Guide to Amazon FBA Storage Fees
FBA storage fees are fees that Amazon charges any seller who uses its Fulfillment by Amazon (FBA) service. From a seller’s perspective, sellers need this information to make profitable decisions when it comes to their inventory. FBA storage fees depend on the size of your goods and the duration they spend in Amazon fulfillment centers.
The primary things are product weight and package dimensions, and then you can write seasonal fluctuations. By knowing the factors that impact FBA storage fees, sellers will know what to keep in mind about their inventory management strategies and how to avoid unavoidable costs.
Advantages of Using Amazon FBA for Sellers
Amazon FBA, or Fulfillment by Amazon, is a comprehensive and diverse selling solution that sellers can take advantage of. The seller has less autonomy over some aspects of order fulfillment as this service ensures storage, packaging, shipping, and customer relations. At the same time, the salesperson focuses on strategic tasks such as research, product design, and product promotion.
The research shows that more than half of Government Service Insurance Systems (GSIs) use Amazon FBA. In addition, 66% of the top 10,000+ sellers utilize Amazon FBA to handle all of their order fulfillment needs. These numbers indicate the service’s high value and popularity.
The following are the main benefits of using Amazon FBA for sellers-
- Fulfillment: Amazon is also responsible for picking, packing, and delivering orders.
- Customer Service: They guarantee that your products will be backed by Amazon customer service.
- Inventory Storage: Amazon possesses your goods and sells, distributes, and fulfills them from its warehouses.
- Faster Shipping: Amazon has speedy services it seeks to provide to its customers, such as Prime.
- Low-cost shipping: When it comes to reducing costs such as packaging, choosing the right carrier, or rate-shopping, sellers can cut costs significantly, which helps create more affordable products and higher profit margins.
- More storage space: Amazon FBA allows sellers to choose flexible storage and expand their product offerings, meet overages, and meet high demand, especially during peak seasons. This can easily translate into developing good customer relationships and better turnover rates.
Amazon Storage Fee Explanation
Amazon uses a metric to determine the cubic feet of space your inventory occupies in its storage centers for sale. However, this depends on the size of the product being packaged, and the measurement is based on the size of the product once it is packaged.
- Amazon blinks based on the actual space occupied by storage space inventory in the facilities owned by Amazon.
- Amazon Cubic feet can be obtained by dividing the length, width, and height of your product in inches by 1728.
- Cubic feet are important in the organization and determination of storage costs within a particular warehouse.
Types of Amazon FBA Storage Fees
There are two main types of Amazon FBA storage fees: monthly storage fees and long-term storage fees. Monthly storage fees are billed each month based on the square foot of your inventory. Additionally, there are extra fees during holiday seasons and other peak times.
The Long-term storage fees apply to inventory stored for more than 365 days. This Amazon policy is designed to address issues related to excess inventory and optimize the use of available storage space.
Factors Impacting FBA Storage Fees
Amazon FBA storage fees can significantly reduce the profit margins of sellers who use the service. The price may change depending on the size of the product, storage time, and busy season. Knowing these costs helps sellers keep track of their inventory and reduce storage expenses.
1. Inventory Volume and Size
The longer you take to settle your bills, the higher your interest rates on money borrowed from Amazon, where it stores your products. In most cases, the bigger and heavier the parcel, the higher the total cost charged to the user.
- Cubic Feet: In other words, the more space your inventory consumes at Amazon’s fulfillment centers, the more costly it is to hold it.
- Size Tier: Amazon divides products into three-dimensional categories, which include standard size, large standard, and oversize. Big items also attract extra storage charges.
2. Inventory Age
This fee is incurred when your inventory takes longer with Amazon inventory, particularly beyond 180 days; these fees are incurred when your inventory sits in Amazon’s fulfillment centers.
- Long-Term Storage Fees: You are allowed to store your inventories in Amazon warehouses for 180 days without being charged any long-term storage fees. This fee is charged according to the volume of stock you want to store and varies with the storage period you choose.
3. Storage Utilization Ratio
This ratio helps assess the capacity of your inventory storage in the business. The higher the ratio, the more storage will be provided relative to sales, resulting in higher storage fees.
