Amazon Lengthy-term storage charges: All the things you could know

Promoting on Amazon could be a profitable enterprise, but it surely’s not with out its challenges. 

Should you’ve been promoting on Amazon for fairly a while, you’d most likely know that managing inventory and space for storing could be a advanced and time-consuming course of. 

On prime of it, Amazon imposes long-term storage charges on objects that stay unsold for an prolonged interval. 

These charges can shortly eat into your income and derail your online business plans. 

However concern not – on this information, we’ll dive deep into Amazon’s long-term storage charges and discover methods for avoiding them. From organising automated removals to growing consciousness about slow-moving merchandise, we’ll give you the information and instruments you could keep forward of the sport and maintain your Amazon enterprise thriving.

Fast Information

1. What are Amazon’s Long-Term storage fees?
2. What is the standard Amazon Long-Term storage fee?
3. What is the minimum Long-Term storage fee?
4. How to calculate Long-Term storage fees
5. When is the Long-Term storage fee calculated?
6. How can you check the inventory for Long-Term storage fees?
7. How to find the Amazon Long-Term storage fee for your stock
8. How can you avoid Long-Term storage fees?
9. Wrapping it up

What are Amazon’s Lengthy-Time period storage charges?

Amazon’s Lengthy-Time period Storage Charges are charged by Amazon to sellers who use the Fulfillment by Amazon (FBA) service to retailer their merchandise in Amazon’s warehouses for an prolonged time period.

FBA sellers can retailer their stock in Amazon’s warehouses. Nevertheless, if the merchandise stay in storage for longer than the storage interval, then Amazon expenses a charge known as the Lengthy-Time period Storage Price (LTSF).

Amazon expenses LTSF twice a 12 months, on February 15th and August 15th. The charge is predicated on the quantity of area the vendor’s stock occupies and the size of time it has been saved in Amazon’s warehouses.

What’s the normal Amazon Lengthy-Time period storage charge?

As of September 2021, the usual long-term storage charge is $6.90 per cubic foot monthly for objects which have been saved in an Amazon success middle for greater than 365 days. Nevertheless, for objects which have been saved for greater than 730 days, the charge will increase to $15.00 per cubic foot monthly.

It’s necessary to notice that the long-term storage charge is along with different charges charged by Amazon for success companies, such because the month-to-month stock storage charge and the success charge.

If you wish to be taught extra in regards to the various kinds of charges levied by Amazon, try this article.

What’s the minimal Lengthy-Time period storage charge?

The minimal Lengthy-Time period Storage Price (LTSF) charged by Amazon is $0.15 per unit monthly. This charge is relevant to objects which have been saved in an Amazon success middle for greater than 365 days however lower than or equal to 730 days.

It’s necessary to notice that the minimal LTSF is charged on a per-unit foundation, not on a per-cubic-foot foundation like the usual LTSF. Because of this if a vendor has a small variety of models saved in Amazon’s success middle for a protracted time period, the minimal LTSF will nonetheless apply, even when the overall cubic footage of the stock is lower than one cubic foot.

Sellers also needs to take into account that the minimal LTSF is along with different charges charged by Amazon for success companies, such because the month-to-month stock storage charge and the success charge. To keep away from long-term storage charges, sellers can both take away their stock from Amazon’s success facilities earlier than the 365-day mark or enroll within the LTSF waiver program for eligible merchandise.

The way to calculate Lengthy-Time period storage charges on Amazon

Lengthy-term storage charges are assessed by Amazon for merchandise which have been saved of their warehouses for greater than 365 days. The charges are calculated based mostly on the quantity (in cubic toes) of the product and are charged on a month-to-month foundation. 

Right here’s methods to calculate long-term storage charges:

Decide the quantity of your stock:

Calculate the quantity of your stock in cubic toes. This may be performed by multiplying the size, width, and top of every particular person unit after which including up the overall for all models.

Determine the age of your stock:

Decide the age of your stock by checking the date that every unit was obtained by Amazon. You could find this info in your Stock Dashboard in Vendor Central.

Examine the long-term storage charge schedule:

Amazon’s long-term storage charges range relying on the time of 12 months and the scale of the merchandise. Examine the long-term storage charge schedule to find out the relevant charges on your stock.

