Amazon fees have been insane lately. I am paying almost double what I used to pay back in 2015. Amazon has introduced several fees and in Q4 those fees are even higher. So now more than ever, it’s essential to sell a product that moves off the shelf quick. The faster you sell the better it is for your bank account. But this post is not to decry, it is more to inform and as such, let’s break down what you need to understand about Amazon FBA long term storage fees.
On the 15th of each month, Fulfillment by Amazon (FBA) conducts an inventory cleanup. On these dates, inventory that has been in the United States fulfillment centers for more than 365 days incur a long-term storage fee of $5.44 per cubic foot.
All sellable inventory units that have been in Amazon FCs for over twelve months are eligible for monthly long term storage (LTSF) charges. Following are the LTSF rates:
Long-term Storage Fees
|Inventory cleanup date||Items in fulfillment centers more than 365 days|
|15th of every month||$5.44 per cubic foot|
How to figure out what your long term storage fees will be
Multiply length x width x height in centimeters to get the volume. Divide the volume by 28,316.84 cubic centimeters (30.48cm x 30.48cm x 30.48cm = 28,316.84), which is the equivalent of 1 cubic foot. Example: A Unit measuring 47cm x 12cm x 10cm divided by 28,316.84 = 0.199 cu. ft.
One thing you can do before the 15th of each month is to sell or remove the units that will be eligible for LTSF to avoid being charged. You can view units of your inventory which will be eligible for LTSF and the estimated amount that you might be charged for those units using the Inventory Age View.
What are long term storage fee examples
Inventory cleanup date: 15th of each month
|Toaster: 25.5 x 18.5 x 17 cm||Storage duration||Applicable LTSF|
|1 unit||More than 365 days||$1.54|
|2 units||More than 365 days||$3.08|
|10 units||More than 365 days||$15.42|
|Cabinet: 64 x 18 x 18 cm||Storage duration||Applicable LTSF|
|1 unit||More than 365 days||$3.99|
|2 units||More than 365 days||$7.97|
|10 units||More than 365 days||$39.87|
How To Identify Inventory Subject To Fees
Use the Inventory Age and Inventory Health reports to identify which ASINs in your inventory are subject to long-term storage fees. For each ASIN, you can see your inventory by the amount of time it has been in a fulfillment center:
- 0 to 90 days
- 91 to 180 days
- 181 to 270 days
- 271 to 365 days
- More than 365 days
How To Avoid Long-Term Storage Fees
How to cut down on long term storage fees
Active management of older inventory can help you avoid long-term storage fees. To remove older inventory before the next inventory cleanup date, you can:
- Submit a removal order
- Set up automated removals for inventory subject to long-term storage fees
Another option would be to use a 3PL, or a 3rd party fulfillment warehouse. Some of them, ones with flat fees and clear structure are great for storing and having them do essentially what Amazon does with FBA. In order to choose one that is right for you, there are a few things you need to check:
Make sure they have flat fees and you understand them I have dealt with some that have hidden fees. One I recently dealt with was e-fulfillment and they had fees that they did not openly disclosed.
One of those fees was something called comprehensive support, and I thought this fee was riduclous so I inquired what it was. What I thought was that it was a fee for talking to them about what I wanted done. When I spoke to a representative, they informed me that it was a fee for using their system.
So essentially, they were charging me to be their customer even when they were doing nothing to/with my account. I was being charged just for having an account. These are the types of things you have to ask about before using a 3PL if you want to use them to avoid some Amazon fees. But if you are not careful, you could end up paying more so ask about fees and follow up with more questions and get a fees list. The more you know the better.
If your inventory is not moving,submit a removal order. If you submit a removal order for inventory before the cleanup date, that inventory won’t incur a long-term storage fee, even if it isn’t physically removed before the date. The deadline for submitting a removal order is 11:59 p.m. (UTC+0) on the 14th of the month.
Inventory in sellable condition will be available for sale until the removal is complete. You will not be charged a removal order fee until the inventory has been returned to you or disposed of.
You could also set up automated removals of inventory designated for removal based on your automated long-term storage fee removal settings. This is a practical way to do it so that you are not thinking about it. To set up automated removals, go to the settings menu under inventory, then enter the requested information and the address you want the items to be sent to. You do this once and when a product is not selling, then you can trigger it to be removed and sent to you. You can still sell the product as fulfilled by merchant which means that when someone places an order, after the item has been sent to you, you have to send the order to the customer.
These are practical steps to aid you in avoiding some of the fees with Amazon FBA. If you are starting out with FBA, check out my other post on 5 tips you need to know when starting out. If you have a questions, thoughts, etc leave a comment below.