Strategic Upgrade or Hidden Cost? What Amazon’s New AWD Fees Mean for Sellers

Amazon Warehousing and Distribution (AWD) is a logistics solution designed for sellers who need cost-effective, long-term inventory storage with automated replenishment to Fulfillment by Amazon (FBA). In essence, AWD acts as your dedicated Amazon-managed distribution hub. Sellers ship bulk inventory to AWD, and Amazon handles the internal movement between AWD and FBA fulfillment centers.

This system is particularly valuable for scaling operations in the U.S., simplifying prep and inbound logistics, and optimizing shipping efficiency.

Getting started with AWD is simple. In Seller Central, go to Inventory → Warehousing and Distribution (AWD) and create your first shipment. The process involves six essential steps:

• Select Products – Choose the items you want to send.
• Confirm Shipping Terms – Set up your shipping preferences.
• Print Box Labels – Required for each carton.
• Confirm Carrier – Choose Amazon Partnered Carrier or your own.
• Print Pallet Labels – For pallet shipments via partnered carrier only.
• Enter Tracking Number – Required for pallet shipments.

Once enrolled, you’ll gain access to the AWD inventory dashboard where you can monitor shipment status, manage stock levels, and trigger automated replenishments to FBA.

Before you start using Amazon Warehousing and Distribution (AWD), it’s essential to understand which products qualify for this program. Each ASIN is reviewed during the shipment creation process, and any item that doesn’t meet Amazon’s eligibility criteria will be rejected automatically.

In general, most items that are eligible for Fulfillment by Amazon (FBA) are also suitable for AWD — particularly non-perishable, non-hazardous, standard-size products. However, certain categories, such as food and temperature-sensitive items, may face restrictions. You can find Amazon’s full list of limitations here.

To ensure proper handling and long-term storage, Amazon excludes the following from AWD shipments:

• Products with a shelf life of less than 185 days
• Frozen or meltable goods
• Hazmat items or products prohibited in FBA
• Restricted categories: Amazon devices, gift cards, high-value items, jewelry, and watches
• Oversized or heavy units (over 25x25x25 inches or 49 lbs)

Attempting to send restricted goods may result in failed shipments or account flags, so be sure to check product eligibility before dispatch.

The AWD Inventory Dashboard serves as your control center for everything related to warehouse stock. It allows you to:

• View real-time inventory levels across the AWD network
• Track shipment status and inbound performance
• Enable automated replenishment to FBA
• Launch manual inventory transfers between warehouses
• Analyze SKU-level performance and forecast needs

Each SKU receives a recommended stock level calculated by Amazon’s system. You’ll see alerts when items are understocked or overstocked, along with suggested actions to optimize your supply chain.

You can also configure custom replenishment rules per SKU — defining minimum and maximum inventory thresholds. This is especially valuable for seasonal products or new launches where inventory balance is critical to avoid long-term storage fees or lost sales.

One of the core benefits of Amazon Warehousing and Distribution (AWD) is the ability to automatically replenish FBA inventory. Amazon handles internal transfers between AWD and FBA, ensuring the right quantities are moved at the right time — with no action needed from the seller. This reduces the risk of out-of-stock issues and saves valuable time.

Even more importantly, inventory replenished via AWD does not count toward your FBA storage limits, giving sellers an operational and financial edge.

Prefer to stay in full control? You can disable automatic replenishment and manually manage transfers from AWD to FBA — a useful option when launching new products or running time-sensitive promotions.

Note: Amazon calculates an Auto-Replenishment Ratio for each account. If 70% or more of your shipments are replenished automatically, you may qualify for fee discounts and FBA program exemptions.

To help sellers analyze inventory flow, Amazon provides a dedicated reporting tool: AWD Inventory Ledger. This report tracks every inventory-related event per SKU, including:

• Receipt of goods
• Internal transfers
• Damaged or lost units
• Remaining on-hand quantity

There are two reporting modes:

• Detailed View – lists each transaction individually with timestamps and status
• Summary View – aggregates activity by day, week, or month for trend analysis

This data helps you identify discrepancies, file reimbursement claims, and optimize your supply chain efficiency at the SKU level.

If you sell through external channels — such as distributors, wholesale partners, your own website, or third-party logistics providers — Amazon offers Multi-Channel Distribution (MCD) directly from AWD.

Through MCD, you can:

• Create outbound orders in the AWD dashboard
• Choose your destination (e.g., a retail warehouse, 3PL, or own facility)
• Upload shipping labels (when required)

Amazon then ships the products in plain, unbranded packaging, ideal for B2B and white-label fulfillment

All MCD shipments can be monitored in your AWD portal, with full status tracking available in the Track Replenishments section.

Previous MCD rates (before April 2025):

Handling fees:

• $2.50 per carton under the Base Rate Plan
• $2.13 per carton under the Integrated Rate Plan

Transportation fees:

• Flat $1.65 per cubic foot, regardless of distance

Starting April 1, 2025, Amazon introduced a split fee model for AWD handling — inbound and outbound services are now billed separately. While this increases transparency, it also requires more precise logistics planning on the seller’s side.

