AMAZON FBA STORAGE FEES

09-09-2024 04:50 PM Comment(s)

What Are Amazon FBA Storage Fees?

When you store your products in Amazon’s warehouses, you incur storage fees. These are split into two main categories:

1. Monthly Inventory Storage Fees (Short-Term Fees)

2. Long-Term Storage Fees

These fees are charged to your Amazon seller account monthly, typically between the 7th and 15th of the month following the period in which the fees were incurred. The calculation is based on the daily average volume of space your inventory occupies, influenced by product type, size-tier, and the time of year. Amazon frequently updates these fees, with the most recent changes taking effect in 2024.

1. Monthly Inventory FBA Storage Fees

Your monthly storage fees depend on the volume of space your products take up in cubic feet and are divided into two components:

a. Basic Storage Fees

The basic storage fee is determined by the size of your product and the time of year. Amazon has seasonal variations in fees, with off-peak rates from January to September and higher peak season rates from October to December. Additionally, storage fees for dangerous goods are higher.

Starting April 2024, Amazon is reducing off-peak storage fees by $0.09 per cubic foot. This discount will appear on your May bill, reflecting storage costs for April. However, fees for large, bulky items and peak season storage will remain unchanged.

b. Storage Utilization Surcharge

To be subject to this surcharge, you need to meet the following criteria:

You have a Professional seller account.
Your first shipment was made over 365 days ago.
Your average daily inventory volume exceeds 25 cubic feet.
Your storage utilization ratio exceeds 26 weeks (22 weeks from April 1, 2024).

What Is the Storage Utilization Ratio?

The storage utilization ratio measures the efficiency of your inventory use. It’s calculated by dividing your average daily inventory by the average daily amount shipped over the past 13 weeks. This ratio helps determine if you will incur a storage utilization surcharge. You can monitor your storage utilization ratio on the FBA dashboard.

2024 Changes: From April 1st, 2024, the surcharge will apply to Professional sellers whose average inventory storage time exceeds 22 weeks. Products in stock for less than 30 days will be exempt, and items automatically restocked by Amazon will also be eligible for an exemption starting June 1st, 2024.

Amazon Aged Inventory Surcharge

The Aged Inventory Surcharge, formerly known as the long-term storage fee, is an additional charge for inventory that remains in Amazon’s fulfillment centers for over 180 days (181 days or more). This fee is assessed based on a snapshot of your inventory taken on the 15th of each month and is charged between the 18th and 22nd of the same month, in addition to your regular monthly inventory storage fee.

2. Tips to Avoid Long-Term Storage Fees

Tip 1: Monitor Inventory Levels:

Regularly check your inventory levels and ensure you’re not holding excess stock in Amazon’s warehouses.

Tip 2: Use Amazon’s Tools:

Utilize Amazon’s Inventory Performance Index (IPI) to get insights into your inventory management and make informed decisions.

Tip 3: Implement a Removal Strategy:

Regularly review and remove slow-moving or obsolete inventory to avoid long-term storage fees.

Tip 4: Optimize Listings:

Ensure your product listings are optimized to improve sales velocity and reduce the likelihood of inventory aging.

Understanding and managing Amazon FBA storage fees effectively can significantly impact your profitability. By staying informed about fee changes and implementing strategic inventory management practices, you can minimize your storage costs and keep your business running smoothly