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[Disclaimer: Before we start, understand that Amazon periodically updates its fee structures. For the most up-to-date long-term storage fee rates, visit the Amazon Seller Central Long-Term Storage Fee page.]
Selling products through Amazon’s Fulfillment by Amazon (FBA) service provides many benefits, like fast Prime shipping and easy order management.
However, storing inventory in Amazon’s warehouses does come with costs, including monthly storage fees and potential aged inventory surcharges. Understanding these fees can help you make informed decisions when managing your inventory and overall business costs.
In this guide, we’ll explain everything you need to master Amazon’s long-term storage fees. Plus, we’ll share how Getida can help you recover funds for overcharged fees and other FBA discrepancies, putting profit back in your pocket!
Let’s dive in!
Table of Contents
What Are Amazon's Long-Term Storage Fees?
Amazon long-term storage fees, also known as aged inventory surcharges, are additional charges applied to FBA inventory that has been stored in Amazon fulfillment centers for an extended period.
Specifically, they apply to units that have been in Amazon warehouses for more than 181 consecutive days, based on the inventory cleanup dates of the 15th of each month.
These fees are in addition to the regular monthly inventory storage fees you pay on FBA inventory. Long-term storage fees encourage you to maintain a healthy inventory turnover rate and prevent stockpiling of slow-moving or obsolete products in Amazon’s fulfillment centers.
On a high level, the long-term storage fee structure works as follows:
- Inventory aged 181-365 days incurs incremental long-term storage fees per cubic foot.
- Inventory aged over 365 days incurs a minimum fee of $0.15 per unit or higher rates per cubic foot, depending on size.
Let’s look at the specific fee rates and calculations next.
What is the Standard Amazon Long-Term Storage Fee?
Amazon’s long-term storage fees are calculated based on the number of days an inventory unit has been stored in its fulfillment centers. The fees increase progressively the longer an item remains unsold.
Here’s a breakdown of the standard long-term storage fee structure:
- Inventory Aged 181-210 Days:
- $0.50 per cubic foot
- $0.50 per cubic foot
- Inventory Aged 211-240 Days:
- $1.00 per cubic foot
- $1.00 per cubic foot
- Inventory Aged 241-270 Days:
- $1.50 per cubic foot
- $1.50 per cubic foot
- Inventory Aged 271-300 Days:
- $5.45 per cubic foot
- $5.45 per cubic foot
- Inventory Aged 301-330 Days:
- $5.70 per cubic foot
- $5.70 per cubic foot
- Inventory Aged 331-365 Days:
- $5.90 per cubic foot
- $5.90 per cubic foot
- Inventory Aged 365+ Days:
- $6.90 per cubic foot or $0.15 per unit, whichever is greater
The cubic foot rates above exclude certain items listed under clothing, shoes, bags, jewelry, and watches.
These rates apply to standard FBA inventory not classified as dangerous goods. Different fees are assessed for dangerous goods to account for special handling. Amazon bills these long-term storage fees monthly, between the 18th and 22nd of each month.
Note: Amazon may adjust these long-term storage fees periodically, so be sure to check for the latest rates in Seller Central or official fee announcements.
What is the Minimum Long-Term Storage Fee?
For inventory that has been in Amazon fulfillment centers for over 365 days, there is a minimum long-term storage fee of $0.15 per unit.
This means if the cubic-foot measurements for an aged inventory unit are calculated to a fee lower than $0.15, the minimum $0.15 per unit rate will be applied instead.
For example:
- Unit A calculates to $0.05 per cubic foot
- Unit B calculates to $0.10 per cubic foot
- Both would incur the $0.15 minimum fee, which is greater than their cubic foot rates.
This minimum fee ensures that Amazon recovers costs for storing and handling extremely small or lightweight products for extended periods.
Amazon Long-Term Storage Fees Breakdown
To help you better understand how these fees are calculated, let’s consider a few examples:
Board Game Example
Let’s look at a 16 x 12 x 3-inch board game stored in FBA:
- 3 units stored for 195 days
- Applicable cubic foot fee: $0.24
- No per-unit fee applies
- Billed long-term fee per unit: $0.24
- 5 units stored for 285 days
- Applicable cubic foot fee: $2.73
- No per-unit fee applies
- Billed long-term fee per unit: $2.73
- 15 units stored for 370 days
- Applicable cubic foot fee: $12.35
- Applicable per unit fee: $2.25
- Billed long-term fee per unit: $12.35 (greater of the two)
Dress Example
Now let’s look at a 12 x 9 x 2-inch dress stored in FBA:
- 2 units stored for 160 days
- No cubic foot fee applies
- No per-unit fee applies
- Billed long-term fee per unit: $0
- 8 units stored for 320 days
- Applicable cubic foot fee: $0.64
- No per-unit fee applies
- Billed long-term fee per unit: $0.64
- 20 units stored for 380 days
- Applicable cubic foot fee: $2.80
- Applicable per unit fee: $3.00
- Billed long-term fee per unit: $3.00 (greater of the two)
As you can see, long-term storage fees can quickly add up, especially for larger or heavier items stored for an extended period. Be careful when your inventory hasn’t been sold properly for a long time.
Another hidden profit leak to watch out for is unclaimed FBA reimbursements. Between overcharged fees and other inventory discrepancies, you might lose an estimated 1-3% of revenue yearly!
Rather than letting these reimbursements go unnoticed, Getida provides an effortless solution. Our award-winning platform audits your account and identifies eligible claims. Then, our experts handle the entire reimbursement process for you.
