If you’re an Amazon Seller, you probably got an e-mail. If not, you can read all the gory detail of the changes to FBA fees in this post, or in the source article.
Monthly Inventory Changes
Amazon is perhaps a slave to its own success, when it comes to its Fulfillment by Amazon (FBA) service. The result, was back in March, Amazon started limiting quantities for particular ASINs. This made adding products not just to your inventory, but also to shipments, before buying very important. Well now Amazon, perhaps smartly so, is increasing the monthly storage fees. In the case of November and December, those fees are going to increase rather substantially, which means you will really want to be sure that your products are moving. Here’s the table:
Reduced Weight Handling FBA Fees in November and December
Perhaps to offset the additional storage fees, or just to incentivize attractive pricing, Amazon will be decreasing the weight handling fees. This isn’t as drastic as the increases in storage fees, but its a pretty nice gesture, and should certainly facilitate their goal of attractive pricing so things are sold in November and December. Here’s Standard size:
and here’s Oversize:
Like I said, not a huge savings, but something of a positive, since for the most part, I think we are all looking for a very quick sales velocity during the forth quarter.
Box Content Information Becomes Mandatory
Starting 1 November, 2016, Amazon will start penalizing those that don’t provide box content information. In fact, it was September of last year, that Amazon came out with an incentive for early adopters. I seem to think that they meant to require box content a whole lot sooner than 14 months later, so its not a huge surprise. Quite honestly, its not even a big deal, in my view, especially if you aren’t doing multiple boxes. If you are, its maybe a couple extra minutes. Again, nothing groundbreaking. And if that extra couple minutes is too much effort, Amazon is happy to charge you an extra $0.10 per unit January to October, and $0.15 per unit in November and December. Seems like a fair deal to me.
Preparing for Q4 – Determine Inventory Age and Coverage Needs
If you’ve made it this far, then I’ll give you more than just reporting the news. So as we prepare for the new storage fees, it is important first to determine your inventory age, the little graphic below illustrates how you can get the appropriate report – the easy string is: Seller Central > Reports > Fulfillment > Inventory Age > Request Download:
Amazon exports as a CSV file, but if you open the folder, you can select “Open With” then select Microsoft Excel. The key parts are in red, namely, the age of your inventory.
Now you know how long your inventory has been sitting at an FBA Fulfillment Center, but how much inventory should you be sending into Amazon? (And if you are doing any kind of scale and want to avoid fees – the answer is not “all of it”). You can find the data to make the right answer by going to Seller Central > Reports > Business Reports > Inventory in Stock
Obviously, you want to make sure you have enough inventory that you aren’t missing out on sales, but, that you’re not paying storage fees. There’s obviously some give and take, so you have to decide which you’re more willing to do – accept storage fees, or missed opportunities. If only it were that simple! Obviously competition plays into this too, but that is a post for another time.
Amazon’s announcement today isn’t unexpected. Quite simply, I figured it would’ve been much worse. Clearly FBA Fulfillment Centers have been reeling from a ton of slow moving inventory, so the fact that FBA fees are only raising the little they are, seems like we kind’ve dodge a bit of a bullet. It will certainly make things awfully interesting in November and December, when every day will matter (as if it didn’t before), and hopefully these increased fees and lower handling fees do not backfire and increase the amount of time from sale to ship. Time can only tell.
Are these increase fees surprising to you? Will they change your strategy for Q4?