Amazon FBA is the first stop for most sellers to enter the Amazon platform. Many conveniences allow sellers to choose this mode first, but the disadvantages of FBA are also obvious. The high storage cost and inflexible price make the seller feel headache.

Reducing Amazon’s FBA fees is not a dream. Although Amazon will not give discounts, sellers can change the way they use the service to avoid unnecessary fees. At the same time, make sure all the data is correct and ask for a refund for Amazon’s wrong charges.

Here are 5 key techniques for reducing FBA costs:

1.Optimize the products at the boundary of size and weight

FBA logistics fees are charged according to Amazon’s commodity size.

Charging by size and weight means that if the goods are slightly larger or heavier than a certain segment value, they will be charged a higher fee.

For example, the logistics cost of a large standard size commodity weighing 16 ounces is $3.48, while the logistics cost of a same size commodity weighing 17 ounces is $4.90. The additional cost of $1.42 is 41% higher than the cost of low-end goods. If you can sell 10000 items a year, you have to pay an extra $14200.

Therefore, the first step to reduce the cost is to check which size and weight segment the goods belong to. Amazon’s current product size segmentation and FBA distribution fee are shown in the following figure:

Find in the size or weight section of the lower end of the goods, it is best to choose simple packaging, try to do light and small.

2.Make necessary preparations in advance

There are many requirements for FBA’s distribution services, including warehousing and transportation, commodity packaging, bar code labels, etc. On seller central, there are 15 pages of product packaging, covering the general requirements of all products, as well as the specific requirements of liquid, powder, glass, battery, plush toys, sharps, clothing, jewelry, baby products, etc.

Many sellers are greedy for convenience and deliver to Amazon for all packaging and preparation. This method has its disadvantages

Amazon will charge for each unit of product.

It takes longer for inventory to become a purchasable commodity.

If the seller uses the manufacturer’s barcode instead of Amazon fnsku barcode, the inventory may be “mixed” with the inventory of other sellers.

These costs can be reduced or avoided. Brand and private brand sellers can ask manufacturers to print Amazon’s barcode directly on the product packaging, and add plastic bags or other packaging in the factory to meet FBA requirements.

If the volume of goods is large, the seller can carry out the preparatory work or hire a professional FBA preparation company. Although there is a certain cost, it is far lower than Amazon’s charge.

As for the content information of the packing box, the seller can fill in the information online or upload the file, or create a reusable template. You can also use the inventory management system that handles FBA’s warehousing and transportation. It should provide Amazon with the information about the contents of the packing boxes through the API.

If none of these options work, you can also use specialized tools to generate all the information you need.

3.Clear unfulfilled inventory

If a customer returns a product, Amazon checks the product to see if it can be sold again. Goods that cannot be sold again are called “unfulfillable.”. If not removed, they will remain in the logistics center and continue to incur storage costs.

To find out if there is unfulfilled inventory, run the inventory health report in seller central and check the column “total unsellable quantity”. For unfulfilled inventory, choose to destroy or return to the seller.

Or, if you choose to use the new “FBA grade and resell as used” or “FBA liquidation” program, the related costs will certainly be cheaper than the endless accumulation of FBA storage costs.

4.Review FBA invoices

Amazon may charge different fees, and sellers can apply for compensation according to the FBA inventory compensation policy.

Amazon’s FBA compensation pays for the retail value of the affected inventory, not just the cost of the inventory.

But the seller needs to apply for a claim within a limited time. For Amazon FBA U.S. Inbound Goods, the seller has nine months to reconcile, while the EU has six months. The seller can claim for lost, damaged, disposed or deleted unit goods and wrong customer refund within 18 months.

For overcharged delivery costs, the seller has only 90 days to file a claim.

The Seller shall review the inventory, transaction and expense data to find out the difference, make a claim to seller support within the specified time limit, and upload the required information, such as Bill of lading, delivery certificate, invoice, packing list, etc.

Although applying for a claim is a complex and time-consuming process, it is worth the money. The seller can also employ other companies to carry out the FBA expense claim process.

5.Manage inventory

Amazon sets storage fees, storage limits and inventory performance index (IPI) to keep sellers’ inventory at a low level and make full use of its warehouse capacity.

The above are some small suggestions, the seller can be used as a reference to do careful and creative inventory management.