The consensus among online sellers is that Amazon is a good place to sell. The company’s policies and payment have impressed a lot of sellers. Things appear to be transparent for most part.
However, those sellers who use the company’s Fulfilment By Amazon (FBA) service might have noticed an extra charge on some of their products stored with the marketplace. In this blog, Browntape tells you what the Amazon FBA charge is all about and how you can avoid it.
The Amazon FBA long-term charge
It’s quite simple, if you store a consignment with the company for more than six months, you will be charged for it.
To quote the help page, “Additional charges for inventory stored in the Amazon fulfilment centres for more than six months will be applicable in accordance with company policies.”
Reminds one of the penalty that banks charge if a customer doesn’t maintain the minimum amount balance in an account!
Amazon carries out a stock taking of its warehouses twice a year – 15th February and 15th August, and any product found to be on the shelves older than six months will be charged the fee. However, experienced sellers say that the company is not draconian about this rule, and can be soft with it. Single units are not charged.
You can consider the long-term charge as a blessing in disguise, as it helps you identify the items that are slow moving and take suitable action on them.
How can you avoid the long-term Amazon FBA charge?
Here are some things that you can do to avoid this unnecessary expense:
A. Periodically take stock of your products
Every quarter or twice a year review the items in your inventory and identify the slow-moving products. Match your stock-taking dates slightly before 15th February and 15th August. See what you can do to promote them. You could give a discount, give them out free with another product, and encourage reviews, ratings and blogs to push the laggards.
B. Send your stock just after the inventory dates
This suggestion comes from one of Amazon’s seller support team. The company calculates whether a product will come under the long-term window only based on the time it has spent on the shelves. Thus, even if the product has been there for five months, it is excused from the fees.
To quote the seller support, “You could send inventory units to Amazon 5 months prior to an Inventory Clean-up date. Should none of those units sell, they will not accrue LTSFs unless they remain in our fulfilment network until the following Clean-up date.”
C. Send products after careful consideration
Observe the products that are popular and that sell quickly and send these products to the Amazon warehouse. If you randomly send a few products from all your merchandise, then the chances of them getting stuck on the shelves are high. Prevent the situation by choosing products that you think will sell, and that generally enjoy more popularity. Also, remember to send a reasonable quantity of a product. If you send units of a product in bulk, it may not get sold.
D. Create a sponsored post on Amazon
You can opt for paid ads on Amazon to direct attention on items that you feel are not getting any. This can help push products to an extent.
E. Simply clear the shelves
If you feel that the product is extremely slow moving, direct Amazon to send them back. As a businessperson, you will need to make some tough choices. Some items may not enjoy the same kind of popularity that others do. You can always find other avenues to sell them (like offline, if you have a physical store). Direct your attention towards promoting the fast-moving goods. Work on converting products that enjoy average popularity into more popular ones.
Your products will not be removed immediately from the shelves when you send a removal request, so customers can order them for up to two weeks after you send the request.
We hope the above tips will give you an idea on FBA. If you need any help with your ecommerce needs, contact us here. We are Browntape, India’s largest ecommerce service provider, and
