This morning I discovered much to my annoyance that Amazon is charging me almost 1k for what they call their FBA Amazon Long Term Storage Fees.
Ultimately it’s my responsibility of course, and there’s a reason I stoked up to the rafters (as I’ll soon explain). That said, this also affects you if you’re unlucky enough to have a product that isn’t moving fast enough, for whatever reason.Amazon FBA long-storage fees is kryptonite to FBA sellers. There's a fine line between stocking enough and guessing demand.Click To Tweet
Whatever the reason for overstocking, how f#@!ng annoying to be served an astronomical bill out of the blue.
Admittedly, you can always check the FBA storage fees section in your Seller Central dashboard, but I’m not perfect and I got busy, so the bill was unexpected. Besides, if you have a product that isn’t shifting, then knowing how much the bill is going to be doesn’t make the LTS fee go away.
In my case, overstocking was a strategy that bit me in the backside, because I overstocked before the long-term storage fees ‘idea’ was rolled out. But I feel all the same for FBA sellers who are in this position for any other reason. When you help a marketplace grow by participating, it can seem like a penalty when you get slapped with a fee from the marketplace.
Amazon helps us sellers grow too, of course, it’s a mutual relationship, but we pay for that privilege. So, in a way, we earn that potential for growth.
- We pay for having access to the market via a seller account, which is fair.
- We pay for exposure to the market via PPC ads, which is fair.
- We pay for distribution, which is far.
Is a long-term storage fee for sellers fair? I don’t know. You tell me. But I’m sure that there’s room there for compromise. Maybe fair is not charging sellers for a handful of units that are over the quota or giving sellers enough time to act.
After all, we sellers ship in stock in the hope of selling it, which makes Amazon money. We’re not really spending money to send stock in hoping that it sits on the shelves forever…
You’d think good old Amazon was running low on shelving space.
Either way, these Amazon long-term storage fees seem somewhat disproportionate to me. I did open up a support ticket at the time to double-check and shortly after received a response as long as my arm.
The verbose reply did little, so I just decided to plan my way around avoiding these FBA storage fees next time.
Here's what we're going to be covering...
Where Did These FBA Costs Come From?
As I mentioned earlier, my reason for overstocking (if I actually need a reason to send lots of products into a marketplace…) was a strategy. The strategy is (was) to build up stock on the run up to Christmas with the intention of dialling up the ad budget and hitting the ads hard.
This is not new to Amazon sellers, and it’s one proven way to improve your rankings on Amazon.
Clearly, the downside to this strategy now that these Amazon long-term storage fees have come into effect is that anything in storage for 90 days or more is now subject to an ongoing charge.
It has truly caught me with the proverbial trousers down.
How to Avoid Amazon Long Term Storage Fees
Don’t let this happen to you. Seriously.
Here are 3 things you can do to avoid falling into this trap:
- send only as much stock in as there is demand for it. In other words, don’t send a ton of stock in if you don’t know it’s going to sell. Send x units and watch closely. If you start to shift units, get ready to send more and keep on top of this so you don’t run out of units in FBA or your rankings will take a hit.
- if, like me, you’re already in the shit, then put your prices down (do a ‘sale’) and try to offload your stock as fast as possible unless you want to keep incurring fees. You will have to take a hit either way: make a loss from your stock (or break even at best) or make a loss paying Amazon.
- Have amz dispose of the units. Yes, this hurts, but it’s the cheapest option. But even then there may be a small charge to dispose of the units.
Unfortunately, those are the only 3 things you can do to avoid this in future.Storage fees mean FBA sellers now have to limit how much stock we send in and then keep an eye on it around the clock to make sure you don't run out of units.Click To Tweet
For somebody without a VA or a partner or as scattered as me (blogging, running an SEO company, writing, doing eCommerce…) this isn’t the most ideal of situations.
The other side of the coin, of course, is that it’s not Amazon’s problem that I’m busy. I get that. But this is really about whether sellers being charged is fair or could be fairer, rather than about me. I’m just using me as a case example because I got slapped.
But it is what it is. If Amazon is your way of making money, then it’s your business and nobody said it was going to be easy.Marketplaces evolve and we sellers need to evolve with them to stay on top of the game.Click To Tweet
If this is how you pay the bills, then step up and update your process to be on top of it before it bites you in the derriere like it did me.
Here’s an Ask Hoz session dealing with this question…
Things You Can do if You Get Hit With an Amazon FBA Long Term Storage Fees Bill
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