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Avoiding Amazon FBA Fees for Long Term Product Storing
Hey it’s Hoz here with another ask Hoz session and in today’s session I’m going to answer the manic question: how can I sell my Amazon FBA inventory fast to avoid FBA storage fees?
Well, first of all, let me say that I feel for you because this happened to me: I got hit big time with long-term storage fees from FBA so I know how that feels.
One of the strategies that sellers used to use very effectively was to build up stock –
especially after Summer – before hitting Christmas because obviously, that’s Amazon’s most profitable quarter, which is well known as Q4 of Quater 4.
This is when many sellers make their money. Usually, from mid-November to late December there’s a buying frenzy as people rush to buy presents, and this is a huge opportunity for sellers, with potential to make good money.
Now, as an Amazon seller, one of the worst things that can happen to you (relatively speaking) in terms of being able to sell, is running out of stock. When you run out of inventory, your rankings plummet and it can be quite hard to recover those old positions afterwards.
So, the strategy was to build up stock in order to be ready but also so as not to run out of product. And I did this myself: I built thousands of units into stock.
One of the many issues on the run-up to and during Q4 is that it gets harder usually to get your inventory into Amazon:
- your suppliers usually get busier with every everyone’s orders so there’s a longer time for your product especially if it’s coming from China to get to you or to get to FBA
- there’s a lot more for the customs guys to check over so there’s usually or there’s potentially a delay
- the same is true for the local customs guys when that stock hits your own country: customs guys are working overtime dealing with all the Christmas influx and then there’s usually a queue to get into Amazon FBA
All this happened to me the previous year, when I actually ran out of stock. I had all this Christmas stock waiting to get into FBA and I had to wait forever. There were delays and issues all along the supply chain.
Finally, my stock got into FBA but by that time it was too late: I’d missed the buying frenzy season. Anyway that’s
So the old build up your stock method is not such an attractive strategy now because I believe in February of this year Amazon came up with the smart idea of charging sellers for any stock that’s been in their warehouses for six months or more.Okay so now you
Okay so now you have this shorter window in which to act. It does put pressure on sellers in a way because if you want to take advantage of the Christmas buying season and you don’t want to hit that bottleneck at Christmas it means that you have to either buy your stock during the year and stock it at home and then send it all in one, go or spend big time towards September or October and get all your stock in.
The last thing you want to do is run out of stock mid-December, so you want to have plenty of stock – that’s not optional. But the other side of the coin now is that if you don’t sell that stock in December and in the following months then there’s going be a storage fee, and yes that’s exactly what happened to me.
After missing out on the previous Q4 I started to build up my stock early and by the time September came I got hit with a massive bill. I was not impressed. So I feel for you. So
I was not impressed.
So, addressing your question: how can I sell
How can I sell my Amazon inventory fast to avoid FBA storage fees…
Unfortunately, you may have to break even or take a loss if you’re really trying to avoid FBA storage fees.
The key is going to be getting rid of that stock as fast as possible. Coupon discounts is a strategy that you may want to consider, but do look into Amazon’s T&C’s to make sure that you’re compliant.
Not so long ago you used to be able to do crazy coupon discounts and really promote the hell out products, but Amazon’s Terms of Service can change quite frequently so always check that whatever strategy you implement is within their Terms of Service. if you’re going to
The issue around giveaways was that sellers did these crazy $1 giveaways in order to shift a lot of product to increase their rankings, and Amazon took exception to that particular way of doing things.
Anything that’s been overused by sellers and marketers can always become a grey area. Of course, coupon discounts is a proven marketing strategy, so they’re not likely to ban that, but just be smart about the way you go about this and where you promote your giveaways – just play by the rules.
Now, another thing you can do is to simply discount your products. This is where you may break even or even lose some money but you have to weight up the cost of the storage fees and all the other factors:
- how much stock you have
- how much time you have until that fee hits
If your time is running out and you really want to avoid FBA storage fees then you need to offload some products quickly and that often means taking a loss.
So the strategy here is two-fold:
- price your product lower than your competitors
- increase your PPC spend
The bad news, of course, is that you’re going to have to amp up your pay-per-click advertising: you need buyers to see those discounted products.
That said, logically if your product starts to sell more your advertising is going to become cheaper and then you may start picking up organic sales as that product starts to rank, which takes me to the next strategy:
Increase your price as you start to sell
If you drop the price of your product and you amp your pay-per-click and you start getting more visitors and then more sales those products are going to naturally start to rank. Amazon wants to make money too, so if Amazon knows that that product is selling it’s in Amazon’s interest to present that product when somebody is searching for that product. That’s the logic behind any buying algorithm. Now
If you hit page one (the top 16) and then your sales really start to come in, then start to increase that price but do it gradually. And if you manage to stay on page one as you increase your price, you may start to make a bit of profit then, which, hopefully – depending on how many sales and on how many units you actually have – may start to then cover some of the costs from the previous low-priced sales. But the start of it all is to
But your starting point is to lower the price and stick to it until you start picking up visibility. But even if you don’t end up ranking on page one, as long as your organic sales start to pick up, start to nudge that price up a little bit at a time and keep your eye on the stats.
If you really can’t afford the storage fee and you can’t seem to shift product or can’t afford to advertise, then you’re going have to find out how much it’s going cost you to have Amazon ship all your stock back to you. It’s not that
It’s not that expensive per unit, but obviously, if you have a lot of units that can work out expensive. Once you get your stock back, then start to sell it through other channels like:
- car boot sales
- local markets
- local shops that sell similar products
- anywhere else you can
If you can’t afford to have your FBA stock shipped to you and you can’t afford the storage fee and you really need to let your products go, I’m afraid the last resort is to have Amazon destroy your stock and I think that comes with a charge now.
Other viable options may be as follows:
- find somebody who may be interested in going halves with you or investing in that stock, and actually get it shipped back to you sell the units anywhere you can, splitting any profit
- find other sellers who may want to buy your stock (just don’t contact them via Seller Central! Watch the video to see what I suggest instead.
I hope that you get plenty of ideas from this answer.
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