Amazon FBA Long Term Storage Fees Changes for 2018
Amazon FBA Storage Fees – The History
According to Amazon, “storage fees are based on the daily average volume (measured in cubic feet) for the space your inventory occupies in (Amazon) fulfillment centers.”
These fees charged by Amazon vary based on the product-size, tier, and month. Monthly fees were usually charged between the 7th and 15th of the month following the month the fee was applicable to. For example, if you were looking for your inventory storage fee for the month of March you would look at the April payments report for transactions between April 7-15.
Historically, Amazon sellers have also been responsible for semi-annual, long-term storage fees that are applied to products stored in an Amazon fulfillment center for 6 months or longer. These fees are in addition to the monthly inventory storage fee. Note: Fees are not charged if a removal order has been submitted prior to the fee being charged.
Amazon FBA Long Term Storage Fees Changes for 2018
As an Amazon seller, you are now probably aware of the FBA storage fees that went into effect last week, September 15, 2018. Well, it’s true – Amazon is making changes again! In an effort to clean-up their fulfillment centers for quicker sales, Amazon FBA long term storage fee policies have been modified for the third time this year. In April, the long term storage fee increased. Minimum storage fees were modified on August 15. And, now, FBA fees will be charged on a monthly-basis instead of semi-annually. Here’s the breakdown:
What Amazon fee changes should we expect?
Monthly Inventory Storage Fees (April 1 Updates)
On April 1, 2018, phase 1 of FBA storage fee changes took place this year. Monthly storage fees were increased by $0.05 per cubic foot for standard and oversized items. This impacted sellers based on the daily average volume their products occupy within FBA centers. Amazon monthly inventory storage fees are detailed more here.
From Q1 to Q3, online sellers are now charged $0.69 per cubic foot of space occupied by standard-sized items. Oversized items, are now calculated at $0.43 per cubic foot of storage space. These fees significantly increase in Q4 reaching a total of $2.40 for standard-sized items and $1.20 for the oversized ones.
Minimum Long Term Storage Fees (August 15 Updates)
On August 15, just prior to the September updates, a minimum charge of $0.50 per unit per month for items that are in long term storage for a year (365 days) or more was implemented.
This applies to any unit that has been at an Amazon warehouse for 12 months or longer. If an item has been in any of Amazon’s fulfillment centers for more than 365 days, the seller will then be charged a minimum long-term storage fee (charged per unit) or a long-term storage fee (charged per cubic foot), whichever is higher.
Long Term Storage Fees (September 15 Updates)
And one of the biggest changes for sellers was implemented on September 15. Long-term FBA storage fees went from being charged on a semi-annual basis to a monthly basis.
Previously, Amazon charged its sellers an $11.25 long-term storage fee per cubic foot of space the sellers’ inventory took up in an FBA center. This was for items that were sitting in an Amazon warehouse for more than six months, but did not exceed one year. This amount doubled for items that had been in storage for more than 12 months – $22.50 per cubic foot. Amazon had been billing its merchants this fee semi-annually until now.
Now, items in fulfillment centers for 6 months to one year will be assessed and charged with a monthly long-term storage fee of $3.45 per cubic foot. Items that have been collecting dust in Amazon’s fulfillment centers beyond 12 months will be billed $6.90 per cubic foot.
Amazon Fulfillment Center Storage Fees Breakdown
|Inventory Fee Dates||# Days Items in Amazon FBA||# Days Items in Amazon FBA|
|181 to 265 days||365 days or more|
|Before September 15, 2018||Semi-Annual: Feb. 15 & Aug. 15||$11.25 / cubic foot||$22.50 / cubic foot|
|On September 15, 2018 and after||Monthly: on the 15th of every month||$3.45 / cubic foot||$6.90 / cubic foot|
*Started September 15, 2018 – Amazon can charge a minimum of $0.50 per unit per month for items that have been in FBA for 365 days or more. The seller will be charged whichever fee is higher – the total Amazon long-term storage fees or the minimum long-term storage fee (calculated by number of items in long-term FBA).
Why are Amazon FBA storage fees changing?
What’s the deal with their fee upgrades, you ask? Well one thing is for sure, Amazon is not trying to steal money from you or put you out of business. As an online marketplace, Amazon’s revenue mainly come from you, their sellers. And to follow their mission of providing great buying experience for their shoppers (your customers), they have to change things up a bit. At this point, they’re just changing their business model to accommodate more sellers who sell their products more frequently. Increasing their storage fees is the company’s way of making sure you do your best to sell your products, which should also be your top priority as it will lead to an increase in your sales.
How to avoid Amazon long term storage fees?
The best way to keep your long-term storage fees from piling up is to sell more of your products. Amazon encourages you to do so with these FBA long-term storage fee changes as they prefer to make better use of their storage facilities with fast-moving products. Inherently, then Amazon FBA is doing what it was meant to in the first place –serving as a quick storage for your goods as you work to sell them off.
If you feel like you will encounter challenges making profits with such fees, you can always file for a removal order. Make sure to submit your request at least a day before the monthly inventory cleanup, which happens on the 15th of every month. As long you file for a removal order, you won’t be charged the fee; (even if the items in question are still physically in FBA).