Amazon have just give notice that new Long Term Storage fees are going to be levied on stock you hold in their EU Fulfilment centres. Fees will kick in as early as the 15th of February 2017.
Amazon say that their fulfilment centres contain millions of units that have remained in storage for an extended time without selling. Frankly we know that Amazon have run out of space in their fulfilment centres, that’s why they are forever building new warehouse and are exploring options such as Seller Fulfilled Prime which saves space in their own fulfilment centres. Amazon simply can’t afford to be a free long term storage option and if you leave unsold inventory there too long then they’re going to ding you in the wallet.
The following fee changes will take effect for inventory stored in European fulfilment centres:
Long-Term Storage Fees
Long-Term Storage Fees will be charged on 6-month-old inventory. Beginning with the semi-annual Inventory Clean-up on 15 August 2017, Amazon will charge a semi-annual Long-Term Storage Fee of £441.25 (€500) per cubic metre for items that have been in Amazon fulfilment centres between 6 and 12 months.
Units that have been in fulfilment centres for 12 months or more will continue to incur a Long-Term Storage Fee of £882.50 (€1,000) per cubic metre at that time.
On 15 February 2017, only units that have been in fulfilment centres for 12 months or more will incur the Long-Term Storage Fee of £882.50 (€1,000) per cubic metre.
Removal of single-unit exemption
Currently, one unit of each ASIN in storage is exempt from the semi-annual Long-Term Storage Fee. Effective with the 15 August 2017 Long-Term Storage Fee assessment, this exemption will end.
What options do you have?
Firstly check your Amazon Inventory Dashboard to find out if you have aged stock.
If you do have aged stock you have three options:
1) Sell the stock
Consider offering the stock at a discounted price. Black Friday is an ideal time to shift some aged inventory and regardless, if you have stock which hasn’t sold for a year you’re better off liquidating it and reinvesting the cash in inventory that will sell.
2) Improve your listing
It may well be that your stock hasn’t sold because the information on Amazon’s Product Detail Page isn’t very good. Check basic information and product photos to ensure buyers that see your item have the details needed to make a purchase decision and focus on keywords to try and attract more visitors to the Product Detail Page.
3) Remove the stock from FBA
You don’t have to leave the stock in Amazon’s warehouse, you can have it returned to your own warehouse and assess it, sell it on other channels, sell as a wholesale lot or even sell through a wholesale auction site.
4) Pay the fees
We know that some people knowingly use Amazon rather than invest in their own warehouse facilities. If that’s you and you don’t wish to remove your stock from Amazon, then you simply need to build the additional costs into your business plan.