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[Disclaimer: Amazon FBA fees are subject to change. The rates listed in this article reflect current pricing at the time of writing, but you should regularly check Amazon Seller Central for the most up-to-date fee structures.]
Storing inventory with Amazon FBA (fulfillment by Amazon) is crazy convenient, but those fees can take a serious bite out of your profits if you aren’t careful.
Do you know exactly how much you’re paying to store your products? Understanding Amazon FBA storage fees could save you thousands in unnecessary costs.
In this simplified guide, you’ll learn everything you need to know to calculate, forecast, and optimize your FBA storage expenses. Let’s dive in and gain control over one of the biggest line items impacting your bottom line!
Table of Contents
TL;DR - How Much Are Amazon Storage Fees?
Before we delve into the nitty-gritty details, let’s quickly summarize the main storage fees you might encounter as an Amazon FBA seller:
- Monthly Inventory Storage Fees: Charged based on the daily average volume (in cubic feet) your inventory occupies in Amazon’s fulfillment centers. Rates vary from $0.78 – $4.28 per cubic foot depending on product size and time of year (peak vs. off-peak).
- Aged Inventory Surcharge (Long-Term Storage Fees): An additional fee charged for products stored in Amazon’s warehouses for 180 days or more. The fee is $0.50 – $6.90 per cubic foot, depending on the age of the inventory.
We’ll provide a detailed breakdown of these fees shortly, but first, sign up for an audit review of your Amazon Seller account to uncover any discrepancies that may have led to excess fees.
This exclusive FBA audit leverages an API connection and advanced technology to identify reimbursement opportunities you may have missed when reviewing manually.
The best part is the first $400 we recover for you is free! This risk-free review could help you maximize reimbursements and profits!
What Are Amazon FBA Fees?
Amazon charges various fees for their Fulfillment by Amazon (FBA) service, which handles storage, picking, packing, shipping, customer service, and seller product returns.
The main components of Amazon FBA fees include:
- FBA storage fees – For storing inventory in Amazon’s warehouses
- FBA fulfillment fees – For picking, packing, and shipping orders
- FBA per order fees – Fixed charges per order processed
- FBA referral fees – Percentage of each item’s sales price
Storage fees can be a significant expense, so understanding how they work is critical for managing FBA costs. Let’s look at the different types of storage fees next.
Types of Amazon Storage Fees
There are two primary types of FBA storage fees:
1. Amazon FBA Monthly Storage Fees
Amazon charges a monthly storage fee for inventory stored in their fulfillment centers. This covers the space your products occupy.
Key details:
- Based on product size and time of year
- Size tiers: Small standard, large standard, oversize
- Size tiers: Small standard, large standard, oversize
- Charged monthly
- Two rate periods:
- January – September: Off-peak rates
- October – December: Peak rates
- Rates also depend on the storage utilization ratio:
- Ratio = Average daily inventory volume / Average daily shipped volume over the past 13 weeks (You can check the latest ratio on your FBA Dashboard)
- A higher ratio leads to higher rates
- Reports: Monthly Storage Fee Report
Here’s a breakdown of the current monthly storage fees:
Off-Peak Season (January – September)
Storage Utilization Ratio | Standard-Size | Oversize |
Below 22 weeks | $0.78 per cubic foot | $0.56 per cubic foot |
22 – 28 weeks | $1.22 per cubic foot (Base: $0.78 + Surcharge: $0.44) | $0.79 per cubic foot (Base: $0.56 + Surcharge: $0.23) |
28 – 36 weeks | $1.54 per cubic foot (Base: $0.78 + Surcharge: $0.76) | $1.02 per cubic foot (Base: $0.56 + Surcharge: $0.46) |
36 – 44 weeks | $1.94 per cubic foot (Base: $0.78 + Surcharge: $1.16) | $1.19 per cubic foot (Base: $0.56 + Surcharge: $0.63) |
44 – 52 weeks | $2.36 per cubic foot (Base: $0.78 + Surcharge: $1.58) | $1.32 per cubic foot (Base: $0.56 + Surcharge: $0.76) |
52+ weeks | $2.66 per cubic foot (Base: $0.78 + Surcharge: $1.88) | $1.82 per cubic foot (Base: $0.56 + Surcharge: $1.26) |
Peak Season (October – December)
Storage Utilization Ratio | Standard-Size | Oversize |
Below 22 weeks | $2.40 per cubic foot | $1.40 per cubic foot |
22 – 28 weeks | $2.84 per cubic foot (Base: $2.40 + Surcharge: $0.44) | $1.63 per cubic foot (Base: $1.40 + Surcharge: $0.23) |
28 – 36 weeks | $3.16 per cubic foot (Base: $2.40 + Surcharge: $0.76) | $1.86 per cubic foot (Base: $1.40 + Surcharge: $0.46) |
36 – 44 weeks | $3.56 per cubic foot (Base: $2.40 + Surcharge: $1.16) | $2.03 per cubic foot (Base: $1.40 + Surcharge: $0.63) |
44 – 52 weeks | $3.98 per cubic foot (Base: $2.40 + Surcharge: $1.58) | $2.16 per cubic foot (Base: $1.40 + Surcharge: $0.76) |
52+ weeks | $4.28 per cubic foot (Base: $2.40 + Surcharge: $1.88) | $2.66 per cubic foot (Base: $1.40 + Surcharge: $1.26) |
For example, if you stored 500 average daily units that were standard-size items, each 2 ft x 2 ft x 2 ft (2 cubic feet) in July, and your storage utilization ratio was 18 weeks, your monthly storage fees would be:
Formula: Monthly storage fees = average daily units x volume per unit x applicable rate
- 500 average daily units x 2 cf per unit x $0.78 rate (standard size, Jan-Sept)
= $780 in monthly storage fees
Regularly monitoring inventory levels and turnover is key to optimizing monthly storage costs. We’ll discuss tips for this later.
