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Inbound Fee Reduction: The "Split vs. Pay" Algorithm
Using data modeling to determine the optimal inventory placement strategy for Amazon FBA.
“The math was complicated, but LogicMile made it simple. They did the sorting in China, and I saved 15% on every shipment. No brainer.”
— Amazon FBA Seller
Paying Placement Fees?
The LogicMile Solution
We ran a “Landed Cost Simulation”:
Cost Modeling
We compared three scenarios: 1. Pay Fee (Single Destination), 2. Amazon Global Logistics (AGL), 3. LogicMile Split Shipment Strategy.
The "Sweet Spot" Analysis
We identified that for their shipment volume (200kg - 500kg), paying the fee was actually more expensive than the extra shipping cost of splitting.
Execution
We handled the complex sorting at our origin warehouse, labeling boxes for 5 different destinations before they even left China.
The Outcome
Our analysis proved that splitting the shipment was the optimal route.
By doing the work at origin (China) where labor is cheaper, rather than paying Amazon’s US fees, we saved the client 15% on their total landed cost for every batch.
The Challenge
Amazon introduced a massive “Inbound Placement Fee” for sellers who send inventory to a single warehouse. The alternative was splitting shipments to 5+ locations across the US.
The client was confused: Should they pay the fee for simplicity, or pay extra shipping costs to split the goods? They lacked the data to make the profitable choice.