Long Term Storage Fees Archives

This is your semi-annual reminder that Fulfillment by Amazon long term storage fees hit 15 August. There are a few key things to note as we approach 15 August.

Long Term Storage Fees Assessed on All Inventory

A change that Amazon announced at the end of last year, was that Amazon will be assessing long term storage fees on all inventory. It used to be that you wouldn’t be assessed on the first unit, but that is no more.

Be careful what you create removal orders for!

This is particularly concerning, since we’re approaching Q4, but if you create a removal order between now and August 15th for “aged inventory” (e.g. those units that have been in a fulfillment center for longer than 6 months), you cannot send replenishment inventory until 1 January 2018! In other words, if you think you will sell these products during Q4, you may have to eat the storage fees.

Amazon doesn’t plan on doing a free removal promotion

Its only $0.50 a unit, but people seem to love the free removal promotions. Unfortunately, this time around, Amazon is being very clear that they don’t plan on doing any of the sort. Right now, Amazon is not hurting for storage space, or so they lead us to believe. In fact, I received an e-mail in the past week with a free storage fee promotion. Quite the turn from a year ago!

Think rationally about long term storage fees

Many folks see storage fees and start to think of how they can be avoided. That is logical, and its a good plan to do early on. Once Amazon starts sending out notices about the annual fees though, I would argue that you are too late. The fact is, storage fees are a cost of doing business. My fees, if I make no sales of my aged inventory between now and 15 August, will be less than $150. I can live with that. In fact, I won’t even lose sleep over that. So I would encourage you, please, think rationally, don’t go overboard, and don’t risk not being able to send in more of an ASIN during Q4!

Care to share what your estimated long term storage fees will be?

Amazon Long Term Storage Fees – assessed 15 February

Amazon sent a fairly long e-mail that highlighted a number of things:

Long Term Storage Fees will be assessed on 15 February

Units at an Amazon Fulfillment Center for 6-12 Months will be assessed at $11.25 per cubic foot
Units at an Amazon Fulfillment Center for longer than 12 months will be assessed $22.50 per cubic foot
Units at an Amazon Fulfillment Center for longer than 24 months will be test units for Amazon Prime UAV Delivery. (Kidding!)

As mentioned earlier, single units of an ASIN will no longer be exempt from storage fees.

Units will be subject to long term storage fees unless they are removed before 15 February

If you do remove, you will not be able to send in additional units until July 1, 2017 – Which is Likely to late to stock up for (unannounced) Amazon Prime Day 2017.

Unlike past long term storage periods, there will be no free removal promotion

What should you do?

Everyone is different here. I for one used Q4 as an opportunity to clear most of my long term inventory out. That which I haven’t cleared out is seasonal inventory that I have to sit on because, otherwise, I’ll miss that particular season. Now that said, for me, I will remove all but a few units of seasonal inventory and store it at my warehouse until I’m closer to that season. You can only imagine how much my warehouse cleared out for Q4 for example.

Conclusion

The fact is here, that Long Term Storage Fees are a very real cost for Amazon Sellers. I know that folks in the various groups that I participate in are getting better. Others are cutting them even more ruthlessly. The fact is, they are little value add. In this case, you have to assess if not being able to send in that ASIN until 1 July 2017 is worth paying the fee or not. Its a long time to be blocked on an ASIN, and a lot of things can change. So definitely consider that.

Resellers: Long Term Storage Fees hit 15 August!