Let’s talk about Amazon FBA Fees. In this video by Amazon Seller University, you will learn all about the common fees associated with Fulfillment by Amazon. From fulfillment fees to monthly storage fees, long-term storage fees, removal and disposal order fees, and FBA liquidation fees, we’ve got you covered. It’s important to understand these fees to make the most of the FBA service and grow your business.
Welcome to the overview of FBA fees. This training will cover everything from fulfillment fees to monthly inventory storage fees, long-term storage fees, removal order fees, and FBA liquidations fees. With Amazon FBA, you can reach more customers, provide one and two-day delivery options, and boost your business. Understanding and managing these fees is crucial for your success on the Amazon platform.
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Fulfillment Fees
When you use Amazon’s FBA service, you’ll encounter fulfillment fees. These fees are charged per unit and cover costs related to picking, packing, and shipping items to customers. The amount you pay in fulfillment fees varies based on the size and weight of the items you are selling. Fulfillment fees are only charged when a customer order is shipped, making them directly tied to your actual sales.
Monthly Inventory Storage Fees
As an FBA seller, you need to consider monthly inventory storage fees which are based on the amount of space your inventory occupies in Amazon’s fulfillment centers. These fees can fluctuate based on factors such as daily average volume, the size tier of your products, and the time of year. It’s essential to keep track of your inventory levels to avoid unnecessary charges related to storage fees.
Long-Term Storage Fees
Long-term storage fees are applied when your inventory is stored in Amazon’s fulfillment centers for more than 365 days. These fees are calculated on a first-in, first-out basis, meaning older inventory is charged before newer inventory. Long-term storage fees are assessed with a monthly inventory snapshot and added to your overall storage costs.
Removal and Disposal Order Fees
In cases where you have excess or unsellable inventory in Amazon’s warehouses, you may need to request removal or disposal orders. These orders incur a per-item fee based on the shipping weight of the item. It’s important to note that processing removal or disposal orders may take some time, with wait times of up to 30 business days possible.
FBA Liquidations Fees
For items that are excess or customer-returned, FBA offers the option to liquidate them through a wholesale liquidator. This can help you recover a portion of your costs and avoid ongoing storage fees. FBA liquidations fees include a per-item processing fee and a referral fee based on the gross recovery value of the items being liquidated.
Inventory Age Calculation
Amazon’s FBA system operates on a first-in, first-out basis when it comes to inventory. This means that when items are sold or removed, they are deducted from the oldest inventory in the system, promoting turnover of goods and efficient inventory management across Amazon’s fulfillment network.
Monthly Fee Charges
Keeping track of monthly fee charges is essential for FBA sellers. Inventory storage fees are typically billed between the 7th and 15th of each month, while long-term storage fees are added to your bill between the 18th and 22nd. Being aware of these billing cycles can help you manage your financial obligations effectively.
Removal and Disposal Options
Having the ability to create removal or disposal orders gives FBA sellers flexibility in managing their inventory. By opting for removal orders, you can have items returned to you or disposed of by Amazon. Fees for these services are based on the shipping weight of the items being processed, and it’s crucial to understand these costs upfront.
Liquidation Processing Time
When choosing to liquidate excess inventory through FBA, sellers should be prepared for processing times. While liquidation orders typically take about 14 business days to complete, this duration may extend up to 30 business days during peak periods. Planning for these timelines can help streamline your inventory management process.
Net Recovery Value Payment
Upon liquidating inventory through FBA, sellers are paid the net recovery value of their items within 90 days of the liquidation order being submitted. Deductions from this payment include processing fees, referral fees, and calculations based on the average selling price of the items. Understanding these deductions is crucial for managing cash flow and assessing the profitability of liquidation options. If you’re feeling overwhelmed by the complexities of selling on Amazon, know that you don’t have to navigate it alone. Barrel Aged E-Commerce specializes in resolving the toughest Amazon challenges—from suppressed listings to PPC optimization and everything in between. Their team of experts are there to help you cut through the chaos, streamline your operations, and maximize your sales. Reach out to them today for personalized guidance and actionable solutions tailored to your business. Let’s make Amazon work for you! *Barrel Aged E-Commerce is a sponsor of this blog.