When you are a seller using Fulfillment by Amazon you get the benefit such as eligibility for Amazon Prime, not forgetting you don’t have to worry about storing merchandise, handling picking, packing, and shipping, or even dealing with client returns. Now let’s talk about storage fees.
Amazon stores its merchandise in its fulfillment centers and deals with all the shipping and returns on the behalf of sellers.
One of the largest fees Amazon FBA sellers have to account for is warehouse fees. Here’s what you need to know about Amazon storage fees and how they’re calculated.
Calculating inventory volume
Amazon warehouse storage fees are charged by the cubic foot, established on the day-to-day average volume a seller’s inventory occupies in Amazon’s fulfillment centers. The measurement is established on unit size when products are packaged in line with Amazon FBA requirements and prepared to ship.
If you know your packaged units’ dimensions in inches, it’s easy to convert to cubic feet to calculate your fees:
- Multiply the product’s length x width x height
- Divide the total volume by 12 to convert to cubic feet
Using an Amazon FBA calculator can assist you to calculate your total Amazon FBA fees, including storage fees.
Monthly inventory storage fees
Monthly inventory storage fees are commonly charged between the 7th and 15th day of the month. For example, to see your inventory storage fee for February, refer to the March Payments report for agreements from March 7-15.
Fees differ by the size of the product level and the period of the year. Although standard-size goods are tinier than large products, they expect more complex and costly shelving, drawers, and containers for storage. Fees are charged by the cubic foot, so across-the-board fees for standard-size products may be less than those for oversize goods, based on volume.
For standard-size products, monthly storage fees are:
- $0.79 per cubic foot between February and October
- $2.60 per cubic foot between November and January
For oversize products, monthly fees are:
- $0.68 per cubic foot between February and October
- $1.40 per cubic foot between November and January
Monthly inventory storage fees for dangerous products
You pay a bit more in the monthly fees if you are using FBA for inventory Amazon deems dangerous products. Virtually, dangerous products are items that require particular handling and hazmat (hazardous materials) warehouses. To sell such products, sellers need to be in the FBA Dangerous Products program.
Monthly fees for standard-size dangerous goods are:
- $1.15 per cubic foot between February and October
- $3.83 per cubic foot between November and January
For oversize dangerous goods, monthly fees are:
- $0.88 per cubic foot between February and October
- $2.63 per cubic foot between November and January
Long term inventory storage fees
A long-term fee relates to units that have been kept in an Amazon fulfillment center for more than 365 days.
The long-term storage fee is in addition to the monthly inventory warehouse fee. If you submit a removal order for products before the next inventory cleanup date, those products won’t be charged for long-term storage fees.
Avoiding Long-Term Inventory Storage Fees
Keeping tabs on the length of time that your inventory has been kept in fulfillment centers can help sellers to avoid long-term inventory storage fees. Inventory Age and Inventory Health reports give insights on the ASINs that have been in storage for:
- 0 to 90 days
- 91 to 180 days
- 181 to 270 days
- 271 to 365 days
- 365+ days
Using this information, it’s easy to figure which ASINs will be subject to long-term storage fees by the 15th of the next month when Amazon performs its inventory cleanups. The Recommended Removals report estimates the number of products you’d need to remove, by ASIN, to avoid long-term storage fees if no extra products are sold.
Conclusion
These are the fees you need to pay on Amazon if you are an Amazon FBA seller.
This is the beauty of Amazon FBA, while it does cost to use the service it is efficient and takes a lot of work from the seller.