It has become very clear that a challenge for Amazon is navigating inventory capacity and maximizing warehouse space at their fulfillment centers. The e-commerce giant has stated, “We want to continue to allow the most efficiently managed inventory to flow through the network, while limiting less efficiently managed inventory.”
In March, Amazon announced that beginning in mid-September, long-term storage fees will be assessed on a monthly basis instead of a semi-annual basis. Additionally, beginning in mid-August, FBA sellers will experience a minimum charge of $0.50 per unit per month for items in fulfillment centers for 365 days or more.
Amazon also established a storage limits policy, wherein the Inventory Performance Index is going to be utilized to measure sellers’ adeptness with inventory management performance. Although the metric was introduced last fall, it is going to be used beginning in July to limit storage access for sellers who have an index below 350. Sellers who maintain an index score of 350 or greater will have unlimited storage access for standard and oversize items (monthly storage fees and long-term storage fees will still apply).
In continuing on in the brigade to establish more FBA storage space, Amazon announced that, for a limited time, they will waive FBA sellers’ removal fees for any removal order that is submitted for inventory in U.S. fulfillment centers. In order for Professional sellers to take advantage of this opportunity, they should go to the Manage Excess Inventory tab in Seller Central and choose “Create removal order” from the menu next to any FBA item currently in inventory.
If sellers choose to remove inventory during this promotion, they will not be able to send Amazon fulfillment centers additional units of the ASINs they remove until one of the below requirements is met:
- August 1, 2018 arrives, when these restrictions will be removed
- Their inventory level for the removed ASINs falls below Amazon’s sales projection for the next eight weeks based on the seller’s average sales rate for the removed ASINs during the previous 90 days.
Typically, removal fees are charged per item removed and the removal orders are filled within two weeks. Removal order fees vary depending on if the item is standard size or oversized and whether the seller wants Amazon to dispose of the inventory, return it back to them, or liquidate it.
If you have end-of-life inventory that you are looking to work through, taking advantage of this promotion and removing it for free will be beneficial to not only your portfolio’s health but your bottom line.