- Average Daily Inventory Volume: This is the average stock or the average amount of product you take into the store or prepare daily.
- Average Daily Shipped Volume: This is the average amount of inventory you ship daily. For inventory turn, this is the average number of times you cycle through your stock every year.
- Ratio: The higher the number, the closer you are to storing more inventory than you make in sales. As a result, you end up paying more to store your products.
4. Peak Seasonality
Seasonal fluctuations are also evident in that Amazon’s storage fees tend to go up during the busy seasons to capture the then-high demand and limited space.
Seasonal Charges: Amazon also allows ‘storage’ access fee surges, especially during the festive holidays or other busy months. This is to address demand density and the constrained warehouse space.
5. Product Category
Some specific types of products may be stored under certain conditions and fees, or some types of products may be prohibited from being stored. For instance, if goods are hazardous or bulky, they will attract a higher price than goods that are neither of these.
Category-Specific Fees: Some product categories in storage have conditions and additional fees. For instance, if a product contains Harmful and inflammable substances or is too bulky, it will cost more to insure.
How to Calculate Amazon FBA Storage Fees
To calculate Amazon FBA storage fees, determine the inventory volume in cubic feet by multiplying the product’s dimensions (length × width × height) and dividing by 1,728. Multiply the volume by Amazon’s storage rate per cubic foot, which varies by season and product size. Use Amazon’s FBA Fee Calculator for accurate estimates.
Amazon FBA Storage Fees in the United States (USA)
Amazon FBA offers a smooth experience selling and fulfilling your products, but storage costs are important to know. Every Amazon seller must manage inventory to avoid additional storage costs.
FBA will analyze all aspects of storage costs and clearly explain how you can navigate through these elements to manage your inventory wisely. So, if you are aware of these costs, you can control them and thus maximize your profits while cutting down your expenses.
| Month | Standard size | Oversize |
Through March 30, 2024
| January – September | $0.87 per cubic foot | $0.56 per cubic foot |
| October – December | $2.40 per cubic foot | $1.40 per cubic foot |
Starting April 1, 2024
| January – September | $0.78 per cubic foot | $0.56 per cubic foot |
| October – December | $2.40 per cubic foot | $1.40 per cubic foot |
Additional inventory storage costs may be applicable for certain products, such as explosives, flammable products, toxic products, and infectious or corrosive products. In addition, sellers who have excess inventory compared to recent sales may be imposed with inventory storage costs.
Data Source: Amazon
Amazon FBA Storage Fees in the United Kingdom (UK)
Fulfillment by Amazon or FBA storage fees in the United Kingdom depends on the dimensions and mass of your products and the time they will be stored in Amazon’s warehouse. You will have a monthly storage fee, which is relatively higher during the high-demand season from October to December. Also, storage fees for any item for more than a year are charged per cubic foot or unit.
To reduce costs, ensure the correct quantity is ordered, use Amazon’s inventory management system, and perhaps consider processing to remove unnecessary products.
| Month | Clothing, Shoes, Eyewear and Handbags (standard size) | Dangerous Goods – Hazmat (standard size) | All other categories (standard size) | Hazardous Goods – Hazmat (Oversize) | All other categories (Oversize) |
| January – September | £0.51 per cubic foot per month | £0.74 per cubic foot per month | £0.76 per cubic foot per month | £0.64 per cubic foot per month | £0.50 per cubic foot per month |
| October – December | £0.65 per cubic foot per month | £1.03 per cubic foot per month | £1.19 per cubic foot per month | £0.88 per cubic foot per month | £0.69 per cubic foot per month |
Conclusion
This article helps sellers better understand Amazon FBA storage fees to avoid high costs. Thus, by adjusting the rates of inventory, seasonal storage, and takedown orders, sellers can greatly reduce storage costs. Therefore, constant updates by sellers on the fee structure and overall policies within Amazon can promote efficient enhancement of the FBA process and maximize the amount of profits being made.
If you are new to selling on Amazon and want to boost your sales and profits, consider hiring Amazon consulting experts to help grow your business.
