Headlines have been flooded with Amazon’s warehouses that are overflowing with stock which is why they are hiking FBA fees in order to get sellers to better manage their inventory.
Amazon started conducted monthly inventory clean-ups on the 15th of every month, looking for items that have been there longer than 365 days. For those products, their sellers would be charged $6.90 per cubic foot or a long-term storage fee, whichever was greater.
How to reduce FBA costs
- Send Only Particular Items to an Amazon Fulfilment Centre
For starters, avoid storing items that cost less than $15. Storage fees are based on weight and size and not price.
- Try and limit the number of heavy items you store.
You’ll have to pay extra for their added weight, which again can cut into your profit margin. Unless you’re making excellent revenue on those items, it might be an idea to reconsider if it’s worth it to sell them.
- Boost your IPI (Inventory Performance Index) score
Reduce Stranded Inventory Issues: This is a sort of umbrella term for a number of problems with your listing and comes with different ways you can fix things so your products are buyable.
- Restock Recommendations
This piece of advice helps you figure out when it’s time to restock so you can keep a good amount of inventory going and not risk running out. But Inventory management is key to making sure your top-selling products do not run out of stock but also, not overstocking which will result in higher fees.
- Excess Inventory Suggestions
At the other end of the spectrum is when you start to get too much inventory and risk getting long-term storage fees.
How to identify inventory subject to long term storage fees
You can use the Inventory Age and Inventory Health reports to identify which ASINs in your inventory are subject to long-term storage fees. For each ASIN, you can see your inventory by the amount of time it has been in a fulfilment centre:
- 0 to 90 days
- 91 to 180 days
- 181 to 270 days
- 271 to 365 days
- 365+ days
If you have a warehouse of your own and a flawless delivery network, it would be best to stock and fulfil orders. Saving between £0.01 – £0.05 per product in storage fees and/or FBA fees might not seem like much but when taking the number of products Amazon stocks and fulfils for you, that number could result in high fees.
- Stock up on fast-moving products as they will not sit in storage for long
- Send in the minimum stock for products that are not moving as fast
- Monitor and manage your inventory health and age to improve IPI score
Managing your inventory, stock control and replenishing stock can be a daunting task. But, we are here to help better manage your success on Amazon. To find out more about what we can do for you, contact us on firstname.lastname@example.org or call us on +44 020 8080 0505