Calculate the long-term storage charges:

Multiply the quantity of your stock by the relevant long-term storage charge per cubic foot. For instance, in case your stock has a quantity of 1,000 cubic toes and the long-term storage charge is $6.90 per cubic foot, your month-to-month charge can be $6,900.

It’s necessary to notice that long-term storage charges are along with the usual month-to-month storage charges charged by Amazon. It’s additionally necessary to repeatedly assessment and handle your stock to keep away from accumulating extreme long-term storage charges.

When is the Lengthy-term storage charge calculated?

As talked about earlier than, Amazon calculates long-term storage charges twice a 12 months, on the 15th of February and the 15th of August. These charges are assessed for merchandise which have been saved in Amazon’s success facilities for 365 days or extra as of the date of the charge evaluation.

For instance, if a product has been saved in Amazon’s success middle for 366 days as of February 15th, the long-term storage charge for that product shall be assessed on that date.

It’s necessary to notice that long-term storage charges are along with the usual month-to-month storage charges charged by Amazon. The charges are calculated based mostly on the quantity of the product in cubic toes and are charged on a month-to-month foundation till the product is both offered or disposed of.

As a vendor, you need to repeatedly assessment your stock and handle it to keep away from accumulating extreme long-term storage charges. You should use Amazon’s Inventory Health Report to watch the age and quantity of your stock and take motion to take away slow-moving or non-selling merchandise from Amazon’s success facilities.

How will you examine the stock for Lengthy-Time period storage charges?

To examine your stock for Lengthy-Time period Storage Charges, comply with these steps:

• Log in to your Amazon seller account on the success middle’s web site
• Navigate to the “Stock tab”

• Examine the “Stock Planning”
• Right here, you need to have the ability to discover a column on “Stock age”

• It is possible for you to to seek out the overall variety of models which can be susceptible to incurring LTSF

• It’s also possible to obtain a report that lists all of the objects in your stock which can be susceptible to incurring LTSF. This report will usually present extra particulars such because the merchandise, the ASIN, and the date the merchandise was final obtained.
• Evaluation the report rigorously to determine which objects are susceptible to incurring LTSF and take motion accordingly. This may increasingly contain making a plan to promote this stuff earlier than the charge is charged or eradicating them from the success middle’s warehouse to keep away from incurring the charge altogether.

It’s essential to repeatedly monitor your stock to make sure that you don’t get caught off guard by Lengthy-Time period Storage Charges. By taking proactive steps to handle your stock successfully, you’ll be able to reduce your bills and optimize your income as a vendor.

The way to discover the Amazon Lengthy-Time period storage charge on your inventory

To search out out the long-term storage charge on your Amazon inventory, you’ll be able to comply with these steps:

• Log in to your Amazon Vendor Central account.
• Click on on the “Studies” tab

• Choose “Success” from the drop-down menu
• Click on on “Lengthy-Time period Storage Price expenses” to see the checklist of your merchandise which have been in storage for greater than 365 days.

• Take a look at the “Lengthy-Time period Storage Price” column to see the charge for every product.

• If you wish to see the charge for a selected date vary, you’ll be able to choose a distinct time interval from the “Occasion month” menu and generate the report.

Alternatively, you need to use Amazon’s Price Preview report back to see an estimate of the charges you’ll be charged for the upcoming long-term storage charge evaluation. This report is accessible in your Amazon Vendor Central account underneath the “Studies” tab, and it offers an estimate of your long-term storage charges based mostly in your present stock ranges.

How will you keep away from Lengthy-Time period storage charges?

These are the 9 methods that may aid you to keep away from Amazon’s Lengthy-Time period storage charges:

Handle In Inventory Ranges from the start

Managing in-stock ranges from the start can assist you keep away from long-term storage charges on Amazon by making certain that you simply don’t have extra stock that sits in Amazon’s success facilities for too lengthy.

To implement this technique, you could monitor your stock ranges repeatedly and just be sure you’re not ordering too many merchandise that you simply received’t have the ability to promote inside a 12 months. You should use Amazon’s Inventory Performance Index (IPI) to trace your stock ranges and determine areas the place you could want to regulate your ordering.

