Amazon Aged Inventory Surcharge Fee for Sellers

Amazon Aged Inventory Surcharge Fee

What is the Amazon Aged Inventory Surcharge Fee for Sellers?

Amazon’s Aged Inventory Surcharge Fee (ex long-term storage fee) is a cost charged to sellers with inventory stored for more than 181 days.

Between 181 and 270 days, there are some exceptions for items listed under clothing, shoes, bags, jewelry, and watches.

This fee is assessed in addition to the monthly inventory storage fees, with increased granularity and magnitude for inventory stored between 271 and 365 days.

The last Inventory fee change was on April 15, 2023, when Amazon increased the price and introduced new price tires between 181-270 days.

The aged inventory surcharge ensures efficient use of Amazon’s fulfillment network capacity. Penalizing stagnant inventory encourages sellers to optimize their storage levels. The fee calculation is based on a first-in, first-out approach across the entire network, considering the sale and removal of units.

Here’s a breakdown of the surcharge fee structure:

  • New tiers apply for inventory aged 181 to 270 days, except for items under clothing, shoes, bags, jewelry, and watches.
  • For inventory aged 271 to 365 days, increased granularity and magnitude for the surcharge apply.
  • For inventory aged over 365 days, the aged inventory surcharge continues to apply.

Fee Assessment Timeline:

Amazon takes an inventory snapshot on the 15th of each month and assesses aged inventory surcharges accordingly. Aged inventory surcharge is charged between the 18th and 22nd day of the month.

Note that the charges apply in conjunction with monthly inventory storage fees.

Implications for Sellers:

Managing your inventory to minimize aged inventory surcharges proactively is crucial as a seller. Consistently reviewing your stock levels, adjusting your pricing strategies, or using Amazon’s inventory removal tools can be beneficial in reducing these fees.

In summary, Amazon’s Aged Inventory Surcharge Fee aims to optimize storage utilization by encouraging sellers to sell or remove older inventory promptly. It’s essential to remain attentive to your storage levels and make timely adjustments to avoid encountering additional costs related to inventory age.

How Much is the Aged Inventory Surcharge Fee?

Amazon’s Aged Inventory Surcharge is a fee applied to inventory stored in Amazon’s Fulfillment Centers for an extended period. This fee depends on how long your items have been in storage and aims to maintain an efficient inventory management system. Understanding the specifics of this fee can help you manage your inventory and costs more effectively.

After April 15, 2023, the aged inventory surcharge will vary based on how long items have been in storage and the item category:

Charged on181-210 days211-240 days241-270 days271-300 days301-330 days331-365 days365 days or more
15th of every month$0.50 / cubic foot *$1.00 / cubic foot *$1.50 / cubic foot *$3.80 / cubic foot$4.00 / cubic foot$4.20 / cubic foot$6.90 / cubic foot or $0.15 per unit, whichever is greater

*Note: Exclusions apply to items listed under clothing, shoes, bags, jewelry, and watches from 181 to 270 days.

Frequent inventory assessments are conducted between the 18th and 22nd day of the month. This review helps determine which products are subject to the aged inventory surcharge. To better understand your inventory subject to fees, you can use the FBA Inventory tool to see which ASINs have been in fulfillment centers for more than 181 days and anticipate the related costs by the next inventory cleanup date.

In summary, to maintain better control over your FBA fees and profits, keeping track of your inventory’s age at Amazon fulfillment centers is crucial. By using the FBA Inventory tool and adapting your strategy accordingly, you can minimize the impact of the aged inventory surcharge on your business’s bottom line.

Example of the Aged Inventory Surcharge Fee

Let’s look at two example product categories to understand the aged inventory surcharge fee calculation for sellers using Amazon FBA.

Toys example: a toy with dimensions 7 x 7 x 4 inches

Toy: 7 x 7 x 4 inchesStorage durationApplicable cubic-foot feeApplicable per-unit feeBilled aged inventory surcharge (the greater of the two fees)
1 unit181 days7*7*4 = 196

196 cubic inch = 0.113426 cubic foot

0.113426 * 0.05 = 0,056713
2 units290 days7*7*4 * 2 unit = 196 * 2 unit = 392

cubic inch = 0.226852 cubic foot

0.226852 * $3.80 = 0.8620376

By monitoring the storage duration of your items in Amazon fulfillment centers and considering both cubic-foot and per-unit fees, you can actively manage your inventory and avoid excessive aged inventory surcharge fees.

Other Amazon FBA Fees

Understanding Amazon FBA Storage Fees

When selling on Amazon through the Fulfillment by Amazon (FBA) program, you must be aware of several fees aside from the aged inventory surcharge. These fees include referral fees, monthly storage fees, and disposal fees.

Referral Fees Amazon charges a referral fee for each item sold based on the item’s category. This fee is calculated as a percentage of the total sale price, including shipping and gift wrapping fees. For example, referral fees for shoes and jewelry range from 15-20%, while those for watches are usually around 16%.

Monthly Storage Fees These fees are calculated based on the daily average volume (measured in cubic feet) of your inventory stored in Amazon warehouses. The monthly storage fees vary depending on the size of your items and whether you have oversized items. These fees change during peak (October-December) and off-peak storage periods, with higher prices charged during peak periods.

Shipping Weight and Dimensional Weight Amazon calculates the weight and size of your orders using the shipping weight and dimensional weight. Dimensional weight takes into account the package dimensions and is measured in pounds. Amazon operates the excellent value between the two to determine your FBA fees.

Dangerous Goods and Packaging Items classified as dangerous goods require special handling and storage, which leads to higher FBA fees. Also, you need to consider the cost of packaging, as it adds weight and size to the items, impacting your fees.

Disposal and Removal Fees If you want to remove your inventory from Amazon warehouses or dispose of it, you’ll incur removal or disposal fees. These fees depend on the size and weight of your items and are charged per unit.

Fulfillment and Multi-Channel Fulfillment Fees Amazon FBA fees cover the cost of two-day shipping for Prime customers and standard shipping for non-Prime customers. The product size tiers and unit weight determine your fulfillment fees. Additionally, you’ll incur separate fees if you’re using multi-channel fulfillment for orders from other platforms.

Using FBA Calculator Helps with Fee Calculations

Understanding the Amazon Aged Inventory Surcharge Fee is crucial for sellers, but it’s just one part of managing costs. Other fees can be calculated using the MarketGap FBA Calculator and the MarketGap FBA Calculator extension.

  • MarketGap FBA Calculator:
    • Calculates detailed costs, including pick and pack fees, shipping, and referral fees.
    • Provides insights on product dimensions (height, length, weight) and their impact on the budget.
    • Assists in forecasting sales, net profit, and profit margins across different marketplaces.
  • MarketGap FBA Calculator extension for Chrome:
    • Real-time calculations within your browser for quick assessments of costs and profits.
    • Tracks product costs, revenues, and margins for platforms like Amazon, Shopify, and eBay.
    • Integrates with Google for easy lookup of ASIN, EAN, and keyword data.

These tools are invaluable for sellers aiming to lower fees and optimize their strategic marketing efforts. They ensure accurate cost calculations and maximize profit margins. The MarketGap FBA Calculators provide a comprehensive view of finances, helping sellers maintain a healthy ROI and enhance their customer service through informed pricing and inventory management.

Understanding these Amazon FBA fees helps you better manage your inventory levels and costs. By monitoring your inventory reports and planning your shipments, you can optimize your Amazon business and keep your products moving efficiently through the warehouses.

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