Long-term storage (LTS) fees are coming! What are LTS you ask? Well twice a year (August 15th and February 15th) Amazon assesses all inventory that has been in their warehouse for over six months with an extra storage fee on top of their standard monthly short term storage fees. They only assess items in which you have more than one. Here is Amazon’s announcement that was available on the Seller Central home page:
The next Fulfillment by Amazon inventory cleanup is scheduled for August 15, 2016. On that day, units that have been in an Amazon fulfillment center in the U.S. for six to 12 months will be assessed a Long-Term Storage Fee of $11.25 per cubic foot. Units that have been in an Amazon fulfillment center for more than 12 months will be assessed a Long-Term Storage Fee of $22.50 per cubic foot.
If you file a Removal Order before August 15, 2016, to have this inventory returned to you, you will be unable to send in additional units of these ASINs until January 1, 2017. You can continue to sell through your remaining inventory of these ASINs. You are responsible for paying appropriate fees for the return of these units.
If you are using the automatic-removals option in your seller account, impacted inventory will be processed prior to any Long-Term Storage Fee charges being added to your account. Removal fees may apply. If inventory is returned to you via automated removal, you will be unable to send in additional units of these ASINs until January 1, 2017. You can disable automated removals or change to “Dispose all units eligible for Long Term Storage fee” by selecting Fulfillment by Amazon in your Settings in Seller Central. Select the “Edit” button in Automated Long-Term Storage Removals Settings. Learn more on the Remove inventory automatically help page.
You may regain the ability to send this ASIN to Amazon if your inventory levels are less than your total projected sales for the next four weeks. These projected sales are based your actual sales from the past 90 days.
To see your affected inventory, view the FBA Inventory Age page on your Inventory Dashboard or download the Inventory Age report in the Fulfillment Reports section of Seller Central.
So let me try to break this down for you. First let’s start with how you find out what items, if any, you have that will be charged and what that fee will be. You can click link above and it should take you directly to the FBA Inventory Age report. However, here are screen prints of how to get there in the event the link ever gives you issue. First you go to the Inventory tab. From the Inventory tab you want to go to your Inventory dashboard:
From the Inventory Dashboard tab you want to hit the Inventory Age tab:
Once you get to the Inventory Age page you can see the age of all of your inventory. It will also identify the estimated LTS fees for each item. In these examples you can see the LTS fees for these two skus alone would be $19.06. However, I also know that since there are 40 items it would cost me $20 ($.50 per unit) to have the items sent back to me. Another thing you will need to consider besides the removal fees is that you will NOT be able to send the item in again until January 1st, 2017 meaning you will completely miss out on Q4 with these items.
Once you run this report and determine what items are scheduled to be hit with LTS then you need to determine your best approach. Do you try to unload now on Amazon on the cheap and cut your losses? Do you hold your price and hope to move before next round of LTS in which is double for items over 12 months of age. Do you pay $.50 cents a unit to return back to you knowing you won’t be able to send back in until January 1st? Do you have Amazon destroy the items at a rate of $.15 an item? Or do you have Amazon liquidate the items in which they estimate (but don’t guarantee) that they will get you 10% of the selling price back. As terrible as that sounds, it sure beats paying $.15 an item to have Amazon dispose of the item for you. Editors Update: Just got an email hours after launching this blog that Amazon is waiving removal fees from today (August 4th) to August 14th to try to encourage to get your crap out of their warehouses. That definitely makes that option more appealing.
As much as LTS fees can be a pain, it can lead to other opportunities. In many cases sellers drop their prices down to rock bottom prices in order to try to move slower moving units. These lower prices can lead to Amazon Flip opportunities in which you can buy low on Amazon and sell high at a later date.
One thing you should do is use this as a learning experience. Why didn’t these items sell? What can you do to prevent more items from being included on this list in the future? Not ever buy will work out, but if you can identify trends on the ones that don’t it can help you be more successful going forward.