By sustaining optimum stock ranges, you’ll be able to cut back the probability of getting extra stock that incurs long-term storage charges. Moreover, you need to use Amazon’s Stock Age report to trace the age of your stock and determine merchandise which may be susceptible to incurring long-term storage charges.

So we’d say handle your in-stock ranges from the start to watch and optimize your inventory levels to make sure that you’re not overstocking and incurring pointless charges. By retaining an in depth eye in your stock and making changes as wanted, you’ll be able to keep away from long-term storage charges and optimize your profitability on Amazon.

Use the Advisable Elimination Report

Utilizing the Advisable Elimination Report is one other technique to keep away from long-term storage charges on Amazon.

This report offers you with an inventory of merchandise that Amazon recommends you take away from their success facilities to keep away from paying long-term storage charges. The report is up to date repeatedly and is predicated on elements reminiscent of stock ranges, gross sales velocity, and different efficiency metrics.

By reviewing the Advisable Elimination Report repeatedly, you’ll be able to determine merchandise which can be susceptible to incurring long-term storage charges and take motion to take away them from Amazon’s success facilities earlier than the charges are charged. You possibly can both take away the merchandise from Amazon’s success facilities and retailer them elsewhere or eliminate them if they’re now not sellable.

To entry the Advisable Elimination Report, 

1. Log in to your Amazon Vendor Central account and go to the “Studies” tab. 
2. Choose “Success” after which “Stock”
3. You will notice the “Advisable Removals” report on this web page.

By repeatedly reviewing this report and taking motion to take away merchandise which can be susceptible to incurring charges, you’ll be able to cut back your prices and enhance your profitability on the platform.

Consider the Merchandise which can be Not Promoting

Evaluating why merchandise usually are not promoting is a helpful technique to keep away from long-term storage charges on Amazon. By figuring out the explanation why your merchandise usually are not promoting, you’ll be able to take motion to handle these points and enhance your gross sales velocity.

Listed here are some elements to think about when evaluating why merchandise usually are not promoting:

Product pricing: In case your merchandise are priced too excessive in comparison with your rivals, it might be troublesome to promote them. Consider adjusting your prices to be more competitive.

Product critiques: Negative reviews can impression your gross sales velocity on Amazon. Monitor your product critiques repeatedly and tackle any points that prospects elevate.

Product itemizing optimization: Ensure your product listings are optimized with related key phrases, high-quality pictures, and correct descriptions.

Seasonal demand: Some merchandise could have seasonal demand, which may impression their gross sales velocity. Take into account adjusting your stock ranges for these merchandise accordingly.

Competitors: In case you have an excessive amount of competitors for a selected product, it might be troublesome to promote it. Take into account diversifying your product choices or specializing in merchandise with much less competitors.

Take measures to handle these points and enhance your gross sales velocity and cut back the probability of incurring long-term storage charges. Moreover, by monitoring your gross sales efficiency repeatedly, you’ll be able to determine slow-moving merchandise early and take motion to keep away from long-term storage charges earlier than they change into a difficulty.

Scale back Costs

Lowering costs can keep away from long-term storage charges on Amazon. By providing reductions or reducing your costs, you’ll be able to encourage prospects to buy your merchandise and enhance your gross sales velocity, which can assist you keep away from long-term storage charges.

Listed here are some ideas for utilizing worth reductions to keep away from long-term storage charges:

Monitor your stock ranges: Be sure to’re not overstocking merchandise which can be susceptible to incurring long-term storage charges. In case you have extra stock, think about lowering your costs to encourage prospects to buy your merchandise.

Supply promotions: Take into account providing time-limited promotions or reductions to encourage prospects to buy your merchandise.

Alter your costs strategically: Use pricing instruments to regulate your costs based mostly on elements reminiscent of competitor pricing, gross sales velocity, and demand. By retaining your costs aggressive and adjusting them repeatedly, you’ll be able to cut back the probability of incurring long-term storage charges.

Leverage Amazon’s pricing instruments: Amazon presents a number of pricing instruments, reminiscent of Automated Pricing and Handle Extra Stock, that may aid you regulate your costs to keep away from long-term storage charges.