2. Amazon FBA Long-Term Storage Fees (Aged Inventory Surcharge)
An additional long-term storage fee applies for inventory stored for more than 180 days. This encourages the turnover of inactive stock.
Key details:
- Charged if inventory stored over 180 days
- Based on inventory age and cubic foot volume
- Assessed twice monthly:
- February 15
- August 15
- Reports: Long-Term Storage Fee Charges
Here are the current long-term storage fee rates:
Inventory Age | Fee (per cubic foot) |
181 – 210 days | $0.50 (excluding certain items*) |
211 – 240 days | $1.00 (excluding certain items*) |
241 – 270 days | $1.50 (excluding certain items*) |
271 – 300 days | $5.45 |
301 – 330 days | $5.70 |
331 – 365 days | $5.90 |
365+ days | $6.90 or $0.15 per unit (whichever is greater) |
*Excludes items listed under clothing, shoes, bags, jewelry, and watches categories.
For example, if you had 100 units of a non-apparel product stored for 210 days, with each unit being 1 cubic foot in size, your long-term storage fees would be:
- 100 units x 1 cubic foot per unit = 100 cubic feet
- Fee for 181-210 day inventory = $0.50 per cubic foot
- Total long-term storage fee = 100 cf x $0.50 per cf = $50
These long-term storage fees are in addition to the monthly inventory storage fees, so it’s crucial to manage your inventory proactively to avoid accumulating excessive charges.
It’s important to note that not all sellers are subject to long-term storage fees. Sellers with Individual accounts and new sellers in their first 365 days will only pay the base monthly storage fees.
Also, professional sellers with less than 25 cubic feet of average daily inventory volume will be exempt from long-term storage fees.
How to Calculate Amazon FBA Storage Fees
Calculating your total FBA storage fees takes just a few steps:
- Determine cubic feet per unit: Measure and multiply length x width x height of items when packaged.
- Find total units stored: From your FBA Inventory Report, sum units across SKUs.
- Calculate total cubic feet: Multiply cubic feet per unit by total units.
- Identify monthly rates: Check current monthly storage fee rates based on product size and seasonality.
- Apply rates: Multiply the relevant storage rate by your total cubic feet.
- Factor long-term fees: Add long-term storage fees for any inventory over 180 days based on the fee schedule.
Let’s look at an example:
You have 1,500 units stored in an Amazon fulfillment center. Each unit measures 2 ft x 1 ft x 1 ft, so each unit takes up 2 cubic feet of space.
500 of those units have been in storage for 90 days. The other 1,000 units have been in storage for 200 days.
Here are the calculations:
- Total units: 1,500
- Cubic feet per unit: 2 cf
- Total cubic footage:
- 500 units x 2 cf = 1,000 cf (for units stored 90 days)
- 1,000 units x 2 cf = 2,000 cf (for units stored 200 days)
- Total cubic feet = 1,000 cf + 2,000 cf = 3,000 cubic feet
Let’s assume:
- Average daily inventory cube over 13 weeks: 3,500 cf
- Average daily shipped cube over 13 weeks: 300 cf
Storage utilization ratio calculation:
- (3,500 cf avg daily inventory) / (300 cf avg daily shipped) / 7 days per week
= 16.7 weeks
Since the ratio is below 22 weeks:
- Monthly storage rate (off-peak): $0.78 per cf (standard-size item)
- Monthly storage fees:
- 3,000 cf x $0.78 per cf = $2,340
- Long-term storage rate (181-210 days): $0.50 per cf
- 2,000 cf x $0.50 per cf = $1,000 in long-term fees
- Total Fees = Monthly fees + Long-term fees
- $2,340 + $1,000 = $3,340
So, your total estimated FBA storage fees for the month would be $3,340.
