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On August 15 and February 15 of each year, Amazon charges long-term storage fees for items stored at FBA fulfillment centers. If items have been at the warehouse for longer than 6 months as of the fee date, those items are charged $11.25 per cubic foot; items at the warehouse longer than 12 months are charged $22.50 per cubic foot.
In the past, Amazon has granted an exemption from the long-term storage fee for one unit per ASIN. Basically, the long-term storage fee only applied to items with multiple units at the warehouses. If your item was a one-off, there was no long term storage fee.
Effective this February, this exemption will end. Amazon will assess a fee on all inventory that has been in a U.S. fulfillment center for six months or more.
Here are the details:
- Long-term storage fees will apply to all units that remain in U.S. fulfillment centers for six to 12 months ($11.25 per cubic foot) or 12 months or more ($22.50 per cubic foot). Sign into Seller Central to learn more.
- Monthly inventory storage fees increased on November 1, 2016, and these fees will remain until December 31, 2016. Learn more here.
- Weight handling fees will be reduced for all items shipped in November and December. These reduced fees are designed to offset the increase in monthly storage fees for sellers who reduce or sell through inventory. Learn more here.
You can use the new Storage Fee Comparison Report in Seller Central to compare your fees for ASINs sold from December 2015 to the storage and weight-handling fees you will be paying for them in December 2016.
How can I check my inventory levels?
You can identify your aged inventory and sales data on the Inventory Age page in Seller Central. Use the Inventory Health report or available-quantity (sellable) column in the downloadable version of the Inventory Age report to identify ASINs with one unit of inventory. The Manage Excess Inventory page can also help you identify inventory with greater-than-desired days of supply.
This will change will undoubtedly affect many sellers, especially those who deal with long-tail inventory like books or shoes. Amazon has made it clear over the years that they don’t want to be a storage center; they want to deal with fast moving inventory. Whether you were ready for it or not, now is the time to take stock of your inventory and make proactive decisions.
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A few tips to consider:
- When it comes to your slow-moving inventory, only store 1-2 units at Amazon and find a less expensive place to store any remaining units of that ASIN.
- Avoid going too deep on products by keeping your inventory stock levels around 4-8 weeks worth of products.
- If you’ve been accustomed to setting your prices when you send in inventory and then never looking at the prices again, you’re going to need to adapt and begin checking your prices on at least a semi-regular basis to make sure they’re still competitive. Be proactive in repricing throughout the year so that you don’t have to be reactive in repricing every August 14 or February 14 to avoid losing money to long-term storage fees.
- It may seem slow at first, but by tightening your sourcing parameters and looking for faster-moving inventory, you will have the opportunity to expand your abilities in product sourcing.
- If you improve your sourcing skills and find better inventory, you will get more sales and make more profits. In other words, this is an incredible opportunity to increase your bottom line!
And remember, the increase in fees doesn’t start until mid-February. You still have the rest of Q4 and all of January to sell through your slow-moving inventory. Time to take advantage of holiday buying by pricing to sell!