scripts and AI agents. Conversations will accomplish more than clicks. When human input is needed, the automation will let us know.

Automation will soon be the difference between a profitable business and one that treads water

I don’t see software aggregators solving this problem. Here’s why:

1. It’s not possible to be best-in-breed without relentless focus on a niche problem set. You can’t do that if you are spending a lot of time building integrations between software which was never designed to work together. You aren’t focused on the core problem and may be ignoring other best-in-breed solutions instead of embracing them.
2. We’ve all heard the quote by Jim Barksdale, then CEO of Netscape, “There are only two ways I know to make money in business: bundling and unbundling”.  Bundling works well when the quality or the depth of the solution is less important. _[1] It stops working when we need higher quality and more responsive solutions.
3. Bundling works poorly during times of rapid technological change, e.g. when streaming video killed cable TV. The same thing is happening in software. AI is changing the pace of innovation. Hand coded software that caters to a Web2 model of a user sitting in front of browser, will no longer work. _[2]
4. Speed of execution is critical. Requirements for sellers are changing monthly within Amazon marketplaces. That means software has to adjust more quickly. Development must be optimized for weekly releases to keep up with the relentless pace of change. Amazon changes can create a flywheel effect by driving new feature requests from sellers, often to lessen the impact of particularly aggressive changes. For example, the most recent round of FBA Inbound placement fees correspond with a new API release. This puts pressure on sellers who turn to their software services for solutions that help reduce the cost of the Amazon fee change. It’s a trifecta of changes for the software service and the net effect is to slow down product development.
5. Innovation is hard when you buy and integrate unrelated software services. If the service isn’t best-in-breed, you’re already playing catch-up with features and workflows that lag behind competitors. Amazon APIs are often upgraded annually, so it’s hard to innovate when you are performing updates on 10s of applications across 50 Selling Partner APIs. At the same time you’re trying to integrate disparate technology stacks. Each app typically uses 10+ cloud services. What if they run in separate clouds? What if database functions, not to mention core code, need to be translated to new languages? The technology challenge is immense.

The most powerful time for startups is when the emergence of a new tech coincides with buyers’ preference shift to quality. This provides startups with the means to create a compelling unbundled product as well as a market uniquely receptive to it

These are just a few reasons I believe independent and highly focused software companies, who aggressively integrate with other best-in-breed software, will serve sellers best. Ultimately it is the sellers who decide!

-Paul

[1][2] https://notes.mtb.xyz/p/bundling-unbundling-and-timing