Amazon Storage Fees 2023: Types, Costs, and Tips for Sellers

Like the title suggests, this article concerns Amazon storage charges. It is important to note that this isn’t the only fee Amazon charges. It is, however, one of the largest costs that sellers must pay.

So let’s look at the what Amazon storage costs are, and how to determine Amazon FBA storage fees, and whether it’s possible to stay clear of them.

How to Calculate Amazon Storage Costs ?

The basis of Amazon seller storage charges can be described as FIFO accounting. Are you aware of what it means?

First In First Out (FIFO) is an exclusion of an FBA inventory of the items that have been that are sold or removed from the Amazon store over a prolonged duration. It applies to all products with no any exception.

Amazon storage costs for inventory are based on the cubic feet that the product is occupying within the warehouses of the platform. It is important to remember that the measure of the area that is occupied is determined by the size of the unit that is packed in accordance with the guidelines of Amazon and ready for shipping.

Do sellers have the ability to calculate it for by themselves? Yes! Have you got the size of your products in inches? You can calculate the Amazon storage cost now. Here’s what you should accomplish:

• Divide the total length by its width and height.
• Divide the total by 12 to calculate the volume in cubic feet.

What Are Amazon Monthly Storage Fees?

Amazon FBA monthly storage fees are specific fees that retailers pay to Amazon FBA to store their products in warehouses. The amount of payment varies depending on the sizes tiers, specifically, the standard size and the oversize.

Sellers on the marketplace are required to pay an annual commission that runs from the 7th to 15th. For instance that in September, in the preceding period the commission is due for the month of August.

As mentioned earlier the monthly commission is based in the amount of space as well as the space it covers. But, the time of year also influences commissions. For instance the cost of services will be higher in the months prior to that New Year holidays. You might have suspected that this result is because of the heavy volume of fulfillment center work due to numerous orders.

For goods of standard size Monthly storage commissions for storage are:

• from January to September $0.75;
• the time from October until December $2.40.

For items that are oversize the monthly storage fees are:

• the time period between January and September $0.48;
• the time from October until the end of December — $1.20.

Watch the below video to know about New Amazon FBA Fees Explained: How Much Does Amazon FBA Cost? — Pricing Breakdown

What Are Amazon Monthly Storage Fees for Dangerous Goods?

If your product falls under the class of hazardous items and the price is higher per item. The term “hazardous” refers to materials stored in a way which can only be preserved by the special treatment. Amazon seller must belong to FBA Dangerous Goods authorized to sell such items.

Let’s look at Amazon warehouse charges per cubic foot in this particular case:

• the time period between January and September $0.99;
• the time from October until the month of December, $3.63.

If your unit appears to be large and is not able to be used, the following steps should be taken:

• the period from January until September $0.78;
• the time from October until the end of December — $2.43.

What Are Amazon Long-Term Storage Fees?

We’ve sorted out Amazon storage charges for fulfillment within one month, but we’ll get to the Amazon longer-term costs. The type of commission a seller receives for storing their goods on pallets that last more than an entire period of a year (365 days).

Thus, the market is cleaning out the warehouse each monthly on 15th. The owner of an inventory item that has been in the center of fulfillment for longer than one year is charged $6.90 for each cubic foot. Based on the metric that is the most expensive, the vendor might also pay $0.15 for each unit.

Be aware Please note FBA programs such as Small and Light products incur various fees, such as the cost of long-term storage on Amazon. In this case, the cost will be $0.25 each unit, for a period of inventory that is long-term from 181 to the end of 365 days. If the item is at our fulfillment centers for longer than 365 days, the amount is $0.50 (per unit).

How to Avoid Being Charged Long-Term Fees?

What is the reason why the platform does this? It’s because it doesn’t want to become an unorganized warehouse. This isn’t the place where AMZ makes the bulk of its profits. Therefore, if you’re in no way selling your inventory AMZ is going to fine you for not placing your products in its fulfillment centers.

