Earlier this year, Amazon.com, Inc. (“Amazon”) announced changes to how FBA fees will be assessed. Let’s take a closer look at what is changing and what you need to know to help you manage your FBA inventory effectively.
Fulfillment Centers Aren’t Storage Facilities
Amazon has grown by leaps and bounds in the last 24 years. New third-party sellers are listing their products every day. In fact, in his 2017 Letter to Shareholders Jeff Bezos noted that “more than half of the units sold on Amazon worldwide were from our third-party sellers, including small and medium-sized businesses (SMBs). Over 300,000 U.S.-based SMBs started selling on Amazon in 2017, and Fulfillment by Amazon shipped billions of items for SMBs worldwide.”
What does this mean for you? The FBA program has grown alongside the number of third-party merchants, and space comes at a premium. Selling products through the FBA program is a smart move for many sellers, because it means that items are Prime-eligible and Amazon does most of the legwork for picking, packing, shipping and customer service. However, as the program has grown, FBA fees have also increased. Fulfillment centers simply can’t become a repository for unwanted inventory, because space is limited and storing inventory that isn’t moving costs money. The recent introduction of the Inventory Performance Index (IPI) and increased FBA fees are designed to encourage sellers to keep their inventory moving steadily.
On August 15, 2018, a minimum charge of $0.50 per unit per month will be introduced for items that are in fulfillment centers for 365 days or more. You can learn more about Minimum Long-Term Storage Fees here.
There are also changes coming to the way that long-term storage fees are assessed. Beginning on September 15, 2018, these fees will be changed from being assessed semi-annually to monthly. Inventory cleanup dates will be the 15th of each month from that date forward.
These changes affect fees for the FBA program, Small & Light and Multi-Channel Fulfillment. You can learn more about FBA fee changes here.
The IPI went into effect on July 1, 2018. This score is updated each week based on ongoing inventory management. Sellers who have an IPI below 350 may experience FBA storage limitations.
How RestockPro Can Help
RestockPro allows you to get a clear picture of where your FBA inventory is, when to restock, the best time to send more inventory to the fulfillment centers and much more. You can use filters, tags and statuses like “Watch” or “Ignore” to keep tabs on inventory that you’re considering restocking in the future. (This is especially useful for seasonal items.)[Pull out quote from Joe Hyatt] “It’s extremely important to keep the right balance of items in stock without overstocking or stocking out. RestockPro is designed to help Amazon sellers manage FBA inventory effectively and determine the best time to ship to FBA from local inventory.” – Joe Hyatt, RestockPro Product Manager
Restock Suggestions gives you a quick overview of how your inventory is performing, providing all the data you need to make informed inventory decisions in one place. With customizable filters and grids, you can set your Restock Suggestions to display the information that is most important to you. Best of all, different users can set different filters, so everyone in your company can see the data that is most relevant to their role. You can also apply filters and other options to customize your nightly report to deliver only the key information you need in your inbox.
Stay in Stock with RestockPro
Ready to leave spreadsheets behind and streamline your FBA inventory management process? Click here to try RestockPro for 21 days.
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.