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If you’re an Amazon seller utilizing the Fulfilled by Amazon (FBA) service, understanding the intricacies of Amazon FBA storage fees is crucial for your business’s profitability. In this comprehensive guide, we will break down the different types of fees involved, provide step-by-step calculations, and offer practical strategies to minimize your storage costs effectively.
What Are Amazon FBA Storage Fees?
Amazon FBA storage fees are charges imposed on sellers for storing their inventory in Amazon’s fulfillment centers. There are two primary types of storage fees:
a. Short-Term Storage Fees:
These apply to your inventory stored for less than 365 days. Amazon typically calculates this fee on a per cubic foot basis and charges it on a monthly basis.
b. Long-Term Storage costs:
Long-term storage costs may be charged if your products have been in Amazon’s fulfilment centres for longer than 365 days. These costs are levied by Amazon twice a year, between February and August. Calculating Amazon FBA Storage Fees
To calculate your storage fees accurately, follow these steps:
Step 1:
Determine your monthly average volume (MAV) in cubic feet. You can find this in your seller account under “FBA Inventory Age” and “Monthly Storage Fees.
Step 2:
Identify the size tier of your products (standard or oversized) and the corresponding storage fee rates from Amazon’s fee schedule.
Step 3
Multiply your MAV by the appropriate storage fee rate to find your monthly storage fees.
Step 4:
For long-term storage fees, locate inventory that has been in storage for over 365 days and assess the additional charges.
Tips to Minimize Storage Costs
Reducing your Amazon FBA storage fees is essential for maintaining a healthy profit margin. Here are some strategies to help you achieve this:
a. Inventory Management:
Keep a close eye on your inventory levels and analyze demand patterns to avoid overstocking. Regularly review your sales data to ensure you have enough stock to meet customer demands without accumulating excess storage fees.
b. Utilize Amazon’s Inventory Performance Index (IPI):
Maintaining a high IPI score can lead to storage fee discounts. Focus on fast-selling products, improve inventory turnover, and optimize your stocking strategies to increase your IPI score.
c. Utilize Amazon’s Storage Fee Waiver Periods:
Amazon occasionally offers storage fee waivers for newly launched products. Take advantage of these promotional periods to reduce your storage costs.
Monitoring Your Amazon FBA Storage Fees
Amazon provides various tools and reports to help you monitor your storage fees efficiently. Use the “Storage Fee” report to track monthly storage charges, and the “Inventory Age” report to identify items approaching the long-term storage fee threshold.
Conclusion
Understanding and managing FBA storage fees is crucial for Amazon sellers. Familiarize yourself with the types of fees, plan inventory efficiently, and calculate storage costs accurately using provided guidelines. This enables better budgeting, informed inventory decisions, and optimization of stock levels to minimize fees and maintain product availability.
Readmore : Amazon Fba Success Rate : Effective Factors
FAQ’s
Amazon imposes storage fees on sellers for storing their inventory in its fulfillment centers.There are two main types of storage fees: short-term storage fees for inventory stored less than 365 days and long-term storage fees for inventory stored for over 365 days.
Short-term storage fees are typically calculated on a per cubic foot basis. Sellers can find their monthly average volume (MAV) in cubic feet in their seller account under “FBA Inventory Age” and “Monthly Storage Fees.”To determine the monthly storage fees, multiply the MAV by the appropriate storage fee rate.
Short-term storage fees are charged on a monthly basis. Sellers should review their monthly storage fee charges regularly to assess the impact on their overall business expenses.
