If you're an Amazon seller using Fulfillment by Amazon (FBA), you've likely noticed a line item on your bill called "Amazon Placement Service Fee" or "Inventory Placement Fee." This charge, often overlooked by newer sellers, can have a significant impact on your profit margins, especially if you're sending inventory into Amazon frequently or in bulk.
In this article, we’ll break down what Amazon Placement Fees are, how they work, the hidden challenges they present, and most importantly, how to manage and minimize them using smart strategies and profit monitoring tools.
In 2024, Amazon introduced the FBA Inbound Placement Service Fee as part of broader changes to its FBA fee structure. Amazon Placement Fees are charges you incur when Amazon decides to split your inventory shipment to multiple fulfillment centers (FCs) across the country, even if you create a single shipment in Seller Central.
When you create a shipping plan, Amazon’s system determines which fulfillment centers need your inventory based on their forecasted demand, existing inventory levels, and regional customer demand. While this helps optimize delivery times and reduce shipping costs to customers, it can mean higher shipping costs for sellers.
Amazon offers two inventory placement settings:
Example: Sending 500 standard-size items via IPS may cost you $0.30 per unit = $150. But shipping the same items to three different FCs yourself might cost you $200 in total carrier charges.
The key trade-off: more time and effort vs. more fees.
As of the latest fee structure (check Amazon’s official fee page), placement service fees depend on the size and weight of your items:
Fees add up fast, especially for high-volume sellers or those with oversized products.
Understanding placement fees is only half the battle. The real challenge is in managing them efficiently while scaling your business. Here are some of the reasons sellers find Amazon Placement Fees challenging for their business.
You create a shipment expecting to send your items to one or two locations. Instead, Amazon may split your shipment into 3–5 FCs in different states, increasing time and cost.
Splitting inventory results in multiple shipments, often to distant FCs. You bear the brunt of that cost unless using discounted partner carriers which still add up.
Multiple shipment destinations increase the risk of miscounts, lost inventory, or delays in getting your listings live.
Placement fees or extra shipping expenses silently erode your profit margin, especially if you're not regularly auditing them.
Sellers have a few strategic levers to manage placement fees more efficiently:
If you're shipping many units of the same ASIN or shipping heavy/oversized items, using IPS can actually save money compared to paying multiple shipping charges.
When it works best:
When to avoid:
Send your bulk inventory to a nearby 3PL or staging warehouse, then create FBA shipments in batches. This gives you more control over:
By consolidating inventory in one location before sending to Amazon, you reduce surprises and can choose economical split shipments.
Instead of sending multiple smaller shipments weekly, batch your inventory and ship less frequently in larger quantities. This reduces:
Inventory tools like ConnectStock can help you plan and optimize restocks.
Fulfillment centers are often region-specific. Sending inventory from within or near major metro areas (e.g., California, Texas, New York) can reduce the number of FC splits.
Some savvy sellers even choose 3PLs based on their proximity to Amazon’s major FC hubs.
If you're using Distributed Inventory Placement, reduce costs by choosing Amazon’s partnered carriers (like UPS and FedEx), which offer steep discounts.
However, remember that even partnered rates can become expensive with multiple shipments. Always compare total landed costs.
Managing placement fees manually is not scalable. These fees can be very high, and without seeing them per item, your profit numbers aren’t telling the full story.
The good news? With ConnectBooks, you can get precise profit per product, with every AWD and Placement Fee fully accounted for, which closes a big gap in your profit and loss visibility. Amazon sellers can simply download the fee reports from Seller Central and upload them directly into ConnectBooks - with just one click - and get the clarity you need.
Give ConnectBooks a try and see why it’s the ideal solution for sellers to track, audit, and manage these fees in real time.
Here are a few more ways to protect your profit margins:
Use your Amazon transaction report to filter for placement service fees. Compare month-to-month changes and identify patterns or inefficiencies.
Factor in placement fees + inbound shipping + product cost + packaging. Your profit calculator should reflect the real net margin, not just the Amazon sales price.
Run trials: one month with IPS enabled, one month without. Track cost differences and determine which works better for your business model.
Sending excess inventory leads to higher storage fees and more splits. Use ConnectStock to keep shipments lean and efficient.
Amazon Placement Fees aren’t inherently bad. They serve a purpose in optimizing the customer delivery experience. But if unmanaged, they can silently eat into your profits and complicate your logistics operations.
By understanding how the fees work, strategizing your shipping plans, and using the right tools to track costs, you can turn this hidden fee into a manageable line item, or even an advantage.
Whether you're a growing private label brand or a high-volume reseller, proactive inventory planning and real-time profit tracking are essential. Because in the world of Amazon, efficiency is profit.
Log in to Seller Central, Go to the Reports tab, then select Fulfillment, access the FBA Placement Fees Report, on the left-hand side, find the Payments section, click on FBA Inbound Placement Service Fees.
Yes. Placement fees are tied to inbound shipping logistics and distribution, while fulfillment fees cover picking, packing, and shipping customer orders.
Amazon optimizes inventory distribution for faster delivery to customers. Shipment splits ensure your products are stocked closer to where buyers are located, improving delivery speed and Buy Box eligibility.
Not always. If your inventory is already optimally located, or if you follow Amazon’s suggested routing plan, you may avoid placement fees entirely.
Yes! ConnectBooks can help itemize FBA fees, including AWD and placement fees. Try it out and get the clarity you’ve been asking for.
Want to dig deeper into your Amazon fees? Contact us - we’re happy to help.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
Ready to level up? Start making smarter, data-driven decisions every step of the way. Try ConnectBooks Free Today or Schedule a Demo
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