Amazon Fulfillment Center

Sellers who use Fulfillment By Amazon (FBA) store their inventory at Amazon’s fulfillment centers. These facilities are the secure locations where Amazon coordinates the selection, packing, and shipping of buyers’ orders. Many of these processes are automated to ensure careful and timely processing that expedites the fulfillment of the order.

Protection Ensured by Fulfillment Centers

The processing done at the fulfillment centers is completed in an environment that has the following modern features:

• 24-hour security.
• Secure cage protection of merchandise.
• Automated, wireless, networked tracking of all orders processed on site.

Costs of Using a Fulfillment Center

Amazon charges monthly inventory fees for storage of merchandise at the fulfillment centers, as well as long-term semi-annual storage fees.

Monthly Inventory Storage Fees

Monthly fees are set according to the season, and assessed according to the daily average volume of the seller’s merchandise, as measured in cubic feet when packed and ready for shipping. They are reported on each month’s Settlement Report, and vary, depending on the time of year, as follows:

• January – September: $0.48/cubic foot
• October – December: $0.64/cubic foot

To calculate cubit feet:

1. Multiply length x width x height (in inches).
2. Divide that number by 12 (= cubic inches).
3. The resulting number is in cubic feet.

Amazon also provides sellers with a calculator for this calculation on its site. The minimum charge for storage is $0.01 per item, and Amazon measures the inventory precisely, to the hundredth of an inch, and then assesses fees by tenth of an inch per item.

Note: Amazon reserves the right to measure the cubic feet and weight of all packages, and if Amazon’s measurements conflict with the seller’s measurements, Amazon’s measurements are considered definitive.

Long-Term Storage Fees

The inventory stored in Amazon’s fulfillment centers is evaluated every February 15 and August 15 to determine how long it has been kept in storage. Units that remain in the fulfillment centers for a year or longer incur a semi-annual charge of $22.50/cubic foot, in addition to the usual inventory fees.

If the seller uses single units for each ASIN in stock, however, then the semi-annual long-term storage fee is waived, as long as no units for that ASIN have been in the fulfillment center for less than one year.

Note: Amazon alerts sellers to any units that will have remained in the fulfillment centers for a year before the date of evaluation, and the seller may issue a removal order to dispose of the units before the fees are charged.