Amazon FBA Long-Term Storage Fees (LTSF), now referred to as Aged Inventory Surcharge, represent a crucial aspect for sellers utilizing the Fulfillment by Amazon (FBA) service. This fee aims to ensure a swift inventory turnover by discouraging the accumulation of unsold stock in Amazon's warehouses. Let's dive into understanding these fees, their calculation, and strategies to mitigate their impact on your business.
Understanding Amazon’s Aged Inventory Surcharge
The Aged Inventory Surcharge is levied on inventory that has occupied space in Amazon's fulfillment centers for an extended period. Specifically, this fee targets items stored for more than 180 days, emphasizing the importance of efficient inventory management.
Calculation and Timing
Amazon assesses the Aged Inventory Surcharge based on a monthly inventory snapshot taken on the 15th day of each month. Following this assessment, the surcharge is then applied to your account typically between the 18th and 22nd of the same month. This fee is in addition to the regular monthly storage fees and is calculated on a first-in, first-out basis. This means that sales or removals are accounted against the oldest stock in the network, promoting fairness and efficiency in inventory handling.
Strategies to Minimize the Aged Inventory Surcharge
Managing your inventory effectively is key to avoiding these additional costs. Here are several actionable strategies:
- Regularly Monitor Inventory: Keep a close eye on the age and sales velocity of your stock. Amazon's Seller Central and tools like 3fin.io offer detailed insights into inventory age, helping you make informed decisions.
- Promotions and Discounts: Consider lowering prices or running promotions on slow-moving items to increase sales velocity.
- Inventory Removal or Redistribution: Before the Aged Inventory Surcharge is calculated, review your inventory. Removing or redistributing aged stock can prevent unnecessary fees.
- Leverage Inventory Management Software: Tools like 3fin can proactively notify you about items at risk of incurring the Aged Inventory Surcharge, allowing you to take timely action.
Additional Resources
For more insights into managing storage costs, explore our resources like the Top 10 Tricks to Decrease your Amazon Monthly Storage Fees and our ultimate guide to avoiding long-term storage costs. Also, discover how 3fin can assist in mitigating storage fees and enhancing your profitability. Schedule a demo to see 3fin in action.
By adopting these strategies, you can maintain a healthier inventory turnover, minimize costs, and ensure your Amazon selling venture remains profitable. Stay proactive and strategic in managing your inventory to sidestep the Aged Inventory Surcharge and keep your business moving forward.
