Amazon sellers who use Fulfillment by Amazon (FBA) are responsible for paying storage fees based on how much inventory is being stored, and how long that inventory has been stored by Amazon. According to Amazon, “storage fees are based on the daily average volume (measured in cubic feet) for the space your inventory occupies in fulfillment centers.” These fees charged by Amazon vary based on the product-size tier and month. Monthly fees are usually charged between the 7th and 15th of the month following the month the fee is applicable to. To clarify, if you are looking for your inventory storage fee for the month of March you would look at the April Payments report for transactions between April 7-15.
Amazon Storage Fees
Historically, Amazon sellers have also been responsible for semi-annual long term storage fees that are applied to products that have been stored in an Amazon fulfillment center for 6 months or longer. For products that have been in an Amazon fulfillment center for 6 to 12 months, sellers will be charged $11.25 per cubic foot. Products that have been in an Amazon fulfillment center for 12 months or longer, sellers will be charged $22.50 per cubic foot. These fees are in addition to the monthly inventory storage fee. Note: Fees are not charged if a removal order has been submitted prior to the fee being charged.
2018 Changes to Amazon Storage Fees
For 2018, Amazon announced changes to the US FBA Inventory Storage Fees and Policy. Amazon long term storage fees will be changed from a semi-annual basis to a monthly basis. This change will be implemented starting September 15, 2018. Amazon is also introducing a minimum charge of $0.50 per unit per month for items in fulfillment centers for 365 days or more. Whichever applicable fee is more between the total Amazon long term storage fees or the minimum long term storage fee will be charged to the seller.
Amazon FBA Inventory Storage Fees
Inventory Assessment Date Days Items Are in Fulfillment Centers Days Items Are in Fulfillment Centers 181-365 Days365 Days or more Prior to September 15, 2018Semi-Annual: February 15 & August 15$11.25 / cubic foot$22.50 / cubic foot September 15, 2018 and after Monthly: 15th of every month$3.45 / cubic foot$6.90 / cubic foot
For sellers on the Amazon Professional selling plan, as of July 1, 2018, Amazon may limit access to storage for sellers who Inventory Performance Planner Index scores below 350. You can read more about Inventory performance here. This score is updated on a weekly basis based on your ongoing inventory management. Amazon sellers who maintain an Inventory Performance Index score of 350 or greater will have access to unlimited storage for standard size and over items, but storage fees will still apply. For more information about FBA storage limit changes, click here.
Inventory Performance Index Score and Amazon Storage Limitations
Sellers with a Professional selling account who do not maintain an Inventory Performance Index score of 350 or more, storage limits will be evaluated every three months on a quarterly cycle. In the event your Inventory Performance Index is under 350 six weeks prior to the start of a quarter, Amazon will notify you that your storage may be limited. If the quarter ends and your Inventory Performance Index is below 350, those storage limits will be applied for the following quarter. According to the Amazon FBA Inventory storage limits policy, sellers will not be able to create a new shipment to Amazon until your inventory level falls below the storage limits you’ve been given. Should your existing inventory surpass your storage limits within a given month, you will also be charged an Inventory Storage Overage Fee for the portion of your inventory that exceeds your storage limitations. This is on top of your monthly inventory storage fees and any applicable long term storage fees. This overage fee is charged monthly at $10 per cubic foot, based on the daily average volume of inventory that surpassed your storage limitations within the month.
Amazon FBA Inventory Storage Fees
Monthly inventory storage fees were increased as of April 1, 2018 by $0.05 per cubic foot for standard-size and oversize products. Averaged out, the monthly fee increase comes out to a 4.7% increase. You can see the changes in fees in the table below:
Changes to Amazon FBA Inventory Storage Fees
Storage MonthStandard-sizeOversizePrior to April 1, 2018January – September$0.64 / cubic foot$0.43 / cubic footOctober – December$2.35 / cubic foot$1.15 / cubic footApril 1, 2018 and afterJanuary – September$0.69 / cubic foot$0.48 / cubic footOctober – December$2.40 / cubic foot$1.20 / cubic foot
So what can you do to minimize having to pay so many fees to Amazon for inventory storage?
Monitor the rate at which your inventory is turning over: If you aren’t already, begin tracking your weekly and monthly turn rates so you can adequately analyze whether or not your sourcing and pricing strategies are effective.
Lower prices/run promotions: If you are having problems quickly moving your products and want to minimize or avoid storage fees, you may consider lowering the prices of your products and/or run promotions, like “buy one, get one” or a set amount off the product price. You can set these promotions up through Seller Central under the Advertising tab, then select Promotions.
Run Amazon Sponsored Product ads: Create campaigns for products that you want to promote within search results on Amazon. These pay-per-click ads help get your product listings in front of more customers who are searching for products like yours. You can automate your Amazon ads with Sellozo (click here to try for free for the first 30 days) for a hands-off approach that lets Sellozo’s platform continually optimize your ad campaigns while you are able to focus on other aspects of your business.
Request removal from Amazon: In the event you don’t think you will be able to sell your inventory as quickly as you’d like, you can request a removal from Amazon. Basically, this is asking Amazon to return your items to you. You can then try to sell these products via other e-commerce channels like eBay or you may even be able to return them to the supplier. This will help eliminate Amazon long term storage fees for products that are not selling well on the Amazon platform.
For every seller using Amazon FBA, it’s in their best interest to stay on top of Amazon long term storage fees they are being charged. Take the time to strategize how you will track inventory and make decisions based on your business goals in order to minimize and avoid paying unnecessary Amazon long term storage fees.
If you need help figuring out your long term storage fees, or you want help avoiding them altogether, give Sellozo a try. You can start selling your products faster with automated Amazon Sponsored Product ads.
Sellozo offers a simple, powerful platform that makes it easy to manage and optimize your Amazon Sponsored Product Ads and – thanks to machine-learning – programmatically alters bids to help your ads beat out the competition.