See for yourself—sign up today for an audit review, and we will recover your first $400 in FBA refunds for no fee so you can start maximizing your reimbursements right away. There’s no more leaving money on the table!
5 Steps to Calculate Long-Term Storage Fees
Follow these 5 steps to calculate potential long-term storage fees for your FBA inventory on a given month:
1. Identify Inventory Subject to Fees
Amazon uses a “first-in, first-out” inventory accounting system. This means when a sale occurs, they deduct the oldest inventory in their system regardless of which exact unit was physically shipped.
They do an inventory “cleanup” every month to determine age. On the 15th of each month, any units exceeding 181 days or 365 days incur long-term storage fees.
Use the FBA Inventory tool to locate and filter your inventory by how long it has been stored in Amazon’s fulfillment centers. This information will help you determine which items will be subject to long-term storage fees by the next inventory cleanup date.
2. Calculate Volume
Volume is determined by the packaged dimensions: length x width x height. Amazon measures this when units first arrive at their fulfillment centers. It is measured by cubit foot.
3. Find the Number of Units
The average number of units stored per day during the month is used to calculate fees. This is based on daily inventory snapshots.
4. Apply Fee Rates
Based on the inventory age and product size tier, apply the appropriate fee rates from the long-term storage fee structure.
Minimum fees also come into play for any 365+ day aged inventory.
5. Estimate Total Fees
Calculate the total long-term storage fees by multiplying the applicable fee rates by the corresponding inventory quantities and volumes.
Let’s look at another quick example:
- Unit A
- Age: 250 days on February cleanup
- Size Tier: Standard
- Volume: 0.5 cubic feet
- Avg. Monthly Qty: 150 units
- Fee Calculation:
- 150 units x 0.5 cubic feet x $1.50 (241-370 day standard-size rate) = $112.50
This highlights how you can estimate potential long-term storage fees based on your inventory specifics.
How to Avoid or Minimize Long-Term Storage Fees
Here are some tips you can use to reduce long-term storage fees:
1. Optimize Inventory Levels
Review your inventory levels and sales velocity regularly to maintain a healthy inventory turnover rate. Avoid overstocking and adjust your inventory replenishment strategies accordingly.
2. Utilize Amazon Outlet
Consider setting up deals through Amazon Outlet, which is a promotional channel for clearing out older or overstocked inventory. Outlet deals offer a minimum discount of 20% and can help you sell through aging inventory before it incurs long-term storage fees.
3. Review Inventory Reports
Use Amazon’s Recommended Removal and Inventory Health reports to identify units approaching 181 days.
4. Submit Removal or Disposal Orders
If you have inventory approaching this long-term storage fee threshold and has minimal value, consider submitting a removal or disposal order before the next inventory cleanup date. You can avoid the fees altogether by removing or disposing of these units.
5. Automate Removals
Amazon offers an automated fulfillable inventory removal service to help you manage your inventory levels proactively. This service automatically removes or liquidates inventory that meets certain age or sales criteria, preventing it from incurring long-term storage fees.
6. Optimize Pricing and Promotions
Regularly review and adjust your pricing and promotional strategies to improve sales velocity and reduce the risk of inventory aging in Amazon’s fulfillment centers.
You can optimize your FBA storage expenses with active inventory and cost management.
Frequently Asked Questions (FAQs)
Below, we answer some of the most frequently asked questions about Amazon’s long-term storage fee policies:
What Items Are Subject to Long-Term Storage Fees on Amazon?
Any FBA inventory stored in Amazon fulfillment centers for 181+ consecutive days, based on the cleanup dates (15th of each month), is subject to long-term storage fees.
The fees apply to all products unless a special exemption exists (see next question). You should monitor aging inventory to avoid incurring costs.
Are There Any Exemptions to Amazon’s Long-Term Storage Fees?
Amazon does offer long-term storage fee waivers in certain situations:
- FBA New Selection Program – Provides fee waivers for U.S. sellers for first-time product launches.
- Inventory auto-replenished by Amazon – Items primarily auto-replenished through Amazon Warehousing and Distribution (AWD) may qualify for waivers or reduced rates.
Unless a product meets one of those exemption criteria, long-term storage fees will be charged according to Amazon’s standard fee schedule and policies.
How Do Amazon Long-Term Storage Fees Compare With Other Options?
If you’re evaluating off-Amazon storage alternatives, Amazon’s long-term storage fees are often still competitive when factoring in transportation costs and lost selling opportunities.
However, for extremely slow-moving inventory, other options like third-party warehouses or manufacturer/distributor storage may provide more cost-effective solutions than incurring 365+ day fees indefinitely through Amazon.
It comes down to balancing fees, logistics, and sales channels to make the best choice per inventory situation and product type. With good inventory management, long-term storage fees can be minimized or avoided entirely in many cases.
Conclusion
Amazon’s long-term storage fees aim to increase inventory turnover rates and prevent the stockpiling of older products in its FCs. Understanding how these fees are calculated can help you make smart inventory decisions.
However, even with the best inventory management practices, FBA discrepancies and overcharged fees are sometimes inevitable. That’s where Getida comes in – a strategic partner dedicated to empowering Amazon sellers like you.
With our superior FBA auditing technology and dedicated expert support, we secure reimbursements from over 90% of the claims we open.
Sign up today to get your first $400 in reimbursements free of charge! Don’t wait – claim what’s yours with Getida!
