Amazon's FBA warehouse is Amazon's most powerful weapon. It is FBA that allows Amazon to remain the number one e-commerce leader in the United States.
But Amazon FBA is also famous for charging various kinds of money under various names. The previous long-term storage fee means that if your goods are left in the warehouse for more than 181 days without being sold, they will start charging you money.
In 2024, Amazon FBA has updated the latest fee, which is the low-volume inventory fee. As the name suggests, if the inventory quantity of the product is too low, you will be charged a sum of money!
As soon as this policy was updated, Wall Street investors were very happy because they heard that this would be a huge revenue, but for sellers, it was really bad news. Amazon was taxed tens of millions of dollars.
The official effective period of low-volume inventory fees is 2024.04.01. When explaining low-volume inventory fees, I have to mention Amazon’s two new inventory indicators.
In Amazon's backend, Amazon has added two new inventory indicators, one is the inventory level indicator, and the other is the historical supply days.
To check these two indicators, you can log in to the backend and go to the "Amazon Logistics Inventory" page or download the Amazon inventory report to see these two values.
The following is an explanation of these two values :
Inventory level indicator - mainly a value that helps sellers plan future inventory replenishment. According to the quantity of inventory, it can be divided into the following four states: out of stock, insufficient inventory, healthy or excess.
The above indicators will be updated approximately once a week, but it is important to note that the minimum inventory level does not include products currently on the way to be replenished. The minimum inventory level will only consider the sellable inventory in FBA.
Historical days of supply - This is used to identify which products have been low in inventory in the past and are subject to ultra-low inventory fees.
Did anyone notice this?
The two new indicators released this time are in response to the new low-volume inventory fees. Amazon hopes to use the new indicators to allow sellers to manage their inventory and avoid being charged low-volume inventory fees.
Sellers can avoid paying this fee as long as they maintain inventory for more than four weeks based on product sales.
Low-volume inventory fees will also be waived if:
1 For new professional sales accounts, the fee is waived within 365 days of the first batch of inventory being received;
2 For new parent ASINs, the fee will be waived within 180 days after the first batch of inventory is received. Sellers need to join the Amazon Logistics New Product Arrival Discount Program to enjoy this benefit;
3 For products that use Amazon’s automatic replenishment (using AWD third-party warehouse), this fee is waived.
For a detailed explanation of AWD, please refer to the following two articles
Amazon AWD V.S. What is the difference between third-party overseas warehouses? How to choose?
What is the Amazon AWD warehouse? Replenishment tutorial Step by Step
