Amazon Storage Fees: How Much Are They (and How Can You Avoid Them)?
The Fulfilment with Amazon (FBA) program gives sellers who want to scale their businesses multiple advantages and options. However, for those not aware, Amazon storage fees don’t just apply to individual and professional selling plans. Depending on how long you store inventory with Amazon, additional long-term storage fees may also apply.
As with any of Amazon’s storage fees, long-term storage costs can soon add up, and they don’t always make financial sense for sellers. For that reason, we’ll explain all about these charges, and more importantly, how to avoid them.
Amazon long-term storage fees explained
Like regular Amazon storage fees, Amazon will charge you monthly long-term storage costs. However, these fees don’t apply to all inventory. Amazon only applies these charges to merchandise that has been in a fulfillment center for over 365 days. Amazon charges these fees because it wants to keep stock fresh and free up valuable storage space.
Amazon starts counting down the 365-day deadline from the day inventory arrives at its fulfillment centers.
The cost of Amazon long-term storage fees
Long-term storage fees cost $6.90 per cubic foot or $0.15 per item, depending on which is greater. Amazon will assess these fees on the 15th of every month.
Below is an example of what your costs might look like:
Source: Amazon Seller Central
Lowering your Amazon storage fees
Depending on the volume of slow-selling stock you have, storage can get expensive. However, there are ways to keep your costs down. If you’ve already paid these fees, Amazon suggests using the Inventory Health report to find items that exceed the deadline so you can clear up stagnant inventory and avoid future charges.
Another way Amazon suggests to lower these fees is to use its Recommended Removals report. This report uses Amazon Standard Identification Numbers, or ASINs. From there, you can identify items you’d need to remove from inventory to reduce or prevent additional fees.
Avoiding further Amazon storage fees
If you have inventory nearing the date and haven’t used either of the above options, it’s possible to avoid fees altogether. There are two main ways you can do this:
Check inventory age
One way to find items that may be reaching the 365-day limit is to check your Amazon Inventory in your Amazon Seller Central Account. Just click on Inventory Dashboard and go to the Inventory Age option. You can then manually remove items.
Another method to avoid fees is using automated set-up removals. Go to seller central and choose the Automation option. From there select Remove inventory subject to a long-term storage fee automatically from the menu.
Creating a removal order
Before Amazon can remove stock, you must first file a removal order. Amazon must receive your removal order by 11:59 p.m. (PT) on the clean-up date, which is the 14th of the month.
To create a removal order, go to your Manage Inventory page in Seller Central. Choose the items to remove. Then go to the Action menu and choose Create removal order. Follow the steps, and then decide whether you’d like the items returned or disposed of. By disposing of stock, you’ll incur a small fee for each item.
Any sellable inventory will remain available for purchase until Amazon completes the removal process. Under these circumstances, Amazon states sellers “will not be charged a removal order fee until the inventory has been returned to you or disposed of.”
Keeping stock moving
Ideally, the best way of limiting these fees is to keep stock moving fast. While there are times when even the most advanced sellers will experience slower sales, there’s plenty you can do to get stock out the door, such as:
- Sourcing unique products you can add a unique twist to
- Researching more carefully before you buy, and tracking continuing trends
- Keeping up with new trends and adjusting stock accordingly
- Adjusting your pricing or updating your description’s keywords
- Making special offers available
- Offering free shipping
- Considering a PPC (pay-per-click) campaign if it’s financially viable
If all that fails, perhaps the stock just isn’t right for Amazon. In that case, liquidating the items may be a possible way forward.
Optimize your profits and get Amazon storage fees under control with AccelerList
By now, you’ll be familiar with Amazon long-term storage fees and how to avoid them.
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