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Thread: Tips to avoid FBA long storage fees
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Permlink Replies: 10 - Pages: 1 - Last Post: 05 Oct, 2016 7:50 AM by: heh!
jewel1973

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Registered: 01 Aug, 12 4:33 AM
Posted on: 07 Jun, 2016 12:58 AM
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My understanding is that FBA storage fees start when inventory has remained unsold for more than 6 months. If I have for example 5 items in FBA warehouse do I need to wait until all 5 have been sold so that the 6 months reset again? In other words when is a good time to replenish inventory that sells but not so fast? I would like to replenish when the time till storage fees start resets back to 0. I just replenished one ASIN when it was down to only 1 item left but I am thinking that I should had better waited until sold out. Please help thank you
Style

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Posted on: 07 Jun, 2016 5:55 AM   in response to: jewel1973 in response to: jewel1973
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Amazon's computer takes care if it; you do not have to wait until you are sold out.

Elegant Jewel & Gift wrote:My understanding is that FBA storage fees start when inventory has remained unsold for more than 6 months. If I have for example 5 items in FBA warehouse do I need to wait until all 5 have been sold so that the 6 months reset again? In other words when is a good time to replenish inventory that sells but not so fast? I would like to replenish when the time till storage fees start resets back to 0. I just replenished one ASIN when it was down to only 1 item left but I am thinking that I should had better waited until sold out. Please help thank youHowever, items incur monthly charges as well as the long term penalty, so it is better to only send up what you expect to sell in a month. However, jewelry items are small, if that's what you're seling so that isn't so serious.

I usually restock when I'm down to one or two unless it's a real fast seller.
Scotty@SellerSu...

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Registered: 17 Sep, 14 10:35 PM
Posted on: 07 Jun, 2016 8:56 AM   in response to: jewel1973 in response to: jewel1973
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Hi there, Elegant Jewel & Gift.

Thanks for reaching out to Seller Forums with a great question!

As mentioned, FBA accounts for inventory on a FIFO basis across our entire fulfillment network. In essence, this means that, for the purpose of determining how long inventory has been in our fulfillment centers, we will account for a sale or removal of a unit by deducting it from the inventory that has been in our fulfillment network the longest, regardless of which physical unit was actually shipped or removed.

You can read up on more information on how FBA's Long-Term Storage Fees are applied, and when, at our FBA Long-Term Storage help page.

Since Amazon has set "Inventory Cleanup" dates of August 15 th and February 15 th, keeping these dates in mind can help you in determining when to restock slow-moving inventory.

Rather than charging Long-Term Storage Fees on a rolling basis, we simply calculate the inventory quantities that have been in our fulfillment network for more than 6 months or more than a year on the Cleanup dates. With that said, you could send inventory units to Amazon 5 months prior to an Inventory Cleanup date - we'll use the August 15th cleanup date as an example. Should none of those units sell, they will not accrue LTSFs unless they remain in our fulfillment network until the following Cleanup date of February 15 th, as they were only 5 months old at the time of the August cleanup.

I hope this additional information helps and I want to wish you an excellent day ahead!

-Scotty
FT Sales

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Registered: 10 Mar, 14 7:54 PM
Posted on: 07 Jun, 2016 2:08 PM   in response to: jewel1973 in response to: jewel1973
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My tip for avoiding long term storage fees is to never have more than 1 (2 at most if a fast seller) in stock. Has worked well for me the last 1 1/2 years.
Shelf_Cleaning_...

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Posted on: 08 Jun, 2016 11:27 AM   in response to: jewel1973 in response to: jewel1973
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Fees are assessed February 15 and August 15.

Ship stuff in Feb 16 and August 16.

You have to learn what the sales ranks tell you in a specific category.

10,000 in one could be great, while terrible in another.
MycoBloom

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Registered: 30 Mar, 16 7:02 PM
Posted on: 26 Jul, 2016 8:26 AM   in response to: Scotty@SellerSu... in response to: Scotty@SellerSu...
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Scott,
Thanks for trying to help. However I am still confused. Working with this example here...
units were sent in during march
units were 5 months old during August inventory
units are 6-11.9 months old February 15th-first flagged for LT storage
units accrue long term storage fees beginning February 15th.

