Amazon have just give notice that new Long Term Storage fees are going to be levied on stock you hold in their EU Fulfilment centres. Fees will kick in as early as the 15th of February 2017.
Amazon say that their fulfilment centres contain millions of units that have remained in storage for an extended time without selling. Frankly we know that Amazon have run out of space in their fulfilment centres, that’s why they are forever building new warehouse and are exploring options such as Seller Fulfilled Prime which saves space in their own fulfilment centres. Amazon simply can’t afford to be a free long term storage option and if you leave unsold inventory there too long then they’re going to ding you in the wallet.
The following fee changes will take effect for inventory stored in European fulfilment centres:
Long-Term Storage Fees
Long-Term Storage Fees will be charged on 6-month-old inventory. Beginning with the semi-annual Inventory Clean-up on 15 August 2017, Amazon will charge a semi-annual Long-Term Storage Fee of £441.25 (€500) per cubic metre for items that have been in Amazon fulfilment centres between 6 and 12 months.
Units that have been in fulfilment centres for 12 months or more will continue to incur a Long-Term Storage Fee of £882.50 (€1,000) per cubic metre at that time.
On 15 February 2017, only units that have been in fulfilment centres for 12 months or more will incur the Long-Term Storage Fee of £882.50 (€1,000) per cubic metre.
Removal of single-unit exemption
Currently, one unit of each ASIN in storage is exempt from the semi-annual Long-Term Storage Fee. Effective with the 15 August 2017 Long-Term Storage Fee assessment, this exemption will end.
What options do you have?
Firstly check your Amazon Inventory Dashboard to find out if you have aged stock.
If you do have aged stock you have three options:
1) Sell the stock
Consider offering the stock at a discounted price. Black Friday is an ideal time to shift some aged inventory and regardless, if you have stock which hasn’t sold for a year you’re better off liquidating it and reinvesting the cash in inventory that will sell.
2) Improve your listing
It may well be that your stock hasn’t sold because the information on Amazon’s Product Detail Page isn’t very good. Check basic information and product photos to ensure buyers that see your item have the details needed to make a purchase decision and focus on keywords to try and attract more visitors to the Product Detail Page.
3) Remove the stock from FBA
You don’t have to leave the stock in Amazon’s warehouse, you can have it returned to your own warehouse and assess it, sell it on other channels, sell as a wholesale lot or even sell through a wholesale auction site.
4) Pay the fees
We know that some people knowingly use Amazon rather than invest in their own warehouse facilities. If that’s you and you don’t wish to remove your stock from Amazon, then you simply need to build the additional costs into your business plan.
One Response
Would be nice if you could get your stock on sale on Amazon in the first place, as first they lose the stock, fob you off with excuses, all the time the clock is ticking as that stock loses value. I think it is shocking they way some 3rd party traders have been treated. £1000s they have lost, new games releases just sitting in boxes losing pounds every day.
Amazon has fallen off a cliff as far as service is concerned. I am more than happy to keep all our stock, but your are virtually forced to use PRIME services. I know am not the only one who thinks this. Amazon have got the customer pre programmed far too well. Crazy thing is the customer is paying a lot more to shop with Amazon with us than eBay or go direct, but they buy.
Amazon are costing us money now, some of our stock would move in hours nevermind months, they are not living up to their end of the bargain.
I like the idea of seller fulfilled PRIME how that works I have know idea it will just be back to using RMG.
We have kept our Amazon stock to a minimum this year as I have never seen the point in just shifting boxes, and we are not going to use them next year till maybe peak again.
They could offer to return the stock like they did back in August we recalled about 400 units and it was the correct call as it has now all sold on eBay