Are you finding it difficult to avoid FBA storage fees? We know that the worst kind occurs when items result from prolonged storage. If you want to stop having your profits hit unnecessarily and prevent paying Amazon long-term storage fees, you are in the right place to find out how. 

The FBA long-term storage costs assessed to Fulfillment by Amazon (FBA) sellers for goods that remain on Amazon’s shelves for more than six months may go unnoticed by them. According to Amazon, its ability to provide space for profitable, quick-selling items is limited to by-products that are overstocked or kept in its warehouses for an excessive amount of time. As a result, every year, on February 15 and August 15, Amazon conducts an inventory clean-up and charges its FBA customers who have a product that has been kept in their fulfillment centers for an excessive amount of time with what is known as a “long-term storage tax.”

 

What Time Do Amazon’s Long-Term Storage Fees Start to Apply?

We mentioned the six-month point, but that’s only when Amazon politeness emails you to remind you that the deadline is approaching. It won’t be until you’ve stayed longer than 365 days that you’ll be subject to any extremely high long-term storage fees. You will be charged for each item, but there is a small bonus system in place:

  • One unit from each MSKU (Merchant Stock Keeping Unit) that has been present for a year or more will get a pass, saving you the cost of fees for that product.

The bad news is that depending on how long the item has been in storage; Amazon sends out emails twice a year on February 15 and August 15. Amazon charges differently for rentals longer than six months and for periods more significant than a year. The cost may change overtime so do visit Fulfillment by Amazon Fee Changes for a complete list of the modifications.

 

Expert Advice on How to Avoid Paying Long-Term Storage Fees

FBA seller, Stephen Smotherman advises, “it’s a good idea to maybe wait until after long-term storage fees are computed on February 15 to send in things you think might take longer than six months to sell” because Amazon charges twice a year.

When Amazon calculates long-term storage costs on August 15, if you send in your Inventory after February 15, they will only assess the fee for things that have been in storage before February 15.

 

How to Identify Which Items Will Be Subject to LTSF Charges?

  • Register with Seller Central.
  • Select Manage Inventory by clicking on Inventory.
  • Click on the Inventory Dashboard tab.  
  • Scroll down until you reach the FBA Inventory Age box.

 

Identifying Unsold Items

The next concern is spotting those products so you can be proactive about avoiding long-term storage fees now that you know what Amazon can charge if you don’t get those items sold.

Logging into your Seller Central account, choosing “Fulfillment” from the “Reports” panel, and then generating a report from the “Show More” / “Inventory Health” option under the “Inventory” tab on the left side of your screen is all you need to do to complete this step. To read the report fast, copying and pasting it into Excel is easiest. Then, highlight the following details:

  • SKU
  • Product Name
  • ASIN
  • Quantity to be charged long-term storage fees at 6/12 months
  • Projected long-term storage fees at 6/12 months

You may view every item charged at the deadline—six or twelve months—along with its associated cost.

 

Making the Most of the Situation

Naturally, selling everything is your most excellent option. The next step is to determine the win-loss balance between how much you must lower the item’s price to get it sold against how much you’ll pay if you leave it in storage and wager on selling it for a better price.

In our opinion, competitive pricing is always a good idea, not just because it frees up space in the warehouse for new inventory. Additionally, it draws more customers to your website, where they are far more likely to browse through your other products, allowing you to gain lifelong clients.

We must emphasize once more on how crucial it is that you carefully review every category and item in your inventory to make the best decisions. Making wise choices is one of your responsibilities as an online seller running your own business. 

 

Conclusion

Several options are available to avoid long-term storage fees. Keep in mind, before the deadline is near, you might try to sell some of your inventory before deciding what to do with the rest. Finding out exactly which choice will have the lowest impact on your profit margin is a brilliant idea, and then moving forward from there.

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