Detailed explanation of Amazon’s long-term storage fees and countermeasures
As the world’s leading e-commerce platform, Amazon’s FBA (Fulfillment by Amazon) service provides sellers with convenient logistics and distribution support. However, while enjoying this service, sellers also need to bear a series of fees, including regular inventory storage fees and long-term storage fees. This article aims to introduce in detail Amazon’s policies on long-term storage fees and how sellers can effectively manage and avoid these fees.
Amazon long-term storage fee overview
According to Amazon’s regulations, “long-term” refers to the situation where the product has been stored in Amazon’s fulfillment center for more than half a year. In response to this situation, Amazon has set up a special charging mechanism: for goods stored for 6 to 12 months, it charges $11.25 per cubic foot; for goods stored for more than 12 months, it is charged at $22.50 per cubic foot. standard fees. It’s important to note that long-term storage fees are in addition to regular inventory storage fees and are not charged if a removal order is created or an item is requested to be discarded before being charged.
Why are there long-term storage fees?
Usually, there are two main reasons why products stay in Amazon warehouses for a long time:
- Poor product sales lead to overstocking;
- Due to various reasons, the listing was removed, making the product no longer available for sale.
How to avoid long-term storage fees
In order to avoid high long-term storage fees, sellers can manage it in the following ways:
Remove inventory
Submitting a removal order is one of the effective ways to avoid long-term storage fees. These items will not incur long-term storage fees as long as the removal request is submitted before the inventory count date. Additionally, items in a sellable state can continue to be sold during the removal process.
Automatically delete settings
Sellers can set up automatic deletion options to avoid paying related fees by automatically processing items that may incur long-term storage fees before the 15th of each month.
Inventory disposal
For goods with low value and uncertain sales prospects, you can choose to destroy them. Although destroying goods will also incur certain fees, it is more economical than long-term storage fees.
Selling inventory
Discounting is another common tactic, especially for items that have been around for a long time. Calculate costs and benefits and decide whether to clear inventory with discounts or even freebies.
FBA clearing function
Use Amazon’s FBA liquidation service to recover some of the value from eligible inventory while avoiding long-term storage fees.
Long-term storage fees for unsaleable products
Amazon’s definition of unsellable products includes three types: expired, damaged, and returned. When these products remain in the warehouse for more than 180 days, long-term storage fees will be charged at approximately 15 cents per item per month. The specific calculation formula is: long-term storage fee = 15 cents/month × product quantity × (unit area + extra weight).
Check long-term storage fees
In order to better manage inventory, users should learn how to query long-term storage fees. First, you need to understand the calculation rules of Amazon’s long-term storage fees; then, log in to your Amazon seller account and select the “Long-term Storage Fees” button on the “Inventory” page to enter the query page; finally, enter the date range and SKU information you want to query.
Conclusion
It can be seen from the above introduction that although Amazon’s long-term storage fee system is relatively complicated, as long as sellers can reasonably plan inventory management strategies and make full use of various tools and services provided by the platform, they can effectively reduce costs and improve Operational efficiency. I hope this article can help sellers better understand and deal with Amazon’s long-term storage fees.