The Monthly Roundup: What FBA sellers need to know

The Monthly Roundup: What FBA sellers need to know

Every month, while you focus on running and growing your business, we stay on top of the news and issues important to FBA sellers. (And we don’t limit our coverage to all things sales tax, although we’ve got you covered there, too.)

In our new monthly roundup, you’ll find news you can use — from popular topics in the Amazon forums to studies and reports. Read on for a few items we found interesting over the last several weeks.

New inventory storage limits

Amazon will begin to implement new inventory storage limits for certain sellers beginning July 1, 2018. These new limits apply only to professional seller accounts, and can change quarterly based on your Inventory Performance Index. For example, if your Inventory Performance Index is 350 or greater, you’ll have unlimited storage for standard-size, oversize, apparel, and footwear items in the next quarter. If it’s below 350 less than six weeks before the end of a quarter, you’ll be notified of your potential storage limits. Learn more here.

Storage fee changes

In addition to storage limits, Amazon is also adjusting fees in 2018. As you’re no doubt aware, an increase of $0.05 per cubic foot for monthly inventory storage fees took effect April 1 for standard-size and oversize items. Upcoming changes include:

  • a minimum charge of $0.50 per unit per month for items stored in fulfillment centers for 365 days or more, taking effect on August 15

  • revisions to long-term storage fees, which will also  switch from semi-annual assessment dates to monthly on September 15

Click here for more detail.

More than 20,000 sellers hit $1 million+ in 2017

In its first-ever Small Business Impact Report, released May 3, Amazon announced that more than 20,000 small- and medium-sized sellers had sales of $1 million or more last year. The company also estimated that businesses selling on Amazon have created 900,000 jobs across the U.S. Additionally, approximately 140,000 sellers surpassed the $100,000 mark for 2017 sales. Other interesting facts:

  • There are more than 1 million U.S.-based sellers on Amazon.

  • Half of items purchased on Amazon come from small- and medium-sized businesses.

  • The Amazon Lending Program provided more than $1 billion in loans to these businesses.

Taking a deeper look at FBA sellers

A recent survey by Jungle Scout illuminated some interesting detail about who FBA sellers are, their biggest challenges, and some of their business strategies. A few things that stood out to us:

  • Seller characteristics. The average FBA seller is a male between 25 and 54 years old. More than 90 percent sell in the U.S. market, and over half of those surveyed sell private-label products.

  • Challenges. The biggest challenges reported by sellers include product research and sourcing, along with getting reviews on their products.

  • Opportunities. Sellers in the survey reported that their profits increase an average of 40 percent when they expand into a second marketplace — and those who sell in three or more see an additional boost of more than 20 percent. Also, sellers with their own website realize twice the profit of sellers who don’t have their own site.

Be sure to check back each month for a fresh, new roundup, and email us at trustfile@avalara.com if there’s something you think we should include.

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