This shows how long-term storage fees can quickly add up, especially for older inventory. Now, let’s look at ways to minimize these costs through strategic inventory management.
How to Minimize Amazon FBA Storage Fees
While storage fees are unavoidable, there are ways to optimize them:
1. Manage In-Stock Levels
Carefully monitor your inventory levels and avoid overstocking products that aren’t selling well. Use Amazon’s Inventory Performance Index (IPI) and Inventory Age Report (under “Inventory Health Report”) to identify slow-moving items and adjust your ordering accordingly.
2. Use the Recommended Removal Report
Amazon’s Recommended Removal Report provides a list of products that the platform recommends you remove from their fulfillment centers to avoid long-term storage fees. Review this report regularly and take action on the suggested items.
3. Evaluate Non-Selling Products
If certain products aren’t selling, try to identify the reasons behind it. Consider adjusting pricing, improving listings, or discontinuing underperforming products altogether.
4. Offer Discounts and Promotions
Running promotions or discounting slow-moving products can help increase sales velocity and reduce the risk of incurring long-term storage fees.
5. Leverage Amazon Outlet
Use Amazon Outlet to sell aging inventory at a discounted price, helping you clear out excess stock and avoid long-term storage fees.
6. Time Inventory Restocking
Time your inventory restocking to occur after Amazon’s long-term storage fee assessment dates (February 15th and August 15th) to minimize the risk of incurring these fees.
7. Create Removal or Disposal Orders
If you have inventory that isn’t selling, consider submitting a removal or disposal order before the long-term storage fee assessment date to avoid being charged for those units.
8. Set Up Automated Removals
Automate the removal process for inventory subject to long-term storage fees, ensuring timely action and minimizing the risk of accumulating excessive charges.
Hopefully, you can now minimize fees after following these storage fee optimization tips. Another step you can take is to uncover potential FBA reimbursements from Amazon.
With so many variables behind the FBA operation, discrepancies can occur. Common issues like lost or damaged shipments, overcharged fees, unaccounted inventory differences, or errors with removal order reimbursements could also make you eligible for refunds.
But keeping up with all this takes time and expertise.
That’s where Getida comes in:
- Our exclusive dashboard reviews your account to identify discrepancies you may otherwise overlook.
- Then, our all-star team, including former Amazonians, recovers your fund quickly and efficiently through our expert claims submission process.
Sign up for Getida’s audit review today and get your first $400 in reimbursements at no charge! This risk-free review can unlock profits you can reinvest into your business!
What Happens If Sellers Do Not Pay Their Inventory Fees?
Your selling privileges may be suspended if you do not pay your FBA inventory storage fees or other charges.
Consequences of non-payment can include:
- Listings being removed
- Inventory being made unavailable for sale
- Inability to ship additional products to Amazon
- Collection agency involvement for outstanding balances
To avoid account suspension and other issues, it is critical for you to closely monitor your Seller Central account for any unpaid fees and pay them as soon as possible.
Proactive inventory management can also help minimize fees in the first place.
Frequently Asked Questions (FAQs)
Still have questions about how Amazon FBA inventory storage fees work? Let’s review some common ones:
What Are Amazon FBA Storage Limits?
Amazon sets size limits on the total inventory you can store in their fulfillment centers to ensure sufficient capacity for all users. You’ll receive warnings when approaching your allotted capacity.
Exceeding limits repeatedly can result in account restrictions or suspensions.
How Are Oversized Items Charged for Storage in Amazon FBA?
Oversized items, generally over 130 inches (length + girth), are charged at higher oversize rates for storage instead of standard-size rates. Oversized items are now called Extra-Large items.
How Can Sellers Estimate Their Upcoming Storage Fees?
The FBA Fee Preview report estimates upcoming fees based on current inventory. The Monthly Storage Fee report shows the breakdown of the latest storage charges. Both can help you predict future costs.
Are There Any Seasonal Variations in Amazon FBA Storage Fees?
Yes, monthly storage rates increase significantly in Q4 to account for the holiday peak. October-December rates can be 2-3x higher than January-September base rates. Planning inventory timing accordingly can help manage seasonal storage cost spikes.
Conclusion
After reviewing all the intricacies of FBA storage fees, you can now hopefully better manage these costs. But even seasoned sellers leave money on the table.
You may often overlook reimbursements for discrepancies like overcharges or damaged shipments. We get it: it’s tough to catch these manually while running your business. This is where Getida can add value to your Amazon business.
Our strategic reconciliation approach easily identifies discrepancies you may miss, and our expert team recovers what you deserve. On average, you can recover 166% more with us than sellers auditing solo.
Partner with us today and transform forgotten funds into fuel to reinvest in your business. The first $400 we recover for you is on us!
