If you haven’t heard the news yet — or are considering using Amazon FBA (Fulfillment by Amazon) for your long term inventory storage here’s the news from Amazon:
“Effective August 15, 2011:
An annual Long-Term Storage Fee of $45.00 per cubic foot will be applied to any Units that have been stored in an Amazon fulfillment center for one year or longer. The fee is in addition to the regular Inventory Storage Fee and will not be charged if a request has been made to remove or dispose of the Units prior to the fee being charged.
The per Unit price of a removal for Media and Non-Media Units will be reduced from $0.60 plus shipping to $0.50 including shipping. Alternatively, Units can be disposed of for $0.15 per Unit. (The per Unit price of a removal for Oversize Units will be reduced from $3.00 plus shipping to $0.60 including shipping, or $0.30 for them to be disposed.)
Each seller may maintain a single unit of each ASIN they carry without being charged the Long-Term Storage fee.”
So what does that mean to the FBA user? It depends on how and what products you are using Amazon FBA to fulfill.
Amazon still wants those one of a kind, long tail items. If you read the last line of the release Amazon states that Sellers may store one ASIN (or item) at their facility for more than a year without incurring the storage fees. That’s perfect for the book seller who deals in unusual or rare finds — their fees won’t be affected by this change.
However, if you are the type of seller who buys case lots of items in larger quantities and then send them to Amazon for inventory fulfillment — you’ll need to monitor your turn rates a little more closely, especially seasonal items. For example some sellers buy out end of season Christmas items to sell the following year — you probably will want to house them elsewhere until closer to the season and then send them to Amazon. Or, if you import large lots of items, and have been using Amazon to store and ship the items — make sure the inventory turns regularly.
What’s a good inventory turn rate? Of course, it depends on the type of item. You’ll have to look at your historical sell through rates. You may want to compare with others in your niche. That type of information can be obtained from trade groups within your industry. Using their standards and comparing them to your historical sell through can help you to determine if you are in line.