Understanding Amazon FBA Storage Fees

Amazon FBA storage fees vary. Keeping track of it all can get complicated for sellers with varied inventory. In this post, we aim to shed some light on what these fees are and how you can stay up to date on them. This way, you can avoid unnecessary fees and stay profitable.

Overview of Amazon FBA Storage Fees

Amazon charges two main types of storage fees – monthly inventory storage fees and long-term storage fees. These fees vary based on product size and season.

Monthly Amazon FBA Storage Fees

Amazon charges monthly inventory storage fees based on the amount of space your inventory occupies in their fulfillment centers.

The marketplace calculates this by the average daily volume throughout the month. Amazon looks at your product sizes – standard, oversized, and bulky. Then they look at the time of year. Fees differ between peak season (October-December) and off-peak season (January-September). New inventory receives a free storage period (typically 30 days) before storage fees start accruing. 

The most reliable source for current fee information is Amazon Seller Central’s fee schedule. This page details storage fees per cubic foot based on product size and time of year.

Changes and Updates in Fee Structure

Amazon FBA storage fees changes recently, and some changes are still rolling out. We have a summary of these changes in our Amazon FBA fees guide. Briefly, as of April 15, 2024, sellers can expect:

• Reduced storage fees in off-peak months (January-September) by $0.09 per cubic foot for standard-sized products.
• Reduced storage fees by $0.61 per cubic foot for large bulky products
• Additional discount of $0.77 per cubic foot on storage fees year-round for products priced below $10.

Long-Term Amazon Inventory Storage Fees

Amazon also charges a minimum monthly storage fee of $0.15 per unit. This applies to standard and oversized items stored for more than a year, but less than two years. Bulky items have a different minimum fee structure. This minimum fee applies regardless of how much storage space an item occupies. For items stored longer than 730 days, Amazon charges a fee based on the average daily cubic foot of space they occupy throughout the month. Different rates for standard-sized, oversized, and bulky items apply. 

Strategies to Manage and Reduce Storage Fees

Long-term storage fees can quickly erode your profits, especially for slow-moving items or those with low margins. To minimize long-term storage fees, implement the following proactive strategies.

• Regularly monitor how long your inventory has been in storage. Amazon Seller Central provides reports that show inventory age. 
• Prioritize storing fast-selling items with higher profit margins. 
• Remove items nearing the 365-day mark to avoid long-term fees.
• Analyze historical sales data to forecast future demand. This helps you determine optimal reorder quantities and avoid overstocking items that might become slow-moving.
• Relist slow-moving items on other sales channels or run promotions to clear out old inventory. 
• Try bundling slow-moving items with faster-selling products to create more appealing offerings and potentially increase sales velocity. 
• Consider seasonal trends. If you have products with predictable seasonal sales cycles, adjust your inventory levels accordingly. Store more inventory during peak seasons and reduce stock during off-peak times to minimize long-term storage costs.
• Run targeted promotions or discounts on slow-moving items to incentivize purchases and clear out old stock before long-term storage fees apply.
• For slow-moving inventory, explore utilizing Amazon’s MCF service. This allows you to store these products in off-site locations during off-peak seasons, reducing storage costs in Amazon’s fulfillment centers. However, MCF comes with additional fulfillment fees.

Note that the new inbound placement service fee can impact overall storage costs. You’ll need to factor in this additional cost layer when deciding how long to keep inventory in storage. This is especially true for bulky items where the inbound fee is higher.

Utilizing Amazon Tools and Reports

Amazon Seller Central reports are valuable tools for monitoring and managing your inventory levels. This helps a great deal in avoiding long-term storage fees. You can access the relevant information through a combination of reports in Seller Central.

The Inventory Age report shows how long your inventory has been in fulfillment centers. You can find it by navigating to Inventory > Manage Inventory in Seller Central. Look for a filter or option to sort by “Age” or “Last Updated.” The FBA Inventory Storage by ASIN report details your current inventory levels for each product. They are identified by their ASINs stored in Amazon fulfillment centers. You can find it by navigating to Reports > Inventory > FBA Inventory Storage by ASIN in Seller Central.