Monitoring your stock ranges, providing promotions, adjusting your costs strategically, and leveraging Amazon’s pricing instruments can assist you optimize your pricing technique and keep away from long-term storage charges on the platform.

Promote Growing old Stock By way of Amazon Outlet

Amazon Outlet is a piece of the platform the place you’ll be able to promote merchandise at a reduction to filter out extra stock.

Listed here are some ideas for utilizing Amazon Outlet to keep away from long-term storage charges:

Determine growing older stock: Use Amazon’s Stock Age report back to determine merchandise which have been within the success middle for a very long time and are susceptible to incurring long-term storage charges.

Create discounted listings: Create discounted listings for these merchandise and checklist them within the Amazon Outlet part to encourage prospects to buy them.

Leverage Amazon’s advertising instruments: Use Amazon’s advertising instruments, reminiscent of Sponsored Product ads, Sponsored Display ads, and Offers, to advertise your discounted listings and enhance visibility. Nevertheless, make sure you’re on the worthwhile aspect. 

Monitor efficiency: Monitor the efficiency of your Amazon Outlet listings repeatedly to make sure that they’re producing gross sales and clearing out growing older stock.

 Use Amazon Outlet to filter out growing older stock and keep away from long-term storage charges and optimize your stock administration on the platform.

Create Sponsored Product Advertisements and Use Amazon Promotions

That is an extension of one among our earlier factors. Creating Sponsored Merchandise adverts or providing reductions will be efficient methods to incentivize prospects to buy these merchandise. If the merchandise promote for lower than the charges, the vendor can get monetary savings in the long term. You possibly can attempt operating completely different adverts, like Amazon Sponsored Product adverts, Sponsored Brand ads, and so on., to kickstart your gross sales.

Time When Restock Stock is Despatched to Amazon

To keep away from long-term storage charges, sellers can time the restocking of their stock to happen after the February and August deadlines. This technique ensures that any unsold merchandise could have been within the warehouse for lower than 6 months by the subsequent deadline and won’t be topic to long-term storage charges. By rigorously managing their stock restocking schedules, you’ll be able to reduce the danger of incurring charges and optimize the space for storing.

Create a Handbook Elimination or Disposal Order

To keep away from long-term storage charges, sellers can request the elimination or disposal of non-selling stock earlier than the cleanup deadline. Even when the stock is just not bodily eliminated earlier than the deadline, it is not going to be charged long-term storage charges if the elimination or disposal order is submitted earlier than the deadline.

The deadline for elimination orders is the 14th of every month, and Amazon expenses a charge of $0.50 for standard-sized models and $0.60 for outsized models to return the stock. Alternatively, if the vendor doesn’t wish to maintain the stock or lacks space for storing, Amazon can eliminate it for a charge of $0.15 for traditional models and $0.30 for outsized models.

Sellers ought to rigorously consider the prices concerned and decide whether or not it’s cheaper to maintain the merchandise in storage and pay the charges or to eliminate them. By contemplating all of the charges and expenses, sellers could make an knowledgeable choice about one of the best plan of action for his or her enterprise.

Set Up Computerized Removals

Sellers can use Amazon’s settings to automate the elimination of non-selling stock and keep away from long-term storage charges. These settings enable sellers to arrange computerized elimination of all stock topic to long-term storage charges or select to take away solely merchandise inside a selected worth vary. 

By organising automated removals, sellers can eradicate the necessity to manually examine their stock each 14th of the month. This characteristic offers comfort and ensures that sellers stay compliant with Amazon’s storage insurance policies, finally saving them money and time.

Wrapping it up

Understanding Amazon’s long-term storage charges are essential for any profitable Amazon vendor. By implementing the methods we’ve mentioned, reminiscent of organising automated removals, growing consciousness about slow-moving merchandise, and optimizing stock restocking, you’ll be able to keep away from long-term storage charges and maintain your income on monitor. 

With a little bit planning and foresight, you’ll be able to keep forward of the sport and construct a thriving Amazon enterprise. So don’t let long-term storage charges catch you off guard – take motion at this time and put the following tips into follow. 

Joyful promoting!