For any Amazon seller looking to stay ahead of the curve, it is important to monitor and adapt to the ever-changing marketplace. Amazon implements new rules every quarter, which impact each Amazon seller to varying degrees. In 2018, Amazon will begin adjusting their warehouse storage fee policies, affecting all FBA sellers. These changes seek to emphasize that their fulfillment centers are just that – fulfillment centers and not warehouses. Consequently, there are several changes to keep in mind as you expand your Amazon presence:
- Beginning April 1, 2018, monthly inventory storage fees at Amazon fulfillment centers will increase by $0.05 per cubic foot for standard- size and oversized items.
- Beginning July 1, 2018, Amazon has begun to rate sellers on a scale of 0 to 1000 based on turns and overall inventory performance. Sellers who maintain a score greater than 350 will have unlimited storage capacity within Amazon warehouses for standard and oversize items. Sellers that score below 350 will have their inventory space restricted and may not be able to send in additional products for fulfillment by Amazon, ultimately limiting their ability to capture sales. While it would seem logical to aim for the highest score possible, a score of 800+ likely means products are consistently out of stock and the brand is not maximizing their sales potential. According to Amazon, sellers should aim for a score of 400-800.
- Starting August 15, 2018, Amazon will charge $0.50 per unit per month for items in fulfillment centers longer than 365 days. The greater of the applicable total long-term storage fee or a minimum long-term storage fee will be charged.
- Starting September 15, 2018, long-term storage fees will be lowered from $11.25 per cubic foot to $3.45 per cubic foot, while the assessment dates will be changed from semi-annually to monthly. While this change will penalize FBA sellers that do not appropriately manage their inventory, it will not result in increased fees.
Those brands and Amazon partners selling via FBA who are unable to manage their inventory efficiently will be penalized both financially and with limitations to their storage capacity. If you are looking to grow your business on Amazon, it is crucial that you actively manage storage fee changes. If you need help managing these fees, or general help with your Amazon strategy, please reach out below.