Are You Losing Too Much Because of Long-Term Amazon FBA Fees?
The world of Amazon FBA attracts people for a number of different reasons, but it’s fair to say that one of them is that it seems relatively easy to make money with this program. While there’s certainly an element of truth to that, it’s also true that you can easily lose money if you don’t know what you’re doing. One example of this is long-term Amazon FBA fees that might be eating away at your profits.
What Are Long-Term Amazon FBA Fees?
If you’re new to selling with Amazon FBA, you may not know about the fees they charge for long-term storage.
Twice a year, Amazon takes inventory of their FBA warehouses and charges sellers $11.25 per cubic foot for every product that has been stored for 6 to 12 months. Anything that Amazon has stored for longer than 12 months costs the seller $22.50 per cubic foot.
These assessments are carried out on February 15th and August 15th of every year. If you’re curious about which products you own that may be subject to charges, check the Inventory Health reports. Affected inventory is also listed in the Recommended Removals report six weeks before the assessment is done.
Stay Knowledgeable About Your Inventory
When you’re just starting out, you may have an easy time keeping a mental spreadsheet of the items you’re selling through Amazon FBA. However, it probably won’t be long before that changes and you’re listing dozens or even hundreds of items at any given time.
When that happens, Amazon FBA fees for long-term storage can take you by surprise and pile up quickly. Out of nowhere, your business could all of a sudden be losing you money.
This is why you need to check in regularly and make sure you have a good feel for your inventory. The Inventory Health report we mentioned earlier is great for this.
Take Smaller Losses
Sometimes, there’s nothing you can do but accept the fact that your products just aren’t selling. Maybe you made a bad investment or, perhaps you need to spend a bit more time figuring out the right way to market a product.
Either way, you can always tell Amazon to return or dispose of your items. The latter option would be for situations when you’re truly cutting your losses and won’t attempt to sell certain products in any capacity.
It’s $00.50 to have a standard-sized unit returned and $00.60 for an oversized unit. Disposal is just $00.15 and $00.30 for those items, respectively.
Every now and then, Amazon will even offer a promotion when they’ll remove items for free. This is why it’s important to keep an eye on your inventory at all times. You may have some items you are pretty sure you’re going to have to remove, but you have time before the fees kick in. It would be worth waiting until the last possible day to decide just in case Amazon puts on a promotion.
Don’t let your profits fall because of unnecessary Amazon FBA fees. Managing your inventory and learning from any poor investments will go a long way toward keeping your profit margins intact.