If your Amazon FBA products are collecting dust in Amazon fulfillment centers, get ready to pay outrageous long term storage fees.
Twice a year, on August 15th and February 15th, Amazon clears out the FBA product deadwood from their Amazon fulfillment centers. The way they do this is by charging outrageous long term storage fee to encourage FBA sellers to get their slow-moving products off their shelves.
On every August 15th and February 15th Amazon charges FBA sellers $11.25 per cubic foot, for any products that have been on their shelves for six to twelve months. Long term storage fees jump to $22.50 per cubic foot for any product that is still in their fulfillment centers for more than twelve months on these so-called “Inventory Cleanup Dates.”
Amazon’s long term storage fees are in addition to your regular storage fees.
It is important to note that Amazon charges long-term storage fees on top of your existing storage fees. Regular storage fees can range from $0.43 to $2.25 per cubic foot depending on the time of year and whether your packages are standard size or oversize.
Amazon exempts a single unit of inventory from their semi-annual long-term storage fee.
I am not sure why Amazon decided to exempt one unit of inventory from their Long Term Storage fees. I suspect they did it so they would not appear to be total heartless dogs.
What should you do if you have tons of inventory that is about to be charged long-term storage fees?
In a nutshell, you have the following options if you are facing the prospect of paying Long-Term Storage fees:
- You can give away your product or put your items on sale to get them off the shelves. Even if you incur a loss, this option might be beneficial in the long term because it will spike your sales. When you drastically increase your sales, it will cause Amazon’s algorithm to raise your product rating. In the following video, Cody Hawk explains how he avoids long-term storage fees by becoming proactive about getting slow-moving products off Amazon’s shelves after ninety days.
- You can have Amazon send back your product and sell it on EBay or your Ecommerce store. The following table lists the fees Amazon charges for returning products or for disposing of
- You can have Amazon dispose your products and deduct the cost of disposal and the cost of the disposed product from your taxes.
In summary, it is vitally important that you take action to avoid paying Amazon’s long-term storage fees.
It is important to be proactive if your product is not selling well on Amazon. Make attempts to improve the quality of your listing. Taking steps to increase your product reviews might also improve your product’s ranking. Another thing to consider is lowering your selling price. If after ninety days, you still have lots of product languishing in Amazon’s product fulfillment centers, you need to start getting aggressive in lowering the amount of inventory sitting on Amazon’s shelves. If all your attempts fail, you might want to consider having Amazon send your product back and selling them on Amazon using Fulfillment by Merchant (FBM). Your other option would be to sell your product on EBay or your Ecommerce site. In a worse case scenario, you could try selling your items at a garage sale, flea market or on Craig’s List.