February 15th is right around the corner and Amazon’s way of saying Happy Valentines Day to sellers is to charge them some pretty hefty long-term storage fees. Amazon just recently sent out an e-mail reminder to FBA sellers with a few details about long term storage fees so lets do a quick recap and talk about what you should be doing to avoid these fees.
The amount you pay in long term storage fees depends on how much physical space your stuff is taking up in the Amazon warehouses. If your item has been in the warehouses for over 6 months but under 12 months you are charged $11.25 per cubic foot. If your items have been in the warehouses for over 12 months you are charged $22.50 per cubic foot. To get a better idea of how much this could cost you here are the actual numbers on my FBA inventory:
So if the fees were to be applied today I would incur a fee of over $750. This is on top of the monthly storage fee all FBA sellers are already paying Amazon. Depending on the size of your inventory and your experience with FBA that number may seem small or may seem large to you.
To see which products of yours are set to incur long term storage fees you will need to go to your FBA Inventory Age Page in SellerCentral, or just CLICK HERE.
A few additional things to note, in the past Amazon would allow you to have a single unit of each ASIN be exempt from being charged long term storage fees… that exemption is gone. (Are you a book seller? OUCH! Thats going to hurt!) Also, if you have any items returned to you before February 15th you will not be able to send in more of those until July 1st.
Now is the time to really figure out what you want to do with any items that will incur these fees. Personally, a majority of my potential long term storage fees are because of books that have not sold. Most of my books come from sales that are fill-a-bag or fill-a-box so my monetary investment is practically 0. Take that into account along with the fact that they have been sitting in an FBA warehouse for at least 6 months. These are slow moving and I am better of dumping them then either paying the Long Term Storage Fees or paying the 50 cents per unit to have them sent back. Unfortunately this means dropping the price on hundreds of books to do my best to get what I can out of them and get them gone.
But what about items that you have more of a capital investment in? These items you don’t want to be so quick to price drop and get rid of at all costs. You are in the business of making money not losing money, right? The great thing about the FBA Inventory Age Page is that you can see how much you are being charged for each individual ASIN. By default the most expensive items will be at the top of the list. I would recommend you set aside some time to go through each item on this list and decide what is the best route to take? If the item seems to sell reasonably well and lowering the item just a dollar or 2 likely gets you into the buy box then thats something you probably want to do. If Amazon themselves is also selling the same item and are at a price that would make you lose money you might want the item sent back or if its small enough maybe you just go ahead and eat that fee. If you are going to be repricing items to try and get them to sell then NOW is the time to do it. You don’t want to waste time repricing a week before you incur these fees, you need to give the items time to sell at the new price point.