Amazon is Changing it’s Policy Concerning Long Term Storage Fees

Previously, Amazon would consider one unit of each ASIN in storage as exempt from the twice-annual long term storage fee.  This policy will be changing on February 15, 2017.  The new policy is that Amazon will now charge long term storage fees on ALL inventory that has been sitting in a US FBA facility for six months or more.

So, again, what’s really going on here?  Amazon is making it clear that they don’t want to be in the long term storage business, and I can’t blame them for that.  We’ve been doing FBA inspection and FBA Prep for a long time now and we don’t like being in the long term storage business either.  We like client’s inventory to come into our warehouse, get inspected/prepped, and get shipped down to Amazon.  This business flow allows us to keep the size of our warehouse smaller than if we had to do a bunch of long term storage.  The idea is to actually sell products, and that can’t happen if they are sitting in our warehouse for long periods of time.

Amazon only has so much warehouse space, so they too want to maximize the income they receive per square inch.  They do this by rewarding the fast moving (income producing) inventory, and penalizing the slow moving (non-income producing) items.  Is anyone really surprised by any of this?

The one problem Amazon’s recent policy changes has created for private label sellers is that you have to purchase from the China factories in certain quantities, but Amazon only allows you to send a fraction of that inventory down to one of their warehouses.  This is an issue, because once it hits the US FBA prep/3PL/FBA Inspection service, then what?   They can only send so many units to FBA and then you have to store the rest.  We’ve been trying to keep our storage fees low under that kind of scenario, and hopefully that helps Amazon sellers deal with the Amazon restrictions on inbound quantities.

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