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Wednesday, October 27, 2021

Amazon FBA Storage Fee

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Amazon FBA Storage Fee – 2021

In this blog, we are going to tell you exactly what Amazon FBA storage fees are. Similarly, how you can calculate them yourself. This will help you tremendously in knowing your true profits or provide a precise estimation at least. So, this way you can have an idea of the profits you are going to make. This will help you in deciding on doing business on Amazon or not.

Some so many sellers who do not know about the Amazon FBA Storage fee. Similarly, even if they know they calculate it wrong. So, we are here to make sure that doesn’t happen to you. After going through this blog, you will be able to set yourself up for better. You will be ready to do business on amazon with profits. This information will help you if you are starting to sell on amazon or you are already a seller.

Amazon FBA Storage Fee or Inventory Fees

Storage fees are based on the daily average numbers of your products. These fees are the cost of storing your inventory in one of the fulfillment centers.

Amazon storage fees are not that complicated but it is important to keep them in mind. When you are selling on Amazon via the Amazon FBA program then you will have the Amazon referral fee. This is the fee that Amazon charges while using its platform. Tapping into amazon’s customer network gives them the right to charge a fee. 

As a seller, you are using Amazon’s channel of customers to sell your product. Moreover, the referral fees are quite reasonable as compared to the benefits Amazon provides. Referral fees are about 15% of the total price of an item.

The best place to look for information on the storage fees is on Amazon itself. They keep updating their policies. Therefore, it would be good to visit them from time to time.

Amazon FBA Storage Fee Calculation

How does amazon calculate the storage fees? Amazon calculates storage fees per cubic foot. This means that they charge a specific price per cubic foot of space. This calculation is done on your entire inventory. So, the more space you use in the warehouse the more you have to pay. Similarly, the opposite is also true. The less space your inventory consumes the less you have to pay. There are usually two categories when it comes to storage fees.

  1. Standard-size
  2. Oversize

Fees vary according to the size of a package. The smaller packages are more difficult to handle and require more attention than oversized packages. Standard-size products require extra shelving, drawers, and more bins to store. Amazon keeps everything tidy and organized. This is one of the main reasons for their huge success. The organization and the management of the warehouse are done cleanly and efficiently.

The Amazon workers pay extra attention to small size packages. So, when there is a quick delivery service required, they can immediately pick it up and deliver it.

The current cost of standard-size items is $0.75. As we have said before, these can change any time so you need to visit them often for updated prices. The cost of oversized items is $0.48.The price tag on oversized objects is less because they do not require any special treatment. Moreover, they are easy to handle and organize.

Moreover, the prices or storage fees will increase in the months of Oct-Dec. Why the sudden increase? This is because of special events or yearly occasions like black Friday etc. The number of sales increases dramatically in these months so sellers send more and more items to the fulfillment centers. This decreases the space in amazon warehouses. According to the supply and demand rule if there is less of something then it is expensive. The case is the same with Amazon FBA Storage Fee. When there is less space, then the space becomes more valuable. Therefore, amazon charges more for that valuable space.

Amazon FBA Storage Fee for Long Term Storage

A lot of sellers might get confused with this one. If you have something in one of the fulfillment centers for too long then this will happen: The total cost of storage will increase exponentially.

The normal cost per cubic foot was $0.75 per cubic foot. If those items are in there for more than a year then Amazon will charge $6.90 per cubic foot. So, this is one of the things you have to watch out for. Amazon makes sure that the space is utilized properly and the sellers are moving their inventories constantly. So, if a product is sitting there for more than a year then it is taking valuable space.

So, what can you do? By any chance or reason if your items are sitting in the warehouse for a long time then place a removal order. The cost of removing items from an amazon warehouse will cost you about $0.5. This is the best way to avoid long-term storage fees.

If you have more questions about Amazon FBA Storage Fee then feel free to drop a message. Contact us for more details.

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