We’ve got a bit of good news/bad news for you. The bad news is Amazon’s implementing new long-term storage fees, but the good news is FeedbackExpress has you covered so you can go into it informed and keep rocking your all-star seller status.
Why is Amazon Changing Their Long-Term Storage Fees?
The biggest reason Amazon is making a change to their long-term storage fees is to deal with all the excess products in their warehouses. Too much of it gets left sitting around for months and months — not only are sellers not making money on that stuff, but Amazon isn’t either. So, the change in fees is a gentle nudge for sellers to start moving on getting their stock into buyers’ hands.
Amazon’s business model is efficiency and you see it in all aspects, from two-day (or faster) shipping, having multiple streaming services available, and delivery to more and more locations. Changing the fees is simply another extension of that, so if you approach it with an efficiency mindset too, you’ll be able to take this new change in stride.
What Can You Expect?
The biggest change you’ll notice is long-term storage fees will increase. Because you’ll pay more for stuff that lies around, it’s important to develop strategies on moving it quickly and efficiently. We’ve written many blog posts about this before, so it may be worthwhile to go over them again:
- Understanding how the Inventory Performance Index works
- How you can make more sales on slow-moving inventory
- Knowing the various sellers fees inside and out
- And good best practices to help promote your listings
What the New Fees Will Look Like
The new fees have already been in place for a few months now, but in case you need a primer, this is what you can expect:
January to September
- Standard Size: $0.69 per cubic foot
- Oversize: $0.48 per cubic foot
October to December
- Standard Size: $2.40 per cubic foot
- Oversize: $1.20 per cubic foot
The change from before is an extra $0.05 per cubic foot. For a lot of sellers, like those with small inventories or high profit margins, it’s not really a big deal. But for other sellers, the ones with larger inventories or low profit margins, the higher fees can be harder to stomach.
And that’s just for regular storage fees. When it comes to long-term storage fees, there’s another schedule to pay attention to as well.
Inventory assessment date
- Monthly (used to be semi-annually on the 15th of February and August
Items in fulfillment centres for 181 to 365 days
- $3.45 per cubic foot per month (used to be $11.25 per cubic foot per six months)
Items in fulfillment centres for 365+ days
- $6.90 per cubic foot per month (used to be $22.50 per cubic foot per six months)
To see the changes in black and white, let’s look at the costs on the smallest scale: one cubic foot. With the old fees, you’d pay $11.25 for six months, or $22.50 for a year, to store them long term. But now, it’ll cost you $20.70 for the six months, and $41.40 for the year. That’s almost a double increase! Hopefully seeing it written out like this will help provide more motivation for trying to sell some of that old-moving stock.
Ah, but wait — there’s still one more fee we have to talk about: the inventory assessment fee that’ll now be tallied every month instead of every six months. This will be $0.50 per unit on products that have been sitting in fulfillment centres for longer than 365 days, but it’ll now be assessed once a month instead of just twice a year.
It can be unavoidable to store items long-term, like seasonal products that just don’t sell at other times during the year. But for smaller, less expensive things, like cables, chargers, accessories and the like, they really shouldn’t be sitting around in storage. It’s too straightforward to come up with strategies to move them into buyers’ hands.