Find out how much your Amazon FBA storage fees are so you know your TRUE profit selling on Amazon. In this video I will also show you 6 ways to avoid Amazon FBA long term storage fees so you can improve your ROI.
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If you're looking to start a business selling products on Amazon, then you'll need to know and understand the product listing criteria and how to rank on Amazon FBA. Yes, you can start making money selling on Amazon, regardless of your experience selling online.
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6 Ways To Avoid Amazon FBA Long Term Storage Fees - Audio file
Amazon Storage Fees - 6 Ways To Avoid Amazon FBA Long Term Storage Fees-Video transcript
Hey guys and welcome back to my channel. In this video I would like to go over how to avoid Amazon long term storage fees , so be sure to watch all the way through so you don't miss any of the important details as we do have a lot to cover.
Now, before I hop into this video, if you are new to this channel you're going to want to subscribe as I talk about the best ways to make a full time income with Amazon FBA and always get straight to the point.
So please consider subscribing and turning on your post notifications if you like channels that don’t waste your valuable time, with that said let's get right into this video.
So, in the middle of every month, Amazon does a cleanup in their fulfillment centers. Any inventory that has been there for more than 365 days is charged additional fees.
If you’re an Amazon FBA seller, it’s vital that you understand long-term storage fees, including which of your products are due to be charged and when. Otherwise, it can come as a very unwelcome surprise, and cut in to your profit margins big-time.
This video is about finding out how much you will pay in long-term storage fees, and how to take proactive steps towards reducing your Amazon FBA long-term storage fees.
So, which items are charged long-term storage fees? If you have a product with multiple units in stock as Amazon won’t charge for 1 single unit that has been in FBA inventory for 1 year or longer, you will be charged a long-term storage fee.
Amazon emails sellers about a month before each charge date alerting you if they expect you’ll owe long-term storage fees.
You can also find out by checking your Amazon reports. The inventory age report and inventory health report both give you information on how long your inventory has been in Amazon fulfillment centers.
Additionally, the recommended removals report calculates for you the units that are expected to be charged with long-term storage fees, and how many will need to be removed in order to avoid extra fees.
Any items assessed with long-term storage fees will be charged $6.90 per cubic foot, or $0.15 per unit – whichever is larger. This means $0.15 is the minimum charge per unit. These charges aren’t multiplicative – you only get charged the space they take up, or a flat price per unit.
You can use the same reports I just mentioned to check how much your long-term storage fees will be. Here’s how to access that. Log in to Seller Central. Go to the Inventory tab and click on Manage Inventory.
Then click Inventory Dashboard, Scroll down below to the FBA Inventory Age Box and click View Details which will bring up the report you want to see.
This report will show you the Inventory Age for each product, how many units have been in storage for more than 12 months and the estimate long-term storage fee for each product.
To calculate your total estimated fees just download the report as an excel file, open the file in Excel or Google Sheets and create a sum formula to add up the estimated fees for each product.
Amazon recommends some ways to avoid paying these fees. This includes lowering your price, advertising the product on Amazon and by making a cancellation order.
But here are some other ways you can reduce your Amazon storage fees for next week and in the future. You can avoid paying additional storage fees by strategically timing your next restock and by offloading items.
Keep in mind that these dates are calculated from the 15th of each month. So if you can offload any lagging inventory before the 15th, you’ll avoid incurring these costs.
The first way to avoid extra charges is to create a removal order. If you have lagging inventory you don’t think you will be able to sell before the deadline, you can request Amazon to remove them and return them to you.
After receiving your stock back, you can think about what you want to do with it, keep it and fulfill orders yourself, sell it on another marketplace, or try to return them to your supplier without worrying about incurring fees from Amazon.
Another way is to lower prices. If your stock is lagging in fulfillment centers, there’s a reason for this. Chances are, you’ve ordered too much stock, or you’re trying to sell at too high a price.
Dropping your prices may be what you need to kick start your products’ sales, particularly if you’re getting a lot of impressions but not selling a lot.
Just be careful with dropping your prices very low with the intention of raising them back up later. This can hurt some of your metrics, including the chances of winning the buy box. So in the long-term, one-off promotions make more sense.
You could also run Amazon Sponsored Ads campaigns. Amazon ads are an extremely valuable advertising channel for Amazon sellers, capable of a big boost in sales if you put the money in.
Some well-managed Sponsored Ads or Display Ads campaigns could be what you need to clear out excess inventory before the deadline.
A flash sale is your best option to turn a potential negative into a positive. You can use on-Amazon promotions, such as coupons or lightning deals to do this. Or, you can run external traffic campaigns and generate a bit of excitement, while building an audience.
Everyone loves a sale. Take advantage of this by creating a promotion for your products with excess inventory, and promoting it in channels such as email, social media ads or Facebook groups.
Create a campaign for your promotion, and you can offer high-discount single-use promo codes to clear out your stock while collecting a really valuable asset in the form of customer email signups.
As for the discount amount, consider your specific situation before deciding on this. If you’re about to be charged a lot in long-term storage fees, for example, if your products are quite big, or you have a lot of excess product, it will make sense to run a large discount. Just consider that you won’t be able to ask for reviews from these purchases.
You can also take advantage of free removal promotions. Amazon will sometimes offer a promotion for FBA sellers to remove items from Fulfillment By Amazon warehouses for free. This promotion waives removal order fees for items that are removed during the promotion period.
There’s no guarantee that this promotion will be offered, but when it is, I recommend using it to your advantage.
One thing to note is that when removing items to avoid Amazon long term storage fees there is a deadline that needs to expire before you can send the item back to FBA warehouses. Typically this is 3 to 6 months in the future.
For example if you remove an item prior to February to avoid long term storage fees, you cannot send the item back to FBA warehouses until July. The timelines may vary slightly, but make sure you are aware of them in advance.
Now, one of the best ways to avoid long term storage fees is to manage the amount of inventory that you send in to FBA warehouses in the first place. If you only send in quantities that are likely to sell in 6 months or less then you should have minimal long term storage fees to worry about.
Over time you should be able to get better and better at this. Use your experience to guide you.
One thing I definitely recommend doing is for any items that do end up subject to storage fees, is to evaluate why. Take a look at if you should have bought the item in the first place, if there was an issue with the listing, if there was an issue with pricing, or anything else you can identify. Then use that information to improve the products you buy in the future.
Hidden costs like shipping and storage can eat away at your profits, if you don’t think ahead. Ideally, you’ll order enough stock so that you don’t run out, but not so much that you’ll have products sitting in fulfillment centers for more than a year.
However, the best-laid plans of mice and men often go awry. Unforeseen circumstances can crop up, and you can be looking at unplanned fees. If this should happen, the important thing is knowing what to expect, and how to deal with the situation.
Now you know the basics of Amazon FBA long-term storage fees. Make sure to take the necessary action to minimize these costs.
Now, as you can see, there are a lot of steps involved in building an Amazon business. And I wouldn't recommend piecing together everything by simply watching videos on YouTube. This is why I suggest investing your time in a great free training that can guide you through this process.
I recommend this training because this is the best training on the market and one that I have personally gone through. They walk you through every aspect of what it takes to start, grow and scale your Amazon business.
This training will build off of what I talk about inside my videos so I left a link for you in the description and if you're serious about selling on Amazon I encourage you to check it out!
Thanks for watching and please make sure to watch the next videos with more Amazon FBA tips that will show up right about now.