Amazon increased their 4th quarter monthly storage fees and caught quite a few sellers by surprise, myself included.
On the 5th, I noticed that Fetcher was reporting a massive negative profit margin on the month, and the graph dipped heavily into the negative.
I went to the FBA subreddit and felt a bit of relief that other sellers had experienced similar massive charges.
Monthly inventory fees are a necessary part of this business model that sellers just have to accept, but Amazon is steadily increasing the fees over time, with this most recent Q4 increase being the most noteworthy.
FBA Storage Fees in 2018
Amazon increased their inventory fees in 2018, and you can expect that trend to continue moving forward.
As of writing this, here's what I've spent housing my FBA inventory in 2018:
- Jan: $928.27
- Feb: $635.80
- Mar: $40.59
- Apr: $720.94
- May: $589.20
- Jun: $762.88
- Jul: $724.50
- Aug: $816.00
- Sept: $42.39
- Oct: $1,058.94
- Nov: $12,265.05
- Dec: $6,861.90
As a reminder, storage fees are relative to the amount of goods you're storing in fulfillment centers, and billed per cubic foot.
Find more about how to choose a nightstand here.
You can find the official resource on Amazon's inventory storage fees page.
As of writing this, this is what the current 2018 FBA storage fees look like:
Q4 is particularly brutal, as fees increased 3.6x!
Standard size units were reasonably priced: January - September: $0.69 per cubic foot | October - December: $2.40 per cubic foot.
Unfortunately, there's not much you and I can do about it.
Amazon has been pushing more sellers to consider Seller Fulfilled Prime, which would allow sellers to consider using 3PL services that can meet the strict requirements... but at the end of the day, most of us will continue to lean on Amazon because we're creatures of habit.
Also, in my personal experience 3PL's have not been able to offer me very competitive rates compared to Amazon, so it wasn't worth the hassle of switching.
How To Calculate Cubic Feet From Inches
If you want to project your inventory fees, you'll need to calculate how much cubic feet it occupies.
Amazon's inventory fees page offers a simple explanation of how to do it:
- Multiply length x width x height in inches to get the volume.
- Divide the volume by 12 cubic inches (12 x 12 x 12 inches = 1,728).
For example, a unit measuring 47 x 12 x 10 inches divided by 1,728 = 3.3 cubic feet.
I Paid Over $11,000 In Fees In November
Check out my Sales & Profit view from Fetcher in November:
- November 5th: Over $6,000 in storage fees
- November 30th: Over $7,000 in storage fees
They're absolutely brutal fees, so do your best to accurately project your inventory for the holidays (without keeping too much additional extra inventory).
One great way of projecting how much inventory you will need in October, November, & December is by using the following:
- Fetcher is a (paid) website that will show you your daily sales based on recent sales volume & track your sales year over year (you can drill down into day by day in their reports).
- Keepa is a (free) chrome extension that will show you product data such as BSR over time within the listing page, for most products on Amazon
Selling on Amazon FBA is a great way to make passive income, but we need to remember to pay extra attention in the months leading up to the holiday season to maximize profits and reduce monthly storage fees!
