Many seller friends complained in the background, saying that there are too many categories of costs incurred by Amazon logistics. In fact, this is a link that Amazon sellers must go through in the process of growing up. Knowing more rules can avoid stepping on thunder in the future operation process! For this reason, after talking about the monthly inventory storage fee and long-term storage fee, Meixinjun also talked about the Amazon inventory storage excess fee that is often overlooked.

1. What is the inventory storage overage fee?

In fact, since July 1, 2018, in order to optimize inventory management and enable sellers to deliver their products to buyers faster, Fulfillment by Amazon (FBA) has adjusted the FBA storage limit policy:

If the seller's existing inventory exceeds the storage limit, in addition to the monthly inventory storage fee and long-term storage fee (if applicable), an [inventory storage overage fee] will also be paid. The amount of the overage fee charged depends on the amount exceeding the storage limit. days.

2. How to charge?

The inventory storage overage fee will be charged monthly at a rate of $10 per cubic foot and is based on the average daily volume (in cubic feet) of all space occupied by the seller's inventory in the fulfillment center in excess of the storage limit . (Amazon will send an email reminder on the 5th of each month to sellers who have incurred storage overage fees on the 4th of the month. If a storage overage fee is incurred in a certain month, Amazon will charge the fee after the end of the month. .)

Amazon uses the following formula to calculate the monthly inventory storage overage fee estimate:

✦ Estimated monthly overage fee = (current overage value x daily overage rate x remaining billing days in a month) + monthly overage fee generated so far ✦Current overage value = current usage – current limit ✦ each Daily Overage Rate = $10/Days in the current month✦Remaining billing days in the month = Days in the current month – Days of the current day value + 1
Note: FBA inventory storage limits are as follows:

>> Personal Account

With a fixed storage limit of 10 cubic feet, this value does not change. Storage limits for individual selling accounts will not be increased.

>> Pro account

✦ Amazon will count the inventory performance indicator scores twice. For sellers whose scores remain at or above the required threshold at any one time, there will be no storage capacity restrictions for standard-sized products, oversized products, and clothing and footwear products. .
✦ New sellers who have been on sale for less than 26 weeks, or sellers who have not had enough sales data to generate an Inventory Performance Indicator score in both score check weeks, will have no storage restrictions, and from January 1, 2022, inventory with storage restrictions The performance indicator threshold is 400. ✦Pro accounts with storage restrictions will still have at least 25 cubic feet of storage space for standard-size, oversized, apparel, or footwear.

Example:

3. How to check the inventory storage overage fee?

Method 1: You can see the corresponding prompt in "Seller Central > Inventory > Inventory Planning > Performance > Storage Amount".

Method 2: In "Data Report > Inventory and Sales Report > Payment > Inventory Storage Excess Fee", download the "Inventory Storage Excess Fee Report" to view the details.

4. How to reduce the cost of excess inventory storage?

01Timely clearance to reduce charges

Regardless of whether Amazon has charged or is about to charge overage fees, it is best for sellers to clear their inventory in time and avoid or reduce fees through off-site discounts. However, it is worth noting that if the goods are received and are not on the shelves, they cannot be removed during this period, and Amazon will still charge them.

02 Improve inventory performance score

The best way to improve your IPI score and minimize your FBA storage fees is to reduce redundant or slow-moving inventory. Sellers must find ways to increase product traffic, sales, and FBA inventory in-stock rates, and avoid running out of best-selling products.

03 Adopt "FBA Bulk Clearance Program"

It can not only help sellers digest redundant inventory and returned goods from buyers, avoid storage fees, prevent inventory from being abandoned, but also recover part of the cost of goods. According to the official display, sellers can recover about 5% to 10% of the cost of their average selling price, and correspondingly, Amazon will also collect part of the fee as a commission.

04 Transfer to a third-party overseas warehouse

If your current IPI score is less than 400, Amazon will charge an overage fee, and the seller can transfer the slow-moving inventory to a third-party overseas warehouse, which can not only avoid overstocking and storage fees, but also compared to Amazon's storage fees, overseas warehouse fees. would be more reasonable.

At present, the calculation of overseas warehouse fees is mainly the first journey fee + processing fee + storage fee + last journey freight

Headway fee

The seller ships the items to the destination country of the overseas warehouse, which is divided into air, sea bulk, sea FCL, and local trailers.

warehouse handling fee

Inbound fees, outbound fees, order processing fees, etc.

Storage fee

The cost of storing the goods in a third-party overseas warehouse is charged according to the storage cycle of the goods, and is usually calculated according to the volume and weight of the goods.

Final freight

Third-party truck teams or third-party international logistics service providers such as Fedex and UPS

While calculating various costs, sellers should also firmly control the cost of each link. Meixin Logistics' overseas warehouses have been striving for the most favorable discounts. At the same time, we will also give suggestions on warehouse allocation and continuous optimization in practice according to the actual situation of customers, help sellers save costs, and provide professional warehousing and logistics support!