Using the Inventory Age report, you can identify items nearing the 365-day mark. Cross-reference these at-risk items with their current storage levels. This will help you prioritize which items to address first, considering both the storage duration and the quantity of stock. For at-risk inventory, consider increasing sales efforts, as mentioned above. If neither that nor creating removal orders is not the best solution, consider liquidating or donating. You can minimize losses this way for unwanted inventory. 

Some third-party inventory management tools can integrate with Seller Central and provide alerts when inventory approaches the long-term storage threshold. Schedule regular reviews (weekly or bi-weekly) to analyze inventory age and storage levels. This proactive approach allows you to address potential long-term storage fee issues before they become significant costs.

Amazon reports don’t directly show the exact long-term storage fees you’ll incur. However, by identifying at-risk inventory, you can take preventive actions to avoid these fees altogether. Take proactive steps based on the insights to effectively manage inventory and avoid long-term storage fees.

Amazon FBA Fee Calculator

You can use Amazon’s FBA Fee Calculator to estimate storage fees and make informed decisions about inventory management​​. Note that the calculator doesn’t directly show storage fees. It does, however, provide information that can help you estimate them.

Go to Seller Central and navigate to the Tools & Resources section. Within that section, find FBA Fees and select FBA Revenue Calculator. Enter your expected selling price on Amazon. Then, input your estimated number of units you expect to sell per month. Select the appropriate category your product falls under. Then enter the dimensions (length, width, and height) of your product’s packaging. 

The calculator will show you the Estimated Total Amazon Fees. This combines the estimated Referral Fees (a percentage of your selling price) with the estimated Fulfillment Fees. Fulfillment fees include picking, packing, shipping, and customer service, but also factor in storage costs to some degree.

Generally, higher fulfillment fees indicate potentially higher storage costs. Products with larger dimensions or higher weights tend to have higher fulfillment fees due to the storage space they occupy. Reference the FBA Fee Schedule within Seller Central to get a clearer picture of storage fees. This schedule details storage fees per cubic foot based on product size (standard-sized, oversized, bulky) and time of year (peak vs. off-peak season). Remember that new inventory receives a free storage period (typically 30 days) before storage fees start accruing.

If storage fees become a significant concern for certain products, explore alternatives. Fulfillment by Merchant (FBM) or third-party fulfillment services might offer lower storage costs. 

Frequently Asked Questions

How can I estimate the impact of seasonal fluctuations on my storage fees?

Amazon charges different fees for peak and off-peak seasons. By following this calendar, you can tell what costs to expect. If your sales vary or you sell seasonal items, look at your historical data. As you pinpoint trends in your reports, you will see what sells and when year over year. Mapping this fluctuation can help you determine when and how much to stock. This way, you won;t overstock or run out of stock.

Can the Amazon FBA Fee Calculator help predict future storage fees based on current inventory levels?

The Amazon FBA Fee Calculator can estimate your storage fees based on the dimensions and weight of your products you currently have in stock. By multiplying the estimated storage space per unit by the number of units in stock, and then considering the current storage fee schedule (which varies based on month and storage tier), the calculator can provide an approximate cost for current storage. However, inventory levels constantly change due to sales and new product inflows. The calculator cannot predict future sales or how long your current inventory will stay in storage. Amazon’s storage fees can change throughout the year, too. The calculator might not reflect these potential future adjustments.

How do removal orders work, and when is it best to use them to manage inventory costs?

Creating removal orders is not the best solution to every long-term storage problem. The best cases to use removals for are:  

• excess stock of products outside their peak selling season 
• damaged or defective products (if you prefer not to donate but they are still usable)
• products nearing expiry (to avoid potential disposal fees for unsellable items)
• discontinued products (of you can’t move them through discounts and promotions)
• products you plan to repackage or relaunch with new branding or variations
• Products you plan to fulfill yourself moving forward, like bulky or heavy items with high FBA fulfillment fees

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• How to Read a Balance Sheet & Truly Understand It

Conclusion

By understanding Amazon FBA storage fees and implementing these strategies, you can effectively manage your Amazon inventory. This helps you avoid unnecessary costs, maximizing your profitability as an Amazon seller. Remember, the key lies in accurate forecasting, strategic planning, and actively managing your inventory to optimize storage space and sales velocity.