If you’re at risk of being billed long-term storage charges You have a couple of choices:

• Send your request for removal before 11:00 p.m. (PT) at 14th of each month. It can help avoid the possibility of having these items charged fees even if the following inventory clean-up does not actually eliminate them. Costs for removal orders are due only when the inventory is removed or returned to the vendor.
• Include automatic removals to help select items for disposal according to your automatic long-term storage commission setting. You may choose to remove all items that are likely to incur long-term storage costs or only products within a specific price range. You may choose to eliminate products that cost less than a specified amount and keep higher-priced inventory also, which means you will only pay commissions on the items you’re not taking. The items that are removed will get returned or taken care of.
• Remove the items that are at risk of incurring charges in a specific campaign to ensure liquidation. Engage in a vigorous campaign to get the objects purchased out of storage as quickly as possible. The goal of this promotion is not to increase the effectiveness of your advertising, which will boost your profits. Instead, it helps you sell through stock quickly at a cost that is lower than long-term storage expenses. Reviews for your product is essential since customers decide to purchase from your reviews.
• Sold the goods in a liquid manner by ensuring they are priced by at least 20% before then moving them through Amazon Outlet.

The removal of goods may affect the amount of inventory you can ship to AMZ through FBA. FBA solution. The quantity of new products you are able to ship is determined by sales from the previous 90 days, the estimated sales for the coming eight weeks, inventory items in inventory, utilization of inventory, and many other factors.

Storage costs for long-term storage will impact the Inventory Performance Index (IPI) which will affect your ability to fully make use of FBA to fulfill orders and store items.

As with all fulfillment platforms, AMZ incurs overhead expenses for the storage of inventory within its centers. In turn, sellers are charged commissions on the amount of inventory they keep at their fulfillment facilities as well as additional costs for items that are kept for longer than a year. But for many FBA merchants they find these commissions to be beneficial in comparison to the costs (and inconvenience) that come with keeping their warehouses and fulfillment centers.

Tips for Sellers to Avoid Amazon Storage Fees

Because many items remain in the store for quite a while The following tips is likely to be useful. After studying the tips to work out Amazon storage fees for inventory or elimination.

Manage inventory using returning

This approach will certainly eliminate the incessant commissions. The choice is easy. Consider the possible sales figures for a particular time. If you’re unsure of the need for a particular product, it’s best to avoid paying excessive costs and return the product.

Additionally, retailers can request to take inventory off before getting rid of their warehouse. It is possible to do this on the 14th day of any month, up until 11:59 AM. It is Pacific time.

If you make an request for removal and you do not pay to store the items. When the platform is able to deliver the items to you, the deletion order is not yours to pay for the deletion request.

Apply Discount pricing

Certain seasoned sellers say that selling discounted items is among the best methods to cut commissions. They believe it’s more beneficial to make a smaller profits from sales rather than paying large commissions on inventory.

In the end, a drop in turnover of trade is accompanied with massive losses in profits. It would be better to at least return some amount of money and invest it into something else that is in high demand?

Profit in AMZ promotions

The essence of these deals is that Amazon allows merchants to get rid of items. Additionally, during this period the seller doesn’t charge for the item. So, by monitoring promotions, you have a the chance to reduce the cost of your products.

Additionally, why not include an incentive on your merchandise? Absolutely, you must consider the cost in this. If you pay less to promote than your warehouse space, then you can sell your items and benefit from the discount.

Keep an eye on the time

Are you among those who purchase a large amount of products? Do you think you can not ship the entire inventory to AMZ? Instead, begin with a portions of your inventory. If you’re sure buyers would like it you can come up with an plan of action.

A rough estimate of the sales you have made can reduce your expenses by knowing the amount you need to send. The ideal warehouse for sufficient inventory is around 40 to 45 days.

The more you are aware of buying and selling the better you are at knowing your field. This means that you have to be the one to manage your product that you provide to customers.

As you may have guessed that ignorance of the fundamentals of inventory management is usually the reason for commissions that are excessive.

Are You Able to Identify units that are in Amazon Long-Term Storage Costs and Risks?

Yes, you can do it. The two types of reports sellers make use of — inventory status and age. They also know the shelf time that the merchandise has.

Here are four steps to locate your way to Inventory age section.

• Within the account you can find”Inventory” in the account “Inventory” tab
• Select Inventory Planning
• Go to “Reports” and then “Fulfillment.”
• You are now able to make use of stock status and suggested disposal reports.

What’s next? After you have optimized your Amazon estimated annual storage charges It’s time to look at other crucial aspects of running a business, like feedback from customers.