If you’ve been selling for at least 6 months then you might have long-term storage fees for inventory sitting in the Amazon warehouse.
Yep…Amazon will charge you for having inventory sitting in their warehouse that’s not selling.
On February 15 and August 15 of every year, FBA conducts an inventory cleanup.
Why do they charge you for long-term storage?
Amazon says that slow moving inventory limits their ability to provide space for fast moving products customers want.
Which of my products will be charged the long-term storage fee, and how much will I be charged?
Products will incur a long-term storage fee of $11.25 per cubic foot of shelf space occupied if they have been in an FBA warehouse between six and 12 months. That number doubles to $22.50 if the product has been in storage longer than 12-months.
The fee is based on the date an item is received in the fulfillment center.
How to Find Out Which Items Are Going to be Charged LTSFs
- Log in to Seller Central.
- Hover over Inventory and click on Manage Inventory.
- Click on Inventory Dashboard.
- Scroll down until you see the FBA Inventory Age box. Then, click View Details.
1. Pricing Strategies
About a month before an Amazon long term storage fee date, aggressively price your inventory so you get items sold so you don’t have to pay an extra fee
2. Use Amazon Promotions & Sponsored Product Ads
Run promotions and ads or offering a discount to get them sold.
3. Take Advantage of Free Removals
Checkout the Amazon liquidation program and you might recover some money. But you may have restrictions selling that product for several months. Note there is a deadline that needs to expire before you can send the item back to FBA warehouses. Typically this is 3 to 6 months in the future.
4. Manage In Stock Levels from the start
One of the best ways to avoid long term storage fees is to manage the amount of inventory that you send in to FBA warehouses in the first place. If you only send in quantities that are likely to sell in 6 months or less then you should have minimal long term storage fees to worry about.
5. Time When You Send in Inventory
One other thing that can be done is timing when you send in your inventory to FBA warehouses. For example, on August 15th you will be charged a long term storage fee for items that have been in stock for exactly 6 months. However, you will not be charged for items that have been in stock for 5 months and 29 days. So if you have items hit the warehouse on say August 20th, you have nearly a full year before you will be charged LTS fees. This is as opposed to having an item hit the warehouse on August 14th, then you will only have 6 months and a day before a LTS fee will be charged.
The referenced article is here
Other resource: Seller Forums: Tips to avoid FBA long storage fees thread