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Pro Tips for Managing Your Amazon FBA Inventory

  • Aug 6, 2015 | Marcus DeHart

As I wrote in my previous post, 4 Ways FBA Sellers Can Avoid Amazon's Long-Term Storage Fees, the deadline for jettisoning inventory you no longer want to pay to store in Amazon’s fulfillment centers is coming up.

On August 15th, long-term storage fees will be levied for all of your items that have been in the facility for longer than six months.

To help you decide what to keep and what to remove, let’s review how you can identify your “stale” inventory and look over how much you’ll pay for what you keep in stock.

Recommended Removals

The easiest place to look is in your Recommended Removals report. This report is designed specifically to help you identify units in Amazon's fulfillment centers that might be charged the long-term storage fee if not removed or sold before the next Inventory Cleanup. The report splits your inventory into three groups, indicating the number of sellable units between 271 and 365 days old, between 271 and 365 days old, and more than 365 days old.

You can do the math based on these fields or simply skip to the Recommended Removal Quantity (Sellable) field, which is Amazon’s estimation of the number of units that will be assessed the fee. Keep in mind that this number can change as units sell, so you can either play it safe and remove them all or run your report as close to August 15 as possible to get the most accurate number.

Note that you won't be charged the fee for any of your inventory that has been damaged or lost at a fulfillment center. Also, Amazon doesn’t actually time-stamp every unit that is stored in their facilities. They calculate unit age based on the assumption that the first unit in will be the first unit out (FIFO). But in reality, they fulfill inventory from whichever fulfillment center is closest to the buyer. You also have the option of leaving one unit for each ASIN in the fulfillment center to enable you to continue offering your unique selection of products.

Cost Accounting

How much could long-term storage cost? For inventory that is between six and 12 months old, you will be paying a volume rate of $11.25 per cubic foot. That’s for the volume of all units put together, not each unit.

So if you have a dozen books that make up a cubic foot together, your 6-12 month fee for those books will be $11.25. If those same books have been in the fulfillment centers for 265 days or longer, the rate doubles to $22.50 per cubic foot.

With this info in mind, take a look at your options for avoiding long-term storage fees. Just remember to make your decision by August 15th.

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Avalara Author
Marcus DeHart
Avalara Author Marcus DeHart