I’ve written on this topic before, but it bears repeating as many of my readers are just now getting their first notices from Amazon that it will assess long-term service fees after midnight (Eastern) on August 15, 2013. Any sales, removal orders or destruction orders that are made before that time will reduce your fees. Here is my post from the last assessment in February with some updates.
Did you receive an email from Amazon stating that you owe long-term storage fees? Congratulations! That means you’ve been selling on Amazon for more than a year. It also means you have some old inventory sitting up there. This is pretty common. I found my first assessment period that some of my books that I sent up early on were a mistake and were gathering dust in a big way.
Amazon assesses these extra fees twice a year on August 15 and February 15. This post will show you how to look at your potential long-term storage fees and to reduce them.
The fee is $22.50 per cubic foot. That means bulky items like toys will cost more than smaller items like paperback books. The fee is assessed on the combined cubic footage of your excess inventory.
In an example given by Amazon, an excess book cost 63 cents while an excess toy cost $2.29, just to give you an idea.
Amazon exempts one item for each MSKU. So if you have four baby dishes for sale, the first one is free, they are only charging fees for the excess three. If you sent them in at different times, only the dishes that have been there a year are eligible.
First, you need to find out what items are being considered for fees. Then you need to decide if you want to leave them up there, arrange for items to be sent back or for Amazon to dispose of them (i.e. destroy them) for you. Last year I had Amazon send me back three new collector’s Barbie dolls. There had been a lot of low-ball sellers and my sales had dropped. When my sales picked up again, I sent the three back in to sell. The margin was strong enough to make it worth shipping back and forth again.
1. REVIEW YOUR INVENTORY: RECOMMENDED REMOVAL REPORT
- Inside Seller Central, click on the “Reports” Tab, then “Fulfillment” and then “Recommended Removal.” You’ll see it on the far left-hand side below “Removals.”
- You can either download this report to a spreadsheet or look at it on screen.
2. DECIDE IF YOU WANT YOUR ITEMS TO BE SENT BACK OR DESTROYED
- Decide if you want items sent back to you at 50 cents per item or if you want items destroyed at 15 cents per item. Oversize items are charged 60 cents for returns and 30 cents for disposal.
- If you think you can sell the items later on eBay or back on Amazon, then have them sent back to you.
- If the items are not worth your trouble like a book selling for $3.75, then arrange for them to be destroyed and move on.
3. REMOVE EXCESS ITEMS
- In the upper right-hand corner of the “Recommended Removal” report is a yellow button that says “Begin Removal Process”
- You may need to go through this process twice, once for “removals” and once for “disposals.”
- Select the number of items you want disposed or returned and click “continue” at the bottom of the page.
That’s it! It is pretty simple and should only take you a few minutes.
If you decide to leave some of the items up there and pay the fees, this would probably be a good time to reprice these items and see WHY they’ve not been selling. I generally leave valuable books up there because the shipping back and forth (at least $1) is more than the fee (around 63 cents).
I have a few coffee table books that I bought new that are slow sellers, but they do sell for around $60 so it is worth the fee.
If you have questions about this, you can get help inside Seller Central’s “Help.” Type in “FBA Long-Term Storage” in the search bar. This link might work, too, but if it doesn’t just go to “Help”: https://sellercentral.amazon.com/gp/help/200684750/ref=ag_200684750_cont_200700310
Lastly, you can always ask the friendly FBA Seller Support team for help. They’re awesome. You can find their number through “Help” and “Contact Us.”
Not yet been selling for a year? Be sure to look at this report about three months before your anniversary date. That will give you plenty of time to reprice and get rid of those slow sellers before fee assessment time.
Right now we are about a week out from the assessment so there’s still time to reduce your prices and sell your slowest-moving items. If they don’t sell, go in on the 15th and create a remove or disposal order then.
When this post came out in February, there were several great questions that require clarification. First, your recommended removal report is an estimate. You may sell items before then. Also, there are some SKUs that will not actually be charged the fee as they are the only unit of a particular MSKU. Look at your report carefully and call Amazon’s FBA support if you have any questions about how long a particular item has been at the warehouse.
There is sometimes confusion about which items are exempt. Here’s Amazon’s response:
To provide additional flexibility to maintain your unique selection, one Unit of each applicable product ASIN will be exempted from the semi-annual Long-Term Storage Fee if none of your Units of that ASIN have been in our fulfillment centers for less than 365 days. Please note, FBA accounts for inventory on a first-in-first-out (FIFO) basis.
So, if you have something that has not sold a unit in a year and you keep sending in more units, they will charge you the fee for all the extra units.
If you ask for items to be removed or destroyed and they sell before Amazon gets around to removing or destroying them, you will not be charged fees. The fees include shipping so it is a heck of a good deal to have stuff returned.