Recently, Amazon launched a new policy: low inventory level fees, which has brought new pressure on sellers to increase operating costs. This article will explore the details of this new fee and the strategies sellers can use to deal with it.
1. What is the low inventory level fee?
From April 1, 2024, Amazon will begin to charge a low inventory level fee for standard-sized products whose inventory levels are always lower than the buyer’s demand. This fee is mainly to make up for the increased costs incurred by Amazon due to the distribution of goods to various places and the impact of delivery speed.
2. Definition of inventory levels lower than buyer demand
When the long-term historical supply days and short-term historical supply days of a product are both less than 28 days, Amazon defines it as inventory levels lower than buyer demand. The specific calculation method is long-term historical supply days = average daily inventory quantity / average daily shipment quantity of goods. The short-term historical supply days are the average of the past 30 days.
3. Ways to avoid low inventory level fees
Optimize inventory management: Sellers need to closely track inventory levels to ensure that the supply of goods can meet buyer demand and avoid low inventory levels.
Regular replenishment: Replenish inventory in a timely manner and keep inventory levels within an appropriate range to meet the needs of buyers.
Follow up policy changes closely: Amazon’s policies and algorithms change frequently, and sellers need to keep abreast of the latest policies and make corresponding adjustments.
4. Fee exemptions in special circumstances
Newly registered sellers: Newly registered sellers are exempt from low inventory level fees within 365 days after receiving the first piece of inventory.
New products just listed: Newly listed products can apply for exemption from low inventory level fees within 180 days after receiving the first piece of inventory, but they need to register for the Amazon Logistics New Product Warehouse Promotion Program.
Automatically replenished products: Products that are automatically replenished through Amazon’s warehousing and distribution services will not be charged low inventory level fees.
Amazon’s new policy has brought new challenges to sellers, but it also reminds sellers that they need to manage inventory more meticulously. Only with reasonable planning and timely adjustments can sellers avoid unnecessary operating costs and ensure their own interests. Therefore, it is crucial to closely follow policy changes and adjust operating strategies in a timely manner to cope with market changes and challenges.