FBA selection program: How does it work?

As profitability becomes increasingly elusive for Amazon sellers due to rising Amazon fees, leveraging the platform’s various programs strategically has become paramount to maintain probability of one’s business. The FBA Selection Program emerges as a potential lifeline, designed to alleviate financial strain by offering storage fee rebates to sellers meeting specific eligibility criteria. However, can this program truly counteract the detrimental impact of Amazon’s new fees on seller profitability? While promising relief from escalating prices and financial obstacles, the FBA Selection Program may come at a cost, particularly with stringent requirement that sellers need to meet the near-perfect Inventory Performance Index score. Sellers must carefully weigh the program’s benefits against its inherent trade-offs to determine its viability as a sustainable solution. In this article we will present the advantages of the FBA selection program.

What is FBA selection?

10% rebate on average for sales of eligible ASINs: Enrolled sellers receive a monthly average rebate of 10% for sales of eligible parent ASINs that are new to FBA. Amazon calculates the rebate based on the product category and accounts for the referral fees that are charged, to provide you with a rebate between 0% and 12%. The rebate is applied to your fulfillment fees the following month that it is earned, and any unused amount expires one year after first applied to your account. For eligible branded and non-branded parent ASINs that are new-to-FBA, the rebate applies to up to 50 units for eligible non-standard size items and up to 100 units for eligible standard-size items for 120 days after the first inventory-received date.

Free monthly storage and free liquidations for standard-size ASINs: No monthly storage fees will be charged for the first 100 units of each new parent ASIN for 120 days after the first unit is received at a fulfillment center. You can liquidate any of those first 100 units within 180 days after the first inventory-received date with no liquidation fees.

Free monthly storage and free liquidations for non-standard size ASINs: No monthly storage fees will be charged for the first 50 units of each new parent ASIN for 120 days after the first unit is received at a fulfillment center. You can liquidate any of those first 50 units within 180 days after the first inventory-received date with no liquidation fees.

Additional benefits for apparel and shoes: We’ll waive return processing fees for up to 20 units of each standard-size parent ASIN. Returned items must be received at a fulfillment center within 180 days of the first inventory-received date.

Global enrollment: You only need to enroll once and program benefits will be applied in each Amazon store automatically where you have an active account, determined based on your MCID and email, and have sent eligible new selection to fulfillment centers.

Limited to new-to-FBA parent ASINs: After you enroll in the program, you can use the fee waiver program benefits for an unlimited number of new-to-FBA parent ASINs that you create.

FBA Selection Program: What are the Requirements?

Here are the criteria you need to meet to be eligible:

Sellers Eligibility

The FBA New Selection Program is available for enrollment by Professional sellers. To be eligible you need to maintain an Inventory Performance Index (IPI) score of 300 or higher. If you haven’t been assigned an IPI score yet, you can still enroll and receive the program’s benefits initially. However, your eligibility status will be updated daily based on your IPI score.
You’ll remain eligible until the next bi-annual assessment on April 1st and September 1st, regardless of IPI score fluctuations before those dates. If your IPI score falls below 300 during the assessment, you’ll be removed from the program. Conversely, if your IPI score reaches 300 or higher on any daily assessment, even before the bi-annual evaluation, you’ll regain eligibility.
To qualify new products for the program’s free monthly storage, free liquidations, free return processing benefits, and branded product sales rebate, you must be eligible on the date when your first new-to-FBA ASIN is received at a fulfillment center.

ASIN Eligibility

Standard-size and non-standard size (including small, medium and large non-standard size, but not special non-standard size) items are eligible for the program.
Parent ASINs must be new to FBA.
ASINs in Media categories and used items are not eligible. Media categories are Books, DVDs, Music, Software & Computer/Video Games, Video, Video Game Consoles, and Video Game Accessories.
Only apparel and shoes ASINs are eligible for free return processing

For the rebate specifically, unbranded child ASINs that are already seller-fulfilled and have five or fewer unit sales per week (on a trailing four-week average with a four-week window, with the evaluation window concluding one day before the first inbound into FBA) won’t be eligible for the rebate if introduced to FBA.

Does the new inventory level fees pose an issue to the seller eligibility for FBA selection program?

The fee changes introduced by Amazon in late December, particularly the low inventory level fees exerting additional financial strain, have sparked significant outcry from sellers all over Amazon forums. If you are an Amazon seller, you have likely witnessed these discussions, many of which raise legitimate concerns about conflicting and confusing Amazon policies.

A closer look at the FBA selection program’s eligibility criteria, alongside the low inventory level fees, reveals some contradictions that could impact and overlap with the existing requirements for the FBA selection program. Indeed, to remain eligible for the program, sellers need to maintain a healthy Inventory Performance Index (IPI) score and sell-through rate. However, adhering to Amazon’s low inventory level fee policy requires keeping inventory levels balanced between 28 days and 90 days, which could adversely affect those same IPI and sell-through metrics. This conflicting scenario forces sellers into difficult decisions about which costs they are willing to incur, sacrificing either their program eligibility by allowing inventory to dwindle, or absorbing the additional fees associated with higher inventory volumes. Compounding the dilemma, the IPI itself factors in various performance metrics, making it a delicate balancing act for sellers to navigate.

Check this page to learn more about how IPI is calculated.

Considering the challenging environment for third-party sellers on Amazon this year, many merchants are actively seeking alternative solutions to mitigate the impact of new fees. We want to remind you that the FBA Selection Program has eligibility requirements that sellers need to meet, making it a selective opportunity not available to everyone. Additionally, while the program offers advantages, such as storage fee rebates, it does not eliminate other fees changes imposed by Amazon. The Low Inventory Level fee may negatively affect inventory management strategies, seemingly conflicting with the program’s cost-saving objectives. Sellers should carefully evaluate the benefits of the FBA Selection Program against these potential drawbacks to determine if it aligns with their specific business needs and goals.