Based on the excerpt on the fee page:

"The Long-Term Storage Fee is only charged on two dates each year: August 15 and February 15. For example, if inventory units will have been in our fulfillment centers for six months as of February 15, you have nearly six months, until August 15, to put in a removal request or sell the units before they are charged the Long-Term Storage Fee. All inventory is accounted for on a first-in-first-out (FIFO) basis."

From the language above, I would assume that at Feb 15th those units are flagged as being 6 months old and that one would have until August 15 2017 until the the long term storage of 11.50/sq foot applies to those units. Is this not correct?

Boardgames4Us

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Registered: 17 Mar, 12 1:16 AM
Posted on: 26 Jul, 2016 9:03 AM   in response to: MycoBloom in response to: MycoBloom
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MycoBloom wrote:
Scott,
Thanks for trying to help. However I am still confused. Working with this example here...
units were sent in during march
units were 5 months old during August inventory
units are 6-11.9 months old February 15th-first flagged for LT storage
units accrue long term storage fees beginning February 15th.

Based on the excerpt on the fee page:

"The Long-Term Storage Fee is only charged on two dates each year: August 15 and February 15. For example, if inventory units will have been in our fulfillment centers for six months as of February 15, you have nearly six months, until August 15, to put in a removal request or sell the units before they are charged the Long-Term Storage Fee. All inventory is accounted for on a first-in-first-out (FIFO) basis."

Using your example, unsold items (except for 1 unit per SKU) will be charged long term storage on Feb 15 at a rate of $11.25/cuft for items that were received before Aug 15.

This is not an accrual. It is a charge. It happens based on what is in stock and unsold at that time. Monthly fees continue to be charge in addition. If the items continue to remain unsold till the following August, the rate doubles to $22.50/cuft.

From the language above, I would assume that at Feb 15th those units are flagged as being 6 months old and that one would have until August 15 2017 until the the long term storage of 11.50/sq foot applies to those units. Is this not correct?
No. Feb 15, you pay the $11.25/cuft rate. On the following Aug 15, you pay the $22.50/cuft rate.

It is best to remove items that will be charged the fee and reconsider selling them at all. If items are unsold for more than 6 months, they may not be suitable for FBA. It is best to only choose items that will be sold. It is also better to reduce the amount that you plan to sell. Start off small, watch the volume and increase your stock based on the demand to avoid running out of stock. Keeping many years of inventory will cost a lot.

Dave
heh!

Posts: 179
Registered: 20 Jun, 14 1:00 AM
Posted on: 29 Sep, 2016 10:16 AM   in response to: Boardgames4Us in response to: Boardgames4Us
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Can I place my removal order on Feb. 14 to avoid the LTSF? Or do I need to place the order in advance?
Boardgames4Us

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Registered: 17 Mar, 12 1:16 AM
Posted on: 29 Sep, 2016 10:23 AM   in response to: heh! in response to: heh!
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heh! wrote:
Can I place my removal order on Feb. 14 to avoid the LTSF? Or do I need to place the order in advance?
Your removal order needs to be created on or before Feb 14. I suggest that there is no value to you by waiting till the last minute.

Also be aware that during that time, there are many very large removal orders going on. I had a larger one and am still waiting for all of the items to be shipped. At this point 10% is still outstanding since August.

It can take months. If you have any plans for the items, you should consider doing it earlier.

Dave
Aerides

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Registered: 02 Oct, 15 6:39 PM
Posted on: 29 Sep, 2016 3:34 PM   in response to: Boardgames4Us in response to: Boardgames4Us
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Lots of people probably have similar ideas about "ideal" removal order dates as well - i.e. Feb 14 probably sees a high input of requests You want your items back in less than a month? Ordering in early Feb is peak so go for January or a bit sooner. I generally find any removal has taken 3 weeks to be returned - the actual shipping method is the slowest cheapest UPS (like 10 days) and that's after the FC's take their time pulling and packing. '

Removals are probably the LAST most important task for the FC's.
heh!

Posts: 179
Registered: 20 Jun, 14 1:00 AM
Posted on: 05 Oct, 2016 7:50 AM   in response to: Aerides in response to: Aerides
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Right. But what I was hoping was that the products will sell at peak holiday season. That's why I would wait.