There are many types of Amazon fees, some of which are hidden and invisible and are often ignored by sellers.
As a result, when financial accounting calculates costs and profits, the data differs from the actual situation, and even if it is clearly losing money, it is counted as making money, and the boss cannot understand the real input and output of the company's funds.
The over-age inventory surcharge is one of many hidden Amazon fees.
Do you know what the overage inventory surcharge is, its billing rules, how to calculate it, and how to avoid it?
What is the Amazon Overage Inventory Surcharge?
Amazon's over-age inventory surcharge, which is the long-term storage fee that everyone used to say.
On May 15, 2022, after Amazon officially updated the policy, the long-term storage fee will be charged for products that have been stored for more than 365 days in the past, and it will be changed to a step-by-step charging model.
Q: How do I know that the product is subject to the Amazon over-age inventory surcharge?
1. Amazon Inventory:
Go to Amazon Seller Central→Inventory→Manage Inventory→Inventory Dashboard→FBA Inventory Age→View Details.
Here you can view the products subject to the over-age inventory surcharge, the storage time in the FBA warehouse, and the estimated cost of the platform.
2. Amazon Inventory Health:
Go to Amazon Seller Central→Reports→Fulfillment→Inventory→Show More→Inventory Health.
In this report, items and fees subject to the out-of-age inventory surcharge are estimated.
How is the Amazon overage inventory surcharge calculated?
After confirming that the product is subject to the Amazon over-age inventory surcharge, we will try to calculate the fee based on its charging rules.
Q: Amazon's over-age inventory surcharge rules?
1. Products with a storage time of 271 to 365 days:
In addition to the monthly storage fee, an additional over-age inventory surcharge will be charged. The price is calculated by volume and is $1.50 per cubic foot.
2. Products with storage duration greater than or equal to 365 days:
In addition to the reading storage fee, an additional over-age inventory surcharge will be charged. The price is based on volume, which is $6.90 per cubic foot, or $0.15 per item, whichever is greater.
Q: How to calculate the Amazon over-age inventory surcharge?
1. 271 ≤ product storage time ≤ 365 days:
Overage inventory surcharge = length x width x height x 1.5 (USD)
2. Product storage time ≥ 365 days:
Over-age inventory surcharge = length X width X height X 6.9 (USD), if the over-age inventory surcharge for a single product calculated according to the previous formula is less than 0.15, it will be calculated as 0.15.
3. Lingxing ERP automatically calculates:
Leading Star ERP has opened up the interface with Amazon FBA.
Automatically count the number of over-age inventory surcharges, ASIN, MSKU, and single-piece volume for FBA products. And automatically calculate storage costs, including Amazon's over-age inventory surcharge.
How to Avoid Amazon Overage Inventory Surcharge?
If the goods are backlogged in Amazon's warehouse for a long time, the over-age inventory surcharge will be a large amount, and the financial loss to the enterprise will be staggering.
In the above situation, companies can only choose to destroy the goods, sell them at a low price, or transfer the goods to overseas warehouses, etc., to dispose of the goods to stop losses.
Therefore, companies should try to avoid Amazon over-age inventory surcharges.
Q: How can I avoid the Amazon over-age inventory surcharge?
A: Scientific and accurate replenishment to avoid inventory backlog
Unexpected Amazon overage inventory surcharges will occur, most likely due to incorrect sales estimates and excessive replenishment.
Leading Star ERP has opened up the whole process of the supply chain, combined with the product/30-day sales volume, scientifically predicts the future sales volume, and provides intelligent replenishment suggestions.
When Amazon sellers calculate the number of replenishment in the FBA warehouse, they can combine the data analysis provided by Linkstar ERP, so that the number of replenishment obtained is more in line with the sales demand, and can cleverly avoid inventory backlog.
Check inventory regularly to maintain inventory health
Many Amazon sellers regularly check orders, sales, and advertising data, but rarely check inventory.
As an Amazon seller, we need to regularly check FBA inventory, and if there is an imminent Amazon overage inventory surcharge, we will deal with it in time.
Leadstar ERP automatically pulls the store's commodity storage status in each Amazon warehouse, including inventory, inventory age and other data, so that sellers can discover the risk of inventory backlog as soon as possible.
Increase sales intensity and quickly consume inventory
Sometimes, due to special reasons, the sales of products are not ideal. For example, it is difficult to sell down jackets in the coming summer. Amazon sellers face the risk of inventory backlog and over-age inventory surcharges.
At this time, Amazon sellers can increase the sales intensity, such as setting product discounts, increasing advertising efforts, and bundling seasonal sales to quickly consume warehouse inventory.
Of course, the cost of consumption should be kept within the planned cost range as much as possible.
Amazon's overage inventory surcharge, often overlooked by sellers, is a hidden Amazon fee. After reading this article, I believe you have a deep understanding of it.
In the next issue, the editor of Lingxing ERP will analyze another hidden cost of Amazon: FBA warehouse consolidation fee and warehouse splitting fee, so stay tuned~