In addition, MCD shipping fees are no longer flat-rate. Transportation costs now vary based on weight and distance, with separate rate structures for small parcel shipments and palletized freight (LTL/TL).

Amazon uses the greater of actual weight or dimensional weight (“shipping weight”) to calculate fees.

Dimensional weight formulas:

• Carton: (Length × Width × Height in inches) ÷ 139
• Pallet: (L × W × H in inches) ÷ 250

Make sure to optimize your packaging to avoid unnecessary overcharges, especially when shipping lightweight, bulky items.

As of April 1, 2025, Amazon has introduced a new fee model for Amazon Warehousing and Distribution (AWD). The updated structure includes separate inbound and outbound processing charges, revised discount eligibility rules, and a more flexible fee system based on how sellers manage inventory.

Sellers using AWD in 2025 are subject to three main categories of service fees:

1. Storage Fee – A monthly charge based on the cubic footage your inventory occupies within AWD facilities.
2. Processing Fee – Now split into Inbound Processing (goods arriving at AWD) and Outbound Processing (goods leaving AWD, e.g., to FBA or MCD).
3. Transportation Fee – The cost to move products from AWD to Fulfillment by Amazon (FBA) or to other distribution channels via Multi-Channel Distribution (MCD).

Previously, AWD fees were largely determined by the type of carrier used for inbound shipments. In 2025, Amazon has shifted toward a behavior-based pricing model. Key factors influencing your AWD costs now include:

• Whether you use automatic vs. manual inventory replenishment
• Your adherence to Amazon's recommended stock levels
• The overall efficiency of your inbound and outbound logistics

This approach allows Amazon to incentivize best practices and reward sellers who optimize their supply chain through automation and predictive inventory planning.

Amazon is rolling out a revised AWD pricing structure beginning April 1, 2025, replacing the old two-tiered system with a more dynamic, performance-based model.

Amazon offered two pricing tiers:

• Base Rate — applied when sellers used their own carrier to deliver to AWD
• Integrated Rate — offered when shipping through Amazon Partnered Carrier, Amazon Global Logistics, or Global Selling SEND

Amazon is decoupling pricing from the inbound shipping method and introducing three new AWD rate categories:

1. Base Rate - Applied when the seller manually manages FBA replenishment from AWD.
2. Smart Storage Rate - A discounted tier automatically applied to eligible SKUs that meet both of the following criteria:

• At least 70% of FBA replenishments are done via AWD Auto-Replenishment
• Inventory for that SKU covers ≥70 days of demand based on 30- and 90-day sales averages

3. Amazon Managed Rate - Available when using the full Supply Chain by Amazon model, where Amazon handles end-to-end logistics.

In addition, processing fees are now split: inbound and outbound handling are charged separately.

Amazon monitors two metrics daily for each SKU:

1. Auto-Replenishment Ratio:  ≥70% of FBA restocks must be fulfilled via AWD Auto-Replenishment
2. Historical Days of Coverage:  Average inventory coverage based on 30- and 90-day demand must be ≥70 days

Amazon evaluates these criteria on the 25th of each month and applies the appropriate pricing tier starting the following month.

If your products were received at an AWD facility before the new pricing model went into effect, Amazon will apply a transitional billing structure:

• Inbound processing will be billed at 50% of the former rate
• Outbound processing will be charged at the new rate of $1.35 per carton

These charges will be spread across three months (April–June 2025) to ease the financial impact on sellers.

Using AWD Auto-Replenishment doesn’t just streamline logistics — it can also reduce your total fulfillment costs. Sellers who meet the 70% auto-replenishment threshold benefit from the following FBA fee exemptions:

• Low Inventory Level Fee is waived
• Aged Inventory Surcharge is not applied, provided eligibility conditions are met

Important: If you manually restrict minimum or maximum stock levels for specific SKUs, Amazon may still apply certain surcharges, even if auto-replenishment is enabled.

Amazon’s April 2025 update to the AWD pricing model marks a strategic shift toward automated and predictive supply chain management. The old rate system tied to carrier type is gone — now, seller behavior determines the rates you receive.

Sellers who embrace automation, maintain stable stock levels, and allow Amazon to manage restocking via AWD can unlock reduced rates — typically 10–20% lower than standard fees. On the other hand, sellers relying on manual processes will continue paying the Base Rate, with fewer incentives and higher costs.

Additionally, the updated Multi-Channel Distribution (MCD) fees, now based on distance and weight, require more precise logistics planning to protect profit margins. The split between inbound and outbound processing fees improves transparency but calls for tighter cost tracking and operational accuracy.

In short, this reform sends a clear signal: Amazon wants greater control over seller inventory flows. Sellers who align with this system — through automation and data-driven inventory planning — will be best positioned to scale efficiently and cost-effectively in 2025